Have you ever been walking around the city and thought “Huh, NYU has a building here?”
It can be tough to miss the 5+ million square feet (roughly six Amazon fulfillment centers) of space that the University occupies in New York. From Brooklyn to 1st Avenue to Abu Dhabi, NYU does not have a single home. For all its sprawl, however, the University unquestionably has its roots in Greenwich Village. Both campus and college-town, the Village is the heart of student activity.
Even as NYU touts a growing global presence, the Washington Square campus remains the University’s top priority for capital improvement. Announced with fanfare in 2010, the University is roughly a decade into its contentious and highly leveraged “NYU 2031” project. With the goal of preparing the university “for centuries, not decades,” the 2031 plan laid out a series of ambitious real estate investments. Core to the proposal are two “superblocks” south of campus (bound by Houston St, LaGuardia Pl, West 3rd St, and Mercer St) that are marked for a combined 2.5 million square feet of new construction. Fast math: that is a 50% expansion over the current footprint in all the five boroughs.
The 2031 plan was condemned by nearly every University stakeholder save the University itself. Residents dreaded years of screaming construction sounds and architecture “more fit for Abu Dhabi than Greenwich Village.” Faculty was skeptical of the Board’s financial priorities and strongly questioned the plan’s fiscal responsibility. Students past-present-and-future jointly pondered: “Is this what my $70k per year pays for?” Collectively, opposition groups fought the plan all the way to the New York Supreme Court, where they met a hard stop. The verdict: it is the University’s land, so it is the University’s call.
After a bit more politicking (estimated grand total: “five years of discussion and 50 meetings”), the plan was OK’d to the tune of $5 billion dollars. University President John Sexton hugged everybody. Faculty and the community groaned. Contractors flew to the scene. In 2016, ground broke on 181 Mercer St, the first of several new multi-purpose facilities slated for construction.
Fast-forward to 2021:
“The future of higher education is custom, online, and on-demand.”
“Institutions should begin to plan for a sustainable, thriving, and inherently more hybridized future.”
“Every type of higher education institution will be impacted by this shift to online learning.”
What is the renovation plan now, NYU? Green screens in every classroom for flawless Zoom backgrounds? If the financial stability of massive debt-financed real estate projects was debatable in 2015, COVID-19 pushes them into “questionable” territory. Commercial interests have already evacuated Midtown because they saw the writing on the wall. Even if we are not in for a Galloway-sized paradigm shift, things are going to change, and they will change in higher education, too. For all its challenges, people have been forced to consider online learning as viable at scale. If top schools make any concerted shift toward hybrid learning as a way to widen student capacity and/or control per-head tuition costs, the University has a bit of a capital planning problem. What good is a new $5 billion campus if your students do not live in New York?
Many professors flatly denied the financial viability of the plan from its get-go, pointing to an untenable debt service that doubled the University’s historical rates and exceeded the Trustees’ self-imposed ceilings. That debt concern has not gone away with the coronavirus crisis – the University added $1 billion in debt obligations to its balance sheet in 2020. As the University publicly laments its financial situation in defense of tuition changes and budget cuts, one cannot help wonder if expansionary hubris has put the University in a bind. Build, baby, build – we will pay for it later. But who is “we”?
Unlike the even more expensive and hotly contested Hudson Yards project, the tax base is not a source of funding to NYU. While only limited insight into funding was part of the original NYU 2031 proposal, the University did acknowledge that only a small portion would come from philanthropic contribution. What income, then, is servicing all this new debt? The reality, of course, is simple: tuition (from more students that can fit in more classrooms) plus room and board (from more students that can fit in more dormitories) make up the business case. How feasible that is under the shifting sands of higher education remains to be seen.
For all the prognostication, there are gaping holes in our forecast of a post-Corona world. We do not know if consultants will get back on planes every week. We do not know how peoples’ appetite for large public gatherings will regenerate. We do not know if Manhattan will “recover” to full capacity, whatever that means. We also do not know exactly what will change in higher education, but we can be almost certain that some form of online education is here to stay.
Only a fool would expect universities to survive by being complacent in their old ways. Unfortunately for NYU, it will take a colossal effort to steer the Titanic-sized institution (a task not made easier by locking financial flexibility into long-term debt). But steer it must. If hybrid learning is the future, maybe half-a-dozen new buildings are not the best plan? If future incoming classes protest tuition payments as blank checks to fund NYU’s manifest destiny, perhaps cost-control is more appropriate than rampant growth.
Most of the 2031 plan’s most ambitious construction kicks off in the next decade. There is still time to change course. Instead of forging ahead with a new building on Bleecker St, let us reprioritize. We must focus on the must-haves that satisfy students and faculty, not the nice-to-haves that make architects (in)famous and developers rich. Maybe it is time to dust-off the “Green Alternative to 2031,” a plan embraced by NYU faculty for its emphasis on pragmatism and sustainability. COVID-19 gives the University a chance to pivot and save face. Let us recover from this crisis responsibly.
