My VC has asked me to coordinate discussion and possible
 preparation of a proposal to the Chancellor regarding an
 idea he has for financing research space construction costs.
 I'd be interested in talking with anyone who might have
 information on the pros and cons of alternative construction
 financing.

 The idea is this.  In order to get research space
 constructed on the campus - we are talking about wet labs
 and perhaps clinical bed space - the campus would enter into
 an arrangement with a contractor to build a privately-funded
 building (to our specs) on University land with the
 University agreeing to lease back 95-100% of the space.  The
 ground lease would provide payment to the University for the
 use of the land and the University would pay fair market
 value for the square footage.  The contractor would remain
 landlord and would manage the facility for 10+ years, after
 which the University would buy back the building.  The
 contractor might find this attractive because of the
 multi-year commitment to high occupancy lease space in an
 area where there is a glut of commercial space.  We haven't
 run numbers yet, but are thinking that the faculty would not
 be impacted because the cost of the leased space would be
 offset by the reduced indirect cost rate (off-campus).

 For those who are unfamiliar with UC Irvine, we are a young
 campus with lots of undeveloped land in a state where
 construction funds are limited.

 Have any other universities used alternative financing to
 cover construction costs?  If so, would you please give me
 some details?  Do you see any problems other than the
 complexities associates with establishing an "arms length"
 relationship with the contractor?  Any comments would be
 helpful at this point.

     Christina Hansen, Director
     Office of Contract and Grant Administration
     University of California, Irvine
     xxxxxx@UCI.EDU
     (714) 856-5677