SERVICE CONCESSION COMBINED DEVELOPMENT

Combining student housing with deferred maintenance and infrastructure development.

Service Concession Combined Development features the development of revenue-producing residence hall facilities while confronting deferred maintenance backlogs and/or undertaking infrastructure development by public higher education clients without capital lease indebtedness.

In a unique structure, the financial responsibility of not only residence hall construction or renovation but capital repair and replacement (including furniture, fixtures, and equipment) is absorbed by Knott Development under a service concession arrangement.  While residence hall financial responsibilities lie with Knott Development, facility operations, student selection, and administrative functions are client-managed and staffed pursuant to a market-rate property management agreement plus a dedicated share of residence hall cash flow. Knott Development simultaneously leverages the residual service concession cash flow stream to provide funding for deferred maintenance and/or infrastructure development initiatives. At the conclusion of the service concession arrangement, all developed facilities revert to the client.