This blog summarizes the key takeaways from our fiscal resiliency podcast, episode 17.
Today’s higher education landscape calls for institutions to be more intentional in thinking outside-the-box about strategies to attract and retain students, enhance academic and non-academic offerings and exhibit fiscal resiliency to withstand economic downturns.
An emerging approach proving to be critical is regional partnerships, including the public-private partnership, often referred to as “P3.” P3s are contractual arrangements formed between the public sector (government) and the private sector (non-government). As they pertain to higher education, P3s can be strategic collaborations between an institution, its foundation, business partners and/or local or regional entities to help design, fund and deliver critical infrastructure and programming to advance campus and community growth.
Our latest Higher Ed Advisor fiscal resiliency podcast illuminates the success that the University of Wisconsin-Eau Claire (UWEC or the University) has experienced with collaborative partnerships and P3 arrangements. UWEC’s Chancellor, Dr. James Schmidt (Chancellor Jim), and President of the UWEC Foundation (Foundation), Kimera Way, discuss the University’s masterful use of P3s to create joint academic programs and student experiences, move capital projects forward, revitalize the community and drive key relationships and priorities in the community and throughout the region.
One of the first projects Chancellor Jim and Way collaborated on as institution and foundation leaders was the Pablo Center at the Confluence, an outdated theater that is now a significant community asset. Upon building an effective coalition with the state of Wisconsin and the county and city of Eau Claire, as well as local developers and donors, they raised nearly $30 million and garnered wide support to upgrade the facility, create a living and learning community that spurred revitalization of the Eau Claire downtown and as a result, attract more people to the city. In fact, according to the last Census data, the City of Eau Claire now boasts a population that is getting younger. "Eau Claire has become a magnet for artsy millennials," Chancellor Jim noted. “We are a ‘destination’ because of the developments being built all over the city that give residents a good quality of life.”
This project’s achievement laid the foundation for future partnership efforts to support student and resident needs. And each successful P3 that followed opened the door for strategic and mutually beneficial collaborations.
The Pablo Center arts facility is one example of the University and the community working together to, as Chancellor Jim described, “create something far better than they could have by themselves.” Way noted that there clearly were (and are) certain goals at the University that cannot be accomplished by simply standing in line and asking the state for funding. Some of these objectives require diverse approaches and creative partnerships with mutual benefit. The Pablo project resulted in collaboration with the Pablo Foundation, which continues to be a key philanthropic body comprised of former UWEC alumni who care deeply about the community.
One of the most significant partnerships UWEC has formed is its relationship with Mayo Clinic Health System (Mayo Clinic or Mayo). Mayo Clinic was seeking to transform its healthcare practice in Northern Wisconsin to one that was not only more research-based, but a practice that empowered learners to ask questions to prepare them to become stronger healthcare providers. “This partnership,” Chancellor Jim explains, “goes to the heart of learning, exploration, research and adding to the body of knowledge that each university exists to fundamentally do.”
With Chancellor Jim leading the way, UWEC formed a partnership with Mayo Clinic that is slated to invest more than $100 million in research over a 10-year period, creating a robust research program at the institution. This offers Mayo and the University an opportunity to build one of the most renowned pre-medical schools in Eau Claire, and the U.S. Additionally, it is critically beneficial to Mayo to attract healthcare professionals to western Wisconsin to fulfill the clinic’s need relative to rural health. “Five years have passed,” he noted on the podcast, “and already this partnership has surpassed all of our goals for the entire agreement.”
Podcast host and Baker Tilly’s fiscal resiliency specialist, Christine Smith, emphasized how such partnerships like those UWEC and its Foundation have with Mayo Clinic present mutual benefits. Chancellor Jim agreed, adding that “the true test of the greatest partnerships is when you ask each of the partners who's getting the better deal. If you ask me, I'm going to say UW-Eau Claire is getting the best deal. But if you ask the Mayo Clinic, they will say Mayo’s getting the best deal.” Further, the partnership helps respond to the critical demand across the country to have educated professionals fill key positions.
