The University of Arizona will undertake a $250 million project of building a new 19-story student dormitory on the northwest corner of Speedway and Campbell, working with a nonprofit organization that will finance, build and operate the dorm.
The new residence hall will provide modern space for more than 1,200 students, plus a dining hall and amenities, according to Arizona Board of Regents public documents.
The project’s direct construction cost is estimated at $145 million, and the total cost of development won’t exceed $250 million.
The UA will have no debt obligation.
The former Palm Shadows Apartments at the northwest corner of Speedway and Campbell. They will be demolished to make way for a new 19-story dormitory for University of Arizona students.
Mortenson Development is buying a 2.49-acre property, where the former Palm Shadows Apartments sit, from the land owner. The nonprofit Collegiate Housing Foundation, or CHF, will, in turn, buy the land from Mortenson at fair-market value and hand it to the UA, “contingent upon CHF’s closing on tax-exempt bond financing that it will raise for the project.”
The financing will be paid back over an approximate 40-year-term and funded by associated residence hall fees, documents say.
Under a 50-year ground lease with the university, CHF will independently finance, develop, construct and operate the dorm.
Since the dormitory will be on campus, the UA will have authority for “regulatory compliance and design input.” The project may include ground retail leases, but the site's main use will be student housing.
The 2.49 acres will be combined with an adjacent UA-owned property of .5 acre to house the project. The UA estimates the value of the combined property at $27 million to $33 million.
Mortenson, a Minnesota-based real-estate development company, originally planned to build a privately owned 19-story student housing apartment complex on the site, but backed out last year due to increased construction costs, a drop in enrollment at the UA, and cooling rental prices.
The Arizona Board of Regents, which oversees the state’s three public universities including UA, discussed the university’s plans in private executive session at its meeting Thursday.
It then voted in public session to approve the project.
Pressing need for new housing, UA says
The UA plans to have the dorm ready for the fall 2028 semester.
Starting in fall 2026, the UA will ask first-year, full-time students to live in on-campus housing, and the university needs to update its housing options, UA President Suresh Garimella told the regents Thursday.
Rendering of the dormitory to be built at the northwest corner of Speedway and Campbell, with an 8-story portion and a taller portion expected to be 19 stories.
UA expects 6,000 on-campus residents from its first-year class this fall. It currently has capacity for more than 7,200 beds in existing residence halls, but plans to decommission some older dorms with costly maintenance needs.
Regent Fred DuVal said old dorms at UA are not particularly attractive or safe and have many deferred maintenance needs. That side of campus also has few dining options, he noted. Garimella said the new dorm’s dining hall will be open to all students.
“Ultimately, what you’ve done is you’ve reduced the cost of capital and that should reduce the cost to students, and that’s a priority for this board and I know it’s a priority for you and your administration and I think this financing has done that,” said DuVal.
Regents were complimentary of the project and how quickly the UA put it together.
Garimella said having a new, modern dorm will help UA retain students and see them graduate.
According to at least one study, there is a 50% higher graduation rate if students live on campus at least one year rather than living only off-campus, Garimella said.
“There is so much evidence both from the University of Arizona data but also national data, that the quality of living for students is really highly correlated with retention and graduation and that includes housing, that includes dining, that includes engagement,” Garimella said.
“What happens off campus is that even if there might be some good options, the lack of programming and oversight renders that option somewhat less beneficial for our first- and second-year students, especially dealing with landlords, dealing with some other things,” he said.
The site is immediately south of UA’s health sciences campus, “in close proximity to many other university buildings and has excellent public transportation access via streetcar, bus, and bicycle and pedestrian paths,” officials said in documents.
History of site proposals
A project for that corner was first proposed in 2018 as a residential, office and retail development, when the 2.5-acre site was bought by a local developer, and plans were approved by the Tucson City Council. After the pandemic wiped out interest in office space, the plan was shuttered and, after the landowner died, nothing more was proposed.
Last year, Mortenson Development announced plans to revive the project with nearly 400 apartments in a 19-story tower called Theory Tucson, with a retail component on the ground floor. A notice of intent to demolish the existing Palm Shadow Apartments was sent to area residents from Mortenson Development Feb. 3 with plans to begin demolition March 3.
A representative for Mortenson Development said he could not comment beyond what was in the notice to residents about pending demolition.
No land sale has yet been recorded with Pima County.
