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Contract with builder

  • 1.  Contract with builder

    Posted 22 days ago

    We are approaching capacity in our current dorms; if we were to build a new dorm to accommodate our current and anticipated growing student body, there would also be related revenue for the cost of residence which the college otherwise would not receive.  We considered whether a partnership contract with a contractor builder in which they assume the cost of the building in exchange for the rental income for a stated period, would be an option that we could put out to bid.  In this arrangement, there is a risk to both sides that student enrollment would decrease and the income from the rent would slow or decline. Are there other legal implications unique to this scenario that we need to consider?

    Has anyone ever done something like this?  What was your experience?

    Thank you



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    Gwen Donev
    gwendonev@GUSTAVUS.EDU
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  • 2.  RE: Contract with builder

    Posted 22 days ago
    Well, this would nullify any charitable gift component.  And I imagine there would be tax issues for the builder for the rental income.  Anyway, this is fraught with all sort of legal issues and so I'd listen to my CFO and Counsel!

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987