UConn Seeks to Buy Nathan Hale Inn for Student Housing

Trustees have authorized the University to negotiate purchase of the hotel to accommodate more students on campus.

The Nathan Hale Inn. (Peter Morenus/UConn Photo)

The Nathan Hale Inn. (Peter Morenus/UConn Photo)

The Nathan Hale Inn. (Peter Morenus/UConn Photo)
The Nathan Hale Inn on the Storrs campus. (Peter Morenus/UConn Photo)

The Board of Trustees has authorized UConn officials to negotiate an agreement to buy the privately owned Nathan Hale Inn, potentially helping to meet demand for more student housing as the University expands and draws an increasing number of new undergraduates.

“UConn’s acquisition will be a cost-effective way of meeting some of UConn’s short- and long-term student housing needs,” John Biancamano, interim executive vice president for administration and chief financial officer, wrote in a memo to the board, which gave its approval Wednesday to pursue an agreement.

The Nathan Hale Inn is located on UConn-owned campus property, but the inn was privately constructed and has been privately owned since it opened in 2001. UConn has leased approximately half the rooms for student housing since the start of the 2014-15 academic year, and if a purchase agreement is reached, the entire building would transition over time to a residence hall with no hotel component.

“This building has proximity to other university residence halls, so it would make an important contribution to meeting our need for additional student housing,” said Michael Gilbert, UConn’s vice president for student affairs.

The purchase price would also be significantly lower than the cost of building an equivalent dormitory if an agreement is reached.

In addition to the anticipated $8.3 million purchase price, University officials say roughly $648,000 would be spent on code compliance improvements, deferred maintenance, and other items. That would bring the total cost to just over $9.1 million.

By contrast, new residence halls cost roughly $100,000 per bed, based on UConn’s recent experience in the market. With the Nathan Hale capable of housing 280 students, that would put the cost of an equivalent dormitory at roughly $28 million.

The possibility of purchasing the Nathan Hale Inn was presented in September, when a third party offered $8.3 million to the Nathan Hale Inn’s owners. Under the terms of UConn’s lease with the company, the University possesses a “right of first refusal,” which allows it to purchase the hotel for the same price as a private buyer.

Given UConn’s need for student housing – and the fact that the University already pays to use 50 of the Nathan Hale Inn’s 98 rooms as student living spaces – the purchase makes good sense, UConn officials said, adding that occupancy for student housing at UConn has exceeded the design capacity in each of the last 13 years.

Some students rented rooms on their own at the Nathan Hale in past years in lieu of living in residence halls, and in fall 2013, the University reserved 17 rooms in a block – the equivalent of one floor – that it then rented to students as housing for the 2013-14 academic year.

The University expanded that use this fall to 50 rooms at the Nathan Hale for student housing for the 2014-15 academic year.

In addition to being near the academic core of campus and proximate to several dining halls, the Nathan Hale has been popular with those student occupants. Many who lived there in the 2013-14 academic year returned there this fall.

If the building is purchased, university administrators say it initially would remain a hotel, with 50 rooms used for student housing and 48 for hotel guests, until a viable plan is developed for another hotel near campus.

Under the terms of the original agreements for the construction of the Nathan Hale Inn, UConn is prohibited from either building a hotel of its own or promoting a privately run hotel anywhere within 15 miles of campus until 2050 – which, University officials say, is another good reason to pursue the purchase of the hotel, since it would effectively terminate this restriction.

If the purchase of the Nathan Hale is completed as planned, it’s still too early to determine whether UConn would seek to build another hotel on campus, partner with a private firm to develop a hotel, or watch to see what the market produces.

The University’s expansion under the Next Generation Connecticut plan is expected to draw thousands of additional students to UConn over the next several years. Plans already are under way to build new residence halls to house students in the Honors Program and in STEM fields (science, technology, engineering, and math).

If enrollment growth precedes or surpasses University targets, the 280 Nathan Hale Inn beds will continue to be critical in meeting student demand, according to materials presented to trustees for their consideration.

If enrollment growth lags, it’s expected that upper-division transfer students and more graduate students – neither of whom are currently guaranteed housing – would have the opportunity to get housing on campus, ensuring strong occupancy of all residence halls, including the Nathan Hale.