The letter to the University System of Georgia, which was first shared on Twitter and reported on by Inside Higher Ed, has drawn ire of students and faculty at Georgia colleges who question if their schools’ decisions to reopen were financially driven.
The correspondences from Corvias representatives reminded the schools of the legal implications of breaking their contracts, which establish decades-long agreements — called a public-private partnership, or P3 in trade jargon — that allow the private company to take on the public universities’ debt, renovate or build housing and lease it to students.
In the letters, executives suggested that restricting the number of roommates per dorm would not curb the spread of the coronavirus on campuses.
“While the CDC may be of the belief that reducing density in student housing may lower the possibility of infection, we do not believe that requires a reduction in the number of roommates that would typically be permitted in the student housing or the number of students that can be housed in a given building,” according to the letters, which instead suggested schools limit occupancy of public areas such as elevators.
The Rhode Island-based company also argues that capping occupancy “will not ultimately benefit students or the University community” because displaced students would be forced to incur more expensive rent and be deprived of “the benefit of the same level of health-conscious operations” of on-campus housing.
A representative for Corvias did not respond to requests for comment from The Post. The company’s Twitter was set to private as of Friday.
The Georgia university system, Georgia State University and Wayne State University said the company’s recommendations had no bearing on their decisions to hold in-person instruction.
“I didn’t take it as a threat or anything,” Tim Michael, Wayne State’s chief housing officer, told The Post. “There was no thought that whether housing buildings were going to be full or not would impact the form of instruction.”
A spokesperson for the University System of Georgia told The Post and Inside Higher Ed that coronavirus plans were up to individual institutions but the Board of Regents reviewed plans and gave feedback.
“No USG institution factored Corvias’ demands into its campus housing plans for Fall 2020,” spokesperson Aaron Diamant said. “Those plans had already been submitted to the system and followed DPH and CDC public health guidance. Nor did Corvias’ letter cause subsequent changes.”
But a public agenda for a University System of Georgia’s senior staff call on June 10 details how the board’s “decision to reduce room capacity or rate” would be at its own “legal and financial risk, and likely invite a Corvias dispute and legal challenge.”
The agenda also shares how Georgia State University suggested it would allow for 75 percent occupancy of its Corvias housing, costing $3.1 million in lost revenue for the 2021 financial year.
Georgia State spokesperson Don Hale said that the university reviewed the Corvias contract to try to determine its financial obligations.
“Those considerations, however, did not influence our planning — the health and safety of students was our priority,” Hale wrote in a statement. “Furthermore, in the end we did not implement the plan because attrition made it a moot point.”
Students have increasingly opted for online classes or living off-campus as many colleges have offered accommodations to those who are concerned about campuses becoming breeding grounds for the highly infectious coronavirus. As the virus has surged in hot spots, universities have cautiously announced they will hold remote classes, including the California State University System, the nation’s largest four-year university system.
Although both are forging ahead with in-person instruction for fall, Georgia State University and Wayne State University reported drops in demand for on-campus housing.
Less than half of the available dorms at Wayne State are claimed, but interest in student housing has wavered with the tumult of pandemic updates, Michael said.
Wayne State would not bear a financial burden for failing to fill dorm rooms and doesn’t require its students to register for housing, Michael said. However, the company’s letter argued that the school “does not have the unilateral right” to institute a policy that would limit student housing occupancy.
Responding to Corvias, Michael wrote to the company that the administration was prepared to arrange a meeting with its lenders and Corvias executives.
“Given the emphasis in your letter about the security of loans and payments obtained by the partnership, WSU staff remains available to communicate jointly with you to the CCL-WSU, LLC lenders,” Michael wrote in a June 9 letter.
Corvias’s partnerships with schools are part of an increasing trend on college campuses to privatize student services with the aim of relieving schools’ debts. By leasing the revenue stream of students’ rent to companies, colleges can bypass the expense of managing housing.
But due to the coronavirus pandemic, the profit margins of these companies are under threat. S&P Global Ratings in March projected a negative outlook for all U.S. higher education privatized student housing projects.
Corvias took on $548 million in debt to build and renovate housing at nine Georgia universities and defease over $311 million in debt by the University System of Georgia, according to the letter its Board of Regents received, while the company has $307 million in debt to defease $120 million in debt at Wayne State.
Corvias’s website advertises that it manages 26,000 beds at 12 universities, including the University of Notre Dame and Purdue. Administration officials at Howard University, North Carolina Central University and Alabama College of Osteopathic Medicine, which have contracts with Corvias, told Inside Higher Ed that the schools didn’t receive letters from the company.
Corvias also provides housing to the Department of Defense and other government agencies. The company has faced allegations that its management made it financially difficult for military family tenants to leave neglected and defunct housing, as Corvias founder John Picerne had acquired hundreds of millions in fees and equity returns, a Reuters investigation found.
The letter to the University System of Georgia first circulated online after Georgia Tech student Kelly O’Neal shared documents she had public record requested in an attempt to understand the decision-making behind reopening Georgia schools. O’Neal told The Post that it wasn’t clear how the university system’s Board of Regents altered the schools’ plans.
“I still think there are a lot of questions that aren’t answered just based on how they’ve been making these decisions,” she said.
After the letter surfaced, the United Campus Workers of Georgia issued a statement Thursday calling on the university system to make public any communication about reopening with Corvias.
“This explains so much,” said Georgia Tech professor Brian Magerko said in the statement. “We couldn’t figure out why USG would insist on fully opening its campuses despite Georgia’s raging virus outbreak. Now we know what’s happening.”
“Corvias will lose money if students study remotely and it is trying to force USG to keep students in the dorms, despite the risks,” Magerko added.
In an editorial in her student newspaper, the Signal, Georgia State University student Raquel Croston criticized the school for rushing to reopen, seemingly prioritizing financial gains over the health of its students.
“The Corvias letter proves exactly what we all have not only speculated but known: There are financial obligations playing into the safety of our students before moral obligations,” Croston told The Post. “Corvias paid our debt, signed a contract, and now USG is cornered.”