Uncategorized Signet Capital arranges financing for the University of Kentucky’s Public-Private Partnership Campus Transformation Project, “The Cornerstone”

COLUMBUS, OH. (OCTOBER 01, 2020)

Signet Capital and Signet Real Estate Group showcased their creativity in approaching unique real estate projects, as true partners with the University of Kentucky (UK), to deliver a world-class, multi-use facility, branded as The Cornerstone.

Revitalizing one of the main corridors into the University of Kentucky’s campus, the facility bridges the University and the Lexington community. Spanning 308,269 square feet with a total construction cost of approximately $35,000,000, The Cornerstone includes an innovation lab, E-Sports Gaming Lounge & Theater, locally focused food hall, and parking garage.

The Public-Private Partnership model allowed UK to transfer the associated risks of delivering a project of this nature – including financing, construction, and project delivery – to Signet while maintaining approval control from a design, budget, timeline and use perspective. UK will be the eventual owner of the project and Signet will inject equity in the retail portion, serving as the long-term manager. Transferring this risk and associated workload for this scale of project allowed the University to maintain the allocation of its resources to what is ultimately the driving success of the University – excellence in teaching, research, healthcare, cultural enrichment, and economic development.

“Signet’s financial expertise and inhouse broker-dealer, with a municipal finance background, added considerable value in identifying the financing structure and team for the project,” said David Fumi, Managing Director of Signet Capital. “The financing process took a remarkable effort by all parties involved. Having a well-established relationship with both Frost Brown Todd (Underwriter’s Counsel) and KeyBanc Capital Markets (COPs Underwriter) provided confidence in the team’s ability to secure funding. The University was a great partner, bringing significant expertise, flexibility and professionalism as complex challenges were navigated.”

After exploring several financing solutions and associated pricing to support this project, UK and Signet landed on a Certificates of Participation (“COPs”) structure. This innovative approach was the first time a public education system in Kentucky utilized this structure, and it aligned well with the goals of the University. The tax-exempt component of the COPs structure substantially lowered the overall cost of capital for the University, allowing UK to receive the benefits of transferring a large portion of risk and workload to Signet, while maintaining a low cost of capital similar to if the University issued bonds directly. “The project was a true win-win by utilizing the strengths and expertise of both the private and public sectors,” said Fumi.

One of the nuances that required expert navigation was the challenge of how to bifurcate the project so the retail component would allow for Signet to both inject equity and secure financing for the completion and management of the retail space. The final partnership structure between Signet and UK for the retail was a pivotal component to support the social infrastructure of the University and the success of this project. Including retail in this key corridor between downtown and the gateway of the University made sense to promote the highest and best use of land with the future in mind.

The mixed-use structure includes retail, innovation, esports, and parking components to create a distinctive center for activity, creativity, and connectivity between the community and the University:

  • The Cornerstone Exchange retail space will feature exclusively locally owned restaurants in a modernized food hall, community-centered dining hub.
  • The innovation zone includes flexible, collaborative space to propel solution-driven thinking and design and create new pathways for entrepreneurial fields.
  • The Cornerstone Garage will add 900 new parking spaces for use by both the University and community.
  • The newly named UK Federal Credit Union E-Sports Lounge and Theater will include 100 retractable theater-style seats, and an esports gamers lounge with more than 50 PC-based gaming units and multiple console-play areas.

Beyond the University of Kentucky as lessee, Signet Real Estate Group as the Lessor and developer, and Signet Capital as the financial advisor to the developer, additional partners include Frost Brown Todd as Special Counsel / Underwriter’s Counsel, Dinsmore & Shohl as University Counsel / Disclosure Counsel, Commonwealth Economics as Financial Advisor to University, and KeyBanc Capital Markets as COPs Underwriter. The construction team was led by F.A. Wilhelm Construction, Sherman Carter Barnhart as Architect, and Tim Haahs & Associates as Parking Consultant.

“It was an outstanding team collaboration to structure and secure the financing for The Cornerstone,” said Fumi. “We are honored to have led the financing effort, which presents a long-lasting benefit to such a prestigious University, its faculty, students, and local community.”

About Signet Capital
Signet Capital, a Signet LLC company, is a boutique investment banking and structured finance services firm with extensive experience in working with companies that have debt financing or refinancing needs. Signet Capital is able to effectively assist companies in arranging and securing financing through its strong relationships with a large number of financial institutions and other traditional and non-traditional lenders. Signet works closely with its clients to secure the most favorable borrowing terms and has been successful in working on over $5 billion of debt financings. Learn more at http://www.signet-capital.com.

About Signet Real Estate Group
Signet Real Estate Group, a Signet LLC company, is a full-service development and project management firm in the areas of higher education, health care, research, public-private partnerships, and strategic infrastructure. The company transforms complex development challenges into collaborative opportunities through a creative, flexible, and customized approach. Since the firm’s inception, Signet and its family of companies have successfully managed and currently have in progress more than $5 billion in real-estate development and construction throughout the U.S. Learn more at https://www.signetre.com.

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