Five Questions With: Kurt Ehlers

Kurt Ehlers is managing director of Corvias Campus Living, a business line of the East Greenwich-based Corvias Group, which recently announced it will partner with Gilbane Building Co. to construct student apartment projects nationwide.  / Corvias Campus Living
Kurt Ehlers is managing director of Corvias Campus Living, a business line of the East Greenwich-based Corvias Group, which recently announced it will partner with Gilbane Building Co. to construct student apartment projects nationwide. / Corvias Campus Living

Kurt Ehlers is managing director of Corvias Campus Living, a business line of the East Greenwich-based Corvias Group, which recently announced it will partner with Gilbane Building Co. to construct student apartment projects nationwide. Under the partnership, Gilbane will provide construction management services for projects that Corvias will develop at selected colleges and universities. Corvias also builds military housing nationwide, through another division.

PBN: How did the partnership with Gilbane come together? Had the companies worked together in the past?
EHLERS:
It really is a great Rhode Island story. Corvias has not worked with Gilbane, but there is a longstanding personal relationship between John Picerne, our founder and CEO, and both Tom and Bill Gilbane. (It’s) a longstanding personal and professional admiration that exists; they’ve interacted a lot over the years.

PBN: How are the two companies similar, in terms of culture and core values?
EHLERS:
From a cultural standpoint, there are similarities in a couple of places. There is a certain understanding and emphasis on the social emphasis of business — being able to develop long-term relationships where your businesses operate and become an engaged part of the communities where the companies work. Both businesses have offices scattered throughout the United States, in markets where we do a tremendous amount of business. Being both socially and economically engaged in those communities is a priority for both of the businesses. It’s not necessarily project-based. In almost all cases, both companies enter a market place, establish a presence and become very engaged and active in the community.

PBN: In 2014, Corvias signed a long-term contract with the State University System of Georgia to construct and manage its student housing. The $548 million partnership, which will play out over 65 years, has been described as the largest in the United States. Why are these public-private arrangements more effective for universities?
EHLERS:
It really started at the highest levels of Georgia, with the governor and the chancellor, looking out over the entire system of schools in Georgia, looking at the horizon, to really understand the needs, short and long-term, for the system. And looking at the available resources and timing, and thinking, how do they accomplish this. The one part that really resonated well, with Corvias, at the beginning of the discussions, was the focus never left the implications of this endeavor and its impact on the students. Since 2001, every venture we’ve entered into has been a long-term partnership. We have over 90,000 beds, all in long-term partnership structures, across the United States. We’re able to develop and incubate and foster a lot of innovation in how you develop, finance and manage long-term housing partnerships, and leverage those efficiencies and the buying power around them. As significant as most schools are, very few, if any, can leverage the purchasing power of 90,000 beds across the United States. We, candidly, can purchase things more efficiently. We’re also singularly focused on housing. (With) institutions, housing is not their core competency; it’s not their core mission.

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PBN: What other state systems or colleges and universities have inquired, since the Georgia contract was finalized, about what might be possible?
EHLERS:
As you can imagine, it’s been significant. A lot of that, very large and significant inquiries, from public and private institutions across the United States, was really the catalyst for teaming with Gilbane Construction. We wanted to work with a large construction firm, consistently considered one of the best in the industry, which has the scale and the size and the expertise to be able to respond and address the needs of institutions in almost every state.

PBN: This privatization of student housing, is it that the institutions want their resources focused on other things, other than housing?
EHLERS:
Our roots started with our military housing division, and the Department of Defense. In the late 1990s, Congress authorized the military housing privatization initiative. A huge component of that was the size of the deferred maintenance, the amount of money that needed to go into these to make them livable, to meet the current needs. For the Department of Defense it was billions and billions of dollars. It’s a very similar challenge right now in higher education, where the deferred maintenance is staggering. A lot of the housing was built (in the 1960s or before). It’s really not attractive to most institutions to raise capital and go in and improve existing housing facilities when they have other more significant capital needs, such as research and science, and even athletics and administrative spaces. The deferred maintenance just continued to pile up. We have not found a state yet that does not have almost identical challenges.

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