With new luxury dorm, Orlando philanthropists offer Hillel evergreen funding model

ORLANDO, Fla. (JTA) – Real estate developer Hank Katzen has a dream: If you build it, they will come.

Except this is no baseball field in an Iowa cornfield. It’s a $60 million, 600,000-sq.-ft. luxury dormitory at the nation’s second-largest college campus, the University of Central Florida in Orlando.

When it opens in August, the new dorm will push the bounds of cushiness. Two- and four-bedroom suites will have island kitchens with stone countertops, in-unit washer/dryers and walk-in closets. Every room will come with en-suite bathrooms and flat-screen TVs equipped with premium cable. Duplex units will feature spiral staircases and two-story atriums with picture windows. There will be a resort-style swimming pool, 24-hour fitness center, sauna, game room and seven-story parking garage – so no student will have to take an elevator or brave the Florida elements on the way from their cars to their dorm rooms.

But what makes Katzen’s new facility noteworthy isn’t so much the lavishness as the idea behind it: to create America’s first self-sustaining Hillel. The ground floor of this seven-story building will include a new 20,000-sq.-ft. Hillel center whose operations will be funded in large part by rental income from the 600-bed dormitory.

The Jewish philanthropists behind this unique arrangement aren’t simply giving the 15-year-old Hillel at UCF a building; they’re giving it a permanent income stream.

“This is a remarkable gesture of philanthropy — the university desperately needs the beds, and Hillel could use this funding,” said Sidney Pertnoy, a Miami businessman and philanthropist who is chairman-elect of Hillel International. “There are some Hillels connected to some housing, but nothing even remotely resembling this model. It’s a unique cash-flow model and we’re super excited about it. We’re hoping this is a prototype for other communities.”

The unusual project is an attempt to address a perennial problem faced not just by Hillels, but by Jewish institutions around the world: How to create an evergreen funding source.

“There are communities around the country where a powerful donor provided an agency with a building free and clear only to find shortly thereafter that the agency was crushed by the operating costs,” said Katzen, the real estate developer and Jewish philanthropist who is spearheading the project and has become president of the board of UCF’s Hillel.

“The capital crunch and the Bernie Madoff double whammy has emaciated the endowment model for many organizations,” Katzen said. “We were looking for an economic machine that would take advantage of the opportunities afforded by a large university to connect a student housing project and our Hillel.”

The new venture in Orlando represents a collaboration between local Jewish philanthropists, Hillel and UCF. What makes the project viable, the donors say, are the university’s massive student body and limited housing supply. Over the last seven years, university enrollment has ballooned by 50 percent, to 60,000 — second only to Arizona State University. An estimated 5,000 to 6,000 of UCF’s students are Jewish.

Alan Ginsburg, a real estate developer and Orlando philanthropist, donated about $7 million to the project, including the land, which was purchased six years ago and is now valued at $12 million. Katzen, who used to be a Taco Bell franchise owner before turning to real estate full time when he moved to Orlando 20 years ago, is donating his time and construction expertise. The university’s nonprofit foundation will manage the dorm, collecting rental fees from the student residents, who will be Jewish and non-Jewish. A Catholic student center similar in size to Hillel will be housed on the site rent-free for at least three years.

After debt servicing on the 35-year loan and operations costs, the rental income from the dorm will be divided between the Hillel and the university foundation along a 60/40 split. All of which should deliver about $350,000 annually to the Hillel, for starters – if that is, the dorm, called NorthView, is ready and fully occupied by the fall semester. Rent starts at $800 per month per student.

“Social media got word around campus that we are the place to live, and the students are really knocking at our door,” said Zan Reynolds, executive director of real estate for the UCF Foundation.

The initial financing for the project came from Ginsburg, who wanted to do something to memorialize his son, Jeffrey, a fan of Hillel who died in a plane crash about 10 years ago.

“If it works, there could be a demand for this type of structure on most large campuses,” Ginsburg said. “It’s a very nice way for Hillel or any faith-based organization to have a steady income and not have to rely on donors. Most donors are a pain in the ass even if you can find them today.”

There are some other mixed use Jewish dorms in America, but nothing on this scale. The Chabad house at Rutgers University has a dorm attached to it, but its 107-bed facility is exclusively Jewish, governed by Orthodox rules and loses money rather than generating profit.

By contrast, the backers of the Orlando project said they did not want to create a Jewish ghetto, either in the dorm or the Hillel.

Ultimately, the success or failure of their venture will hinge not just on its financial viability but what it does for Jewish life on the fast-growing, relatively young Orlando campus. Currently, UCF has just a handful of Jewish student groups. There’s no real kosher dining option. Hillel’s Friday night meals, which are kosher catered from the outside, typically draw no more than 50 or so students.

That’s a lot fewer than the local Chabad house, which regularly gets 100-200, according to Chabad executive director Rabbi Chaim Lipskier. But the Chabad is more than three miles from UCF and also draws from two other area schools, Valencia and Rollins colleges.

UCF’s Hillel, which also serves those two other colleges, used to have a one-room office on the UCF campus but had to give it up about a year ago. For months, the organization has been run out of the dining room of its interim executive director, Sam Kauffman.

“Hillel student leaders spend a lot of time now just trying to get room reservations on campus,” Kauffman said. “Next year, they’ll have dedicated space for their events and can spend more time building their relationships and Jewish campus community.”

To anchor the project, a new Hillel director has been hired: Aaron Weil, a 10-year veteran of the University of Pittsburgh’s Hillel. Weil says he’s excited to move from a job where he must raise 80 percent of his $1.1 million budget to one where 50 percent will be generated automatically. As dorm rental rates escalate and the building’s debt is paid off, Hillel’s income should rise.

“Most Hillel directors have to deal with the daily struggle to raise funds to run the programs to sustain a vibrant Jewish campus life,” Weil said. “What’s unique about the UCF Hillel model is that it removes what I call the treadmill of soft money and replaces it with predictable income. Rather than consuming your time and your energy with existential fundraising, you’re able to focus on strategic fundraising.”

Having a gleaming new Hillel center won’t hurt, either. The new facility will include a theater, a kosher café, an auditorium for 300, a game room, offices and plenty of conference rooms and hang-out space. The philanthropists are planning a $2.5 million capital campaign to complete the interior of the Hillel space by the fall.

During a recent hard-hat tour of the construction site, Katzen told JTA that having a new facility and a top-tier executive will enable Hillel to tap the Jewish potential at UCF: If you build it, they will come. It’s a conviction based not on hope, he says, but years of research, five years of planning and then a year of breakneck-pace construction.

“It’s more than a ‘Field of Dreams’ voices in our heads sort of thing,” Katzen said. “We’re changing social architecture on a broad scale.”

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