Robert V. Gilbane is chairman and CEO of Gilbane Development Co. He is responsible for the overall strategic direction and profitability of the company, which is one of Rhode Island’s largest.
The company recently announced a contract with George Mason University in Virginia totaling nearly 200,000 square feet of development. Gilbane recent spoke to Providence Business News about the deal, issues affecting the development community and the land freed by the Interstate 195 relocation.
PBN: The company has just announced a develop/build/lease contract with George Mason University in Virginia totaling nearly 200,000 square feet of housing, labs, retail and incubator space. Is this an unusually complex project for Gilbane?
GILBANE: No, Gilbane Development Co. has developed a wide range of projects that have included student housing, labs, retail and mixed use projects. Locally, in Providence we redeveloped 15 Westminster St. into a living-learning center with 510 beds for undergraduate housing. RISD master leased it for several years and then purchased it. We have developed labs and life sciences facilities for companies like Human Genome Sciences.
PBN: What percentage of your work is with academic institutions, and is that growing as the economy continues to flatline?
GILBANE: More than 33 percent of Gilbane’s current work is with the education sector. Gilbane is working on 67 college campuses. We do a tremendous amount of work for academic institutions. Most of the work involves projects on the campus of Colleges and Universities but we also developing privately owned purpose-built student housing complexes with state of the art amenities in locations immediately adjacent to the Universities. We recently opened a 540 bed facility, 8 ½ Canal St. in Richmond, Va. adjacent to Virginia Commonwealth University. Another project underway is The Cove a 396-bed facility adjacent to Coastal Carolina University in Conway, S.C.
PBN: Are you seeing a greater trend toward mixed-use development in academic settings over the last decade or is it newer (or older)?
GILBANE: As colleges and universities budgets continue to get squeezed the idea of allowing them to prioritize strained capital budgets toward their core academic priorities and outsource non-core capital projects like dorm construction makes a lot of sense. Sometimes these projects do include a mixed use component. A growing trend is to use a form of “public-private” partnership which uses the skill set and experience of the private sector to fufill a public need in a more efficient delivery system with the benefit of an accelerated schedule and cost savings. Gilbane Development has been involved in developing a number of public private partnerships – 1 million sf of schools in Houston, a medical and psychiatric campus in Williamsburg, Va., prisons, county office buildings and student housing.
PBN: Access to capital has been a major concern for many businesses. Have you seen any issues getting the financing you need to complete the projects you take on? Why or why not?
GILBANE: As the banking and lending conditions have certainly improved over the last 18 months, we do not find access to capital to be a problem. We are using both tax exempt and taxable financing structures and typically we provide our own equity in projects. Lenders have confidence if the developer has a wide experience in the project type being developed and understands how to properly underwrite a transaction. We have underway a number of development projects ranging from design/build/lease with the Veterans Administration, working for the Pentagon Federal Foundation, build-to-suit office projects and mixed-use projects. If the project is well thought out with strong sponsorship and with good underwriting fundamentals, it is much easier to attract financing.
PBN: Since you are a major developer along with being a national construction company, what kind of development would you like to see in the land that has been freed up now that Interstate 195 is gone?
GILBANE: The 195 land presents the opportunity for the state and city to have a first class mixed use development. The real growth over the next decade is “Meds and Eds” buildings oriented to serve the medical community, colleges and universities. The key is to attract the first anchor tenants. The two likeliest candidates are Johnson & Wales and Brown universities. We should make every effort to enter into agreements with these institutions as soon as possible. The proposed nursing school could also be a good candidate. We should also understand that aesthetics and amenities need to be developed quickly. The proposed pedestrian bridge over the river and the proposed two parks need to be extremely well done. The parks should be appropriately sized so that the budget results in a first-class park.
