Penn State Board Meeting: September 2018 Buying a Dormitory – What did We Learn?

  • Post last modified:May 22, 2023

At the September Finance Committee meeting, the Penn State Trustees unanimously approved the spending of $21,000,000 to buy a Dormitory Building at the Harrisburg Campus.  This purchase was of a privately-built, privately-owned building, currently used as rental housing – that PSU was buying from the existing Real Estate Development company.

Interesting?  Somewhat….

But that is not the “illuminating” aspect to this transaction.

No, THIS was the illuminating part of the transaction:


zzz psu housing

This overhead slide was presented to the Trustees at the meeting (sorry for the poor resolution – it was only shown to the public very briefly…. but was part of the package of data provided to the Trustees earlier in the week).

The slide contained a comparison of the costs of the Harrisburg Dormitory (Titled as “Nittany Village” – on the far left of the slide), vs the costs of recent Dormitory projects constructed by PSU (Those projects, from left to right, being “Abington”, “Brandywine”, and “Erie”… the three most recent projects)

The slide quantifies the TOTAL COST / SQUARE FOOTAGE / # BEDS / COST PER BED / and COST PER SQFT for each project.

What is “illuminating” about the information?

Take a closer look:



Relative to the costs of the building purchased from a private Real Estate company ($216 per square foot, which is consistent to costs within the industry), the costs Penn State incurred on their in-house construction projects was from 67% to 117% HIGHER.

This, even though in the Harrisburg Dorm purchase, PSU was also buying the land (which figured into the cost of $216 per sq ft), and in the in-house projects, the land was “free”, and not included in the costs (land that PSU already owned, and that was NOT figured into the costs).

On those three In-House Dorm projects alone (Abington, Brandywine, and Erie), if the costs were equal to the normal costs of Private Developers, Penn State would have saved well over $50,000,000.

$50,000,000 that has now vanished into the ether – that will now have to be extracted from Penn State students and their families.

And the proof was staring the Penn State Trustees in the face, as they sat there in that Board meeting.











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