Construction begins on APU endowment lands: first building under new development agreement.

• Author: Resz, Heather A.
• Position: SPECIAL SECTION: Building Alaska

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Alaska Pacific Medical Center, the first project constructed under a Multi-Phase Development Agreement between Alaska Pacific University (APU) and U-Land LLC, is expected to be complete by the end of the year.

The agreement gives an investor group led by Alaska Native health care organization Southcentral Foundation and Mark Pfeffer, an Alaskan commercial real estate developer, exclusive rights to develop and lease sixty-five acres of APU's endowment lands near the Springhill Suites Marriott Hotel on University Lake Drive in Anchorage's U-Med District.

The land is part of a 242-acre endowment the university received from the state in 1958 under its prior name, Alaska Methodist University.

"We entered into this agreement only a year ago, and it's always like magic to me--we're groundbreaking one year later," Southcentral Foundation CEO Katherine Gottlieb said during the April 26 ceremony. "As an alumna of APU, we're really partners beyond just getting together and building buildings. We share a vision, and today, we're seeing that vision become a reality."

Under the agreement, U-Land leases the land from APU and will own the three-story, 34,300-square-foot Alaska Pacific Medical Center.

Generating Income

Vice Chair of the Board of Trustees at Alaska Pacific University and designated APU Endowed Properties spokesperson Trigg Davis says lease income from this first U-Land project will generate more than $200,000 annually for the university, about 10 percent of its annual operating budget.

"I don't think this endowment development is about buildings; it's absolutely about people," Davis says. "It's about delivering private education to the people of Alaska, and we hope to do it on a cross-cultural basis where we can deliver education equitably to people at different places financially."

The development agreement includes a "rolling" ground lease requirement wherein U-Land was required to fund and lease an initial parcel from APU and must lease successive parcels as they are platted and road and utility access is made available, Davis says.

Alaska's only private liberal arts university offers twenty undergraduate and graduate programs serving approximately 550 students and receives no state funding.

Direct Funding

Generating revenue from land endowments isn't unique to APU. The University of Alaska system also has a Land Grant Endowment Trust Fund, as does Davis' alma mater, Stanford University in California, and many...