For Utley, Waterview is a brilliant real estate venture, one that's already provided his family with millions of dollars in profits. He says it will also provide UTD with tens of millions of dollars over the next 25 years. "It's a win-win deal for everybody," says Utley, a heavyset man with silver hair ringing the crown of his head and blue eyes peering out from rimless glasses.
It all began, he says, with a question put to him in the mid-1980s by Jess Hay, then the chair of the UT Board of Regents: How could student housing be provided at UTD?
Mark Graham
Security is "heavily enforced" at Waterview Park? That
depends on your notion of "heavily." It didn't seem too
heavy for Prathap Rajamani, right, who was allowed to
stay at Waterview after admitting he raped a fellow
student.
Mold and water damage are easy to find at UTD's on-campus dorms. Competent repairs are harder to find.
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The university was about to undergo a change in identity. Since its inception in the 1960s, UTD had been a small commuter school that mainly provided graduate courses in engineering and the sciences. The university needed housing for its students. And it wanted to grow by offering four-year degree programs for undergraduates. But where would they live?
Utley came up with a novel idea--he would build, own and manage student housing on the UTD campus using his own resources to underwrite the initial deal. "The first property was built totally on our credit," he says.
The first 200 apartments, known as phase 1, opened in 1989. Over the next six years, Utley added three more phases under the same terms as the first. By 1995, Waterview had grown to 696 apartments.
Then UTD officials decided they wanted to own a piece of Waterview. Utley's company would build and manage future additions, but UTD would own them. That's what happened with the next 541 apartments.
In 2002, the Utleys approached the university about selling their interest in the first four phases. But the UT system rejected the request. Utley says his family came back with a different pitch: They would form a nonprofit foundation that would buy the 696 apartments. The deal would be financed with $55.4 million in tax-exempt bonds. Utley says his family's partnerships sold the 696 apartments for their appraised value, which he wouldn't disclose.
Utley insists the family's motives in selling the property were altruistic. "We decided that setting up the foundation and letting them buy the property at a reasonable price could be a benefit to the university long-term," he says.
UTD gets to keep all the money that goes to the foundation other than what's needed to pay off the bonds, which, with interest, comes to $112 million, Utley says. Over the next 25 years, he adds, the 696 apartments will provide UTD with more than $50 million. In all, he says, the entire complex will take in $300 million in rent, with the profits going to UTD.
While UTD and the Utleys rake in millions, Waterview residents pay premium prices for what many residents view as substandard housing. Utley insists, however, that "the value received for what's paid is one of the best in the country."
A comparison of rents at UTD and other nearby apartment complexes suggests otherwise. For example, Waterview charges $602 a month for a one-bedroom, one-bath apartment with 667 square feet. Two nearby complexes charge less and offer more space. A one-bedroom, one-bath apartment with 674 square feet at Summer Villas in the 17000 block of Preston Road costs $580 a month. Carlton Court, located in the 13000 block of Maham Road, charges $531 for the same apartment with 690 square feet.
Waterview has allowed UTD to expand dramatically. Its enrollment, slightly more than 8,000 in 1989, now exceeds 14,000--a 75 percent increase. Utley says he's had no problem filling Waterview. Nevertheless, the university recently made several changes to increase occupancy. It allows staff members and faculty to live at Waterview, and now a person enrolled in as few as three hours of UTD classes can rent an apartment there--and his or her roommates don't have to be enrolled.
Utley predicts that Waterview will remain the sole source of on-campus housing for UTD students until 2045. Which, in Lovitt's view, is exactly as it should be.
"It helped us grow enrollment, and we have apartments on campus with no financial risk," says Lovitt, who will retire in May.
Several students said they were outraged to learn the Utley family had made millions off Waterview--and UTD stands to make tens of millions more--in exchange for problem-plagued housing. They say UTD officials should invest some of those profits in Waterview, but Utley says conditions and maintenance will improve only if UTD increases rents.
As for his family's Waterview profits, Utley sees it in relative terms. "We made about 10 million bucks--net," he says, the trace of a smile tugging at the corners of his mouth. "Is that a lot?"
