SCSU Looks to Minimize Financial Losses From Coborn Plaza Apartments
ST. CLOUD - St. Cloud State University is ramping up marketing efforts to reduce financial losses from the Coborn Plaza Apartments.
The apartments have 453 student units. SCSU President Earl Potter says occupancy hasn't kept up with projections, in part because the apartment business model was put together just before the Great Recession.
"Nobody across the Country expected the greatest economic downturn since the Great Depression. The projections under the business model were very optimistic, they assumed a 95 percent occupancy rate. That's not a wise position to take in retrospect."
More students living off campus and commuting to SCSU in recent years also diminished apartment occupancy rates.
The University is expecting more students to move into the apartments in the near future, due to increased marketing and social media campaigns. Enrollment is also expected to rebound slightly. The increased occupancy should result in $300,000 more in revenue for the University.
"We expect the losses to be minimized. We know we'll hit 75 percent occupancy this fall, we might rise above that and approach 85 percent as we move into this project." Potter says.
The $30 million Coborn Plaza opened on Fifth Avenue adjacent to campus in 2010. St. Cloud State has not made an early commitment to renew the lease on the property with the Wedum Foundation, which expires in 2020.
"We will be in the property for another four years. We may be in it for another 20 years but we are not at this time making an early commitment to renew the lease at the end of 10 years," Potter says.
Potter agrees that the apartments are also pricey, but that they offer the highest level of amenities and a further degree of security, privacy and independence.
2016-17 academic year rent rates per student for a four bedroom unit range from $756-$772 a month under a 10 month lease ($7,568-$7,720 total). A one-bedroom unit costs $8,310-$8,476 under a 10-month lease.