Another significant P3 collaboration between UWEC, the UWEC Foundation, generous donors and the City of Eau Claire is the Sonnetag Event Center (the Center), a project Way noted will deliver major benefits to both the University and the community and will further expand the strategic partnership with the Mayo Clinic when the Center opens in 2024.
The land donated by John and Carolyn Sonnentag that the Center currently sits on is being used to construct a new 5,000-seat arena that will be home to the University’s collegiate athletics programs while also hosting local events, large-scale activities, tourism attractions and community-based sports contests. “It will be a true community facility,” Way said, adding that “it checks off a lot of boxes of need in our community.” The Center will also house a diagnostic imaging and sports medicine facility that allows Mayo clinicians and researchers to work alongside UWEC students, benefitting both student experience and regional workforce availability.
Smith emphasized that the Center project’s significant impacts will extend beyond the UWEC campus and benefit its partners, and more importantly the community and region, with its workforce development and urban revitalization advantages. Such endeavors, she added, are not easy for the University and Foundation to navigate and require anticipating the unexpected.
As Smith observed, collaborations like the ones that UWEC has triumphantly executed are not exempt from challenges.
The Pablo Center, for instance, is a “complicated puzzle,” as Chancellor Jim puts it. There are many groups that use that building, from UWEC students to members of the community. Yet, neither the University nor the city own it; rather, it is owned by a not-for-profit entity. Thus, there are different layers to managing the facility and arranging for every group to receive sufficient time and space to hold their events.
“Sharing is hard, and partnerships can be difficult,” he said. “My challenge as a chancellor is, ‘how do you make good on your mission?’ We have to invite partners in who have resources and ensure that those partners also get a return on sharing those resources with us.”
Overcoming challenges with P3s requires resilience, too. There are early project detractors, both at the University and in the community, as well as competing referendums. At various times, UWEC needed city residents to vote “yes” on one referendum and “no” on another one. The politics of the situation, to put it lightly, can be complicated.
Yet, the end results are the motivating factor for UWEC as students reap the rewards.
The obstacles UWEC has faced have required collaborative solutions and a shared vision on the part of the University’s leadership to navigate the P3 process. Chancellor Jim and Way stress the importance of keeping the project in progress at the forefront of everyone’s agenda and understanding the criticality of a clear vision and well-articulated benefits. Way expressed that an unwavering commitment, sheer will and determination along with a clear purpose and multi-faceted impact can positively influence decision-makers to support a project “that's willing to bring disparate groups together and do something that's going to benefit a large part of the community.”
UWEC and community leaders made it a priority during the Sonnetag project to engage Eau Claire constituents, visit the surrounding neighborhoods, meet with residents and help them understand how they would benefit from the presence of the events center. As a result, not one person or entity came forward with objections to the project.
“I think that's the kind of legwork that needs to be done,” said Way, who stressed the importance of going into a P3 collaboration not as the boss of the project but as someone sitting at the table who is willing to listen, learn and compromise. “That’s the real key to success,” she said.
Institutions also recognize the complexities involved in planning, structuring and executing a P3 to meet project goals and enrich the community, which is why it’s critical to have insight from an experienced professional to help maximize benefits and minimize risks. This will become exponentially important as more colleges and universities embark on P3 endeavors.
For Chancellor Jim, P3s are the future of the higher education industry. “I think that this is where higher ed will have its new frontier,” he told Smith when wrapping up the engaging discussion. “Our mission revolves around teaching, research and service. Well, (a P3) isn't just service. It is that true partnership. So, I would nominate that to be the fourth pillar at a modern higher education institution: teaching, research, service and partnership.”
Ready to discover how Baker Tilly can assist your institution with P3 collaborations? Our experienced higher education specialists can help you and your leadership team explore and take the first step on this journey.
For more information about how we can help your institution navigate through a public-private partnership, contact our team.
