CHARLESTON, W.Va. - Funding for a new student housing and retail complex in Morgantown will come entirely from the private developers involved in the deal.
West Virginia University announced Friday it had partnered with Paradigm Development Group to create a nearly 300,000-square-foot complex in the Sunnyside area near downtown. The complex will have 265 student apartments, a grocery store and possibly coffee shops, bookstores and a restaurant.
While the university will issue $14.6 million in revenue bonds for the property, Paradigm is on the hook for the entire $70 million developers estimate it will take to build the complex.
Paradigm has not secured any of that funding yet, said Brian Helmick, an attorney representing the holding company. However, he said the developers have been creating "private banking relationships" and are confident they'll be able to receive a $70 million loan.
"Banks are at the table and very interested in financing (the project)," Helmick said.
Paradigm was created in February by Ryan Lynch, David Martinelli and Jim Brown. Martinelli is a professor of civil engineering at WVU, and Brown owns a private contracting company in Fairmont.
This is the first development project Paradigm has undertaken, Helmick said.
He said the anticipated revenue and WVU's involvement "bolster the value of the project," making the group a more appealing candidate for a loan.
University spokesman John Bolt confirmed WVU is not going to pay any construction or development costs.
"WVU has no role in the finances, but we also have no concern with (Paradigm) being able to acquire it," Bolt said.
Helmick said the university has been "diligent" in discussions with Paradigm in making sure they will be able to finance the build.
Under the terms of the agreement, all revenue from student and commercial rental agreements will essentially go into a community pot, Helmick said. After the operational costs and debt service is paid, WVU and Paradigm will split the remaining revenue.
Weese said they anticipate charging $675 per unit. While he said that's more expensive than typical student housing, it might not be the case in two years. The units also come with a kitchen, living room, Internet, and laundry facilities.
There will be a management committee consisting of three people from the university and three representing the developers that will oversee the daily operations and costs of the building, including rent, he said.
For the first 10 years of operations, WVU will receive 69 percent of that money and Paradigm will receive 31 percent, said Narvel Weese, WVU vice president of administration and finance. During the three decades after that time period Paradigm's share of the revenue jumps to 51 percent.
At that point everything on the site becomes the property of WVU, Weese said.