SMU Secures $139M Bond to Build Flagship Campus in Oakland City Center
Samuel Merritt University (SMU), a national leader in health science education, is one step closer to breaking ground on a new flagship campus in Oakland City Center. In December 2022, SMU secured $139 million in bond financing for the project.
SMU is investing an additional $120 million of its own reserves to complete the facility. The 260,000-square-foot hub was announced November 3, 2022, and construction will begin in mid-2023.
The $139 million bond issuance is one more sign that Samuel Merritt University is thriving during challenging times for both higher education and the healthcare industry.
“The new campus will bring the most advanced capabilities to health science education, including the quadrupling of our sophisticated simulation space. This is all geared toward educating the best practitioners for the coming decade as we combat a critical shortage of trained healthcare professionals.”
— Dave Lawlor, SMU Executive Vice President and Treasurer
California faces a 14 percent gap between the number of available working nurses and the current demand. It ranks twelfth from the bottom nationally in the number of nurses per one-thousand people, despite being the most populous state. SMU is uniquely positioned to meet this crisis. The school currently enrolls about 2,000 students per year and graduates more nurses than any other not-for-profit institution in California.
“A new campus in the heart of downtown Oakland will support our vision of doubling enrollment in the next ten years. SMU must grow enrollment in order to address the growing healthcare workforce needs of California and the U.S.”
— Ching-Hua Wang, SMU President
Moody’s Investor Services assigned initial A3 issuer and revenue bond ratings to Samuel Merritt University in September, prior to the inaugural issuance. The 30-year, tax-exempt series 2022 bonds were issued by the California Municipal Finance Authority. Barclays and Prager served as underwriters.
Among the reasons for the A-category rating, Moody’s cited “SMU’s very good brand and strategic positioning” as well as good governance and a strong student demand for the school’s programs.
John Augustine, Managing Director at Barclays’ Higher Education and Academic Medical Center Finance Group, who oversaw the issuance, called the rating “a recognition of the University’s strengths.”
Augustine said the offering received over $750 million in total orders from more than 20 institutional accounts.
“It was a remarkable response by the market and impressive for a first-time issuer. The robust investor participation allowed the University to achieve an attractive financing yield.”
— John Augustine, Barclays Managing Director
“The bond issuance represents the first time in its 113-year history that Samuel Merritt University has received outside funding for a capital project, which is a crucial component in the University’s strategic plan,” added Lawlor.
The new campus — a state-of-the-art, 10-story building — will feature 20 classrooms; cutting-edge anatomy, physical therapy, occupational therapy, and podiatric medicine labs; a new Motion Analysis Research Center (MARC); a makerspace; and more. Three floors of the facility will house a new Health Sciences Simulation Center (HSSC) dedicated to experiential immersive learning. The center will occupy 41,000 square feet, quadrupling SMU’s current simulation space footprint. The design features classrooms and conference spaces in addition to tripling the number of simulation suites available to students and faculty.
The simulation suites deliver both manikin-based and standardized patient (SP) simulations involving actors. SMU Interim Provost and Vice President for Academic Affairs Celeste Villanueva said the expanded space provides “more opportunities to simulate not only acute care settings, like hospitals, patient rooms, ICUs, ERs, or ORs, but also home environments and community environments, which are increasingly important for the future of healthcare.” Simulation-based, immersive learning in realistic, hands-on settings fosters teamwork among students and facilitates learning to interact with patients and other caregivers. Villanueva said, “our expanded space will allow us to do a lot more interprofessional team training.”
The new HSSC will contain a full inventory of task trainers and integrate virtual reality (VR) and augmented reality (AR) technologies to deliver a rich student experience. VR gear will provide immersive experiences and allow offsite collaboration between students and faculty at SMU’s other campuses. AR tools will overlay a real-world environment with virtual visual displays to enhance simulated scenarios, while artificial intelligence–driven software creates dynamic and personalized experiences.
“This is what employers expect these days. This is an expectation that healthcare systems will have of the students that graduate from health professions educational programs. The expectation is that they will have simulation training. The difference is how much do they have and how well is it done? Is it consistently integrated into the curriculum across our programs? And once again, was there an emphasis on the interprofessional aspect of their simulation curriculum?”
— Celeste Villanueva, SMU Interim Provost and Vice President for Academic Affairs
Plans call for the new HSSC to house the Center for Practice Excellence, a collaborative partnership between Samuel Merritt University and Kaiser Permanente, Sutter Health, and other healthcare systems to deliver simulation-based continuing education for their doctors, nurses, and a range of healthcare professionals.
“I do think that the HSSC allows us to grow enrollment more easily. One of the goals is to be able to educate more people. Some of our programs have demand that fully outstrips our ability to serve it. Having this campus can help us grow enrollment.”
— Lisa Zuffi, SMU Board of Regents, Finance Committee Chair
In addition to expanding enrollment and enhancing the student experience, the building project will deepen SMU’s connection with the Oakland community. Samuel Merritt University’s new flagship campus will take shape on land that was once part of the Oakland City Center Redevelopment Plan. The new headquarters will help continue the revitalization of Oakland City Center with a new Center for Community Engagement and a publicly accessible plaza, which will feature community programming and bring foot traffic and commercial activity to the area on evenings and weekends.
“It strikes me what an impactful project this is for Oakland and how exciting it is to see it come to fruition. SMU will bring thousands of people every day into that building in the middle of downtown Oakland, right above the 12th Street BART station. I think it will change things for Oakland and for SMU dramatically,” said Zuffi.
Construction is expected to begin on the flagship Oakland City Center Campus in May 2023.