Gregory G. Dell’Omo, president of Robert Morris University, writes about the symbolism and practicality of selling a building and breaking with tradition in favor of innovation:

Like many who work in higher education, I love university traditions—the rituals, events, and stories that carry on and bind together each generation of students. Those traditions engender devotion to our institutions on the part of our alumni and make us feel a part of something bigger than ourselves.

But as much we love our traditions, they carry a risk. They can render us slow to adapt to change. Sometimes colleges allow tradition to tie them to outdated practices that no longer match the institution’s mission or the external environment. We need courage and wisdom to discern when it is time to hold on and when it is time to let go.

That’s the choice Robert Morris University (Pa.) confronted when we decided to put up for sale the classroom building we had owned in downtown Pittsburgh since 1959. Three years later the university had purchased property for a residential campus in suburban Moon Township, 18 miles from downtown, but the city remained a focal point of the school for many more years.

 This piece in Land Line, a publication of the Lincoln Institute of Land Policy, is from 2001 but is worth the read as an exposition of the myriad of issues campuses face in development at or near the campus edge. Very thoughtful.

Even when universities succeed in securing new development sites, they have to balance many competing demands. For example, donors favor signature buildings; the city requires regulatory compliance; neighborhood activists call for input into the school's expansion plans, as well as benefits from that expansion; parents want a safe environment for their children; and students desire retail and entertainment options, as well as housing and security. Meeting all of these demands is difficult and none of the possible responses speaks directly to furthering the core educational mission of a university. ...

Because most universities will remain in their current locations indefinitely, their futures will continue to be intertwined with their surrounding neighborhoods. However, the inevitability of future change and persistent development pressure highlights the differences between universities and the private real estate sector. Profit and speed motivate private developers-two qualities not usually associated with universities, particularly public institutions. Furthermore, given the broader mission of a university, short-term, market-oriented thinking is not always suitable. It is clear that future prospects for university expansion remain a complex challenge, especially in urban areas where land available for development is limited and expensive. 

Click on its title to access the original resource, Universities as Developers.

Two years ago, pharmaceutical giant Pfizer decided to close its major research facility, which bordered the University of Michigan's North Campus in Ann Arbor. The university purchased the 30 buildings, with nearly 2M square feet of space on 174 acres for $109M and has renamed the property the North Campus Research Complex. Glimpses into the planning process for what to do with the property can be found on this special planning page. 

Perhaps you haven't thought of the current situation as an opportunity for your campus to become a real estate developer?

Why become a real estate developer in the midst of a housing recession? Real estate markets are historically cyclical. It’s in the doldrums now, but the market will return to health. Planning and entitlements for real estate projects take time, often years, to complete. By preparing and positioning projects for development now, landowners will be in a position to capitalize on the value when the market returns.

Is the risk inherent in real estate appropriate for an academic institution? Value in real estate can be harvested at many points along the evolution of the property, from raw land to built product. An institution could sell surplus raw land. This, however, is typically the lowest value that might be achieved. It also leaves the use and quality of the development to the new owner, who may decide to use the land in a way that reflects poorly on the university. Value is added by creating an initial vision for the property through a master planning process, providing the university’s development partner and its stakeholders with a clear understanding of the institution’s desires and standards, which must be met in the development.

Some IHEs choose to sell the land once they have articulated their vision and the guidelines needed to ensure its implementation. Obtaining entitlements and approvals from a variety of state and local entities adds further value without committing funds to building roads, utilities, or buildings, and other institutions harvest value at this point in the process.

Still others choose to construct roads and utilities as the “master developer” of the property, leaving the construction and sale of homes and other buildings to private sector developers. As value is added, risk increases. By gaining a clearer understanding of the development process and weighing the potential risk against the gain, IHE leaders are maximizing the value of their real estate assets.

A new report from Moody's Investment is described in this article by Paul Fain. May require subscription or day pass for access. The report describes a number of ways in which campuses with substantive real estate can maintain control and ownership of the real estate which engaging in partnerships that can create revenue streams from the use of the land. The report is titled "Public-Private Partnerships in U.S. Higher Education: Real-Estate Rich Organizations May Benefit, but Credit Impact Always Assessed on Case-by-Case Basis," and can be obtained by request at higher.education@moodys.com.

This article, "At Yale, A New Campus Just for Research," is from The New York Times by Karen W. Arenson, and may require registration for access:

Yale took what it hopes will be a giant step forward in that race with its announcement last month that it would buy the 136-acre campus of Bayer HealthCare, which straddles the line between West Haven and Orange, Conn., seven miles from downtown New Haven and the university’s main campus.

Additional information is available on the website of Yale's Office of Public Affairs. Also, we haven't found anything about this on the facilities website at Yale, but you may want to take a look at some of the major projects that are on there.