Jay H. Shidler, investor, philanthropist and University of Hawaiʻi alumnus, has made an irrevocable commitment to increase his visionary gift to the Shidler College of Business to a total of $100 million. The Shidler College of Business was named after Shidler when he donated $25 million to the college in 2006, later quietly adding another $6 million. At the time, it was the largest single donation to the University of Hawaiʻi Foundation for the benefit of the University of Hawaiʻi. Shidler is committing to donate over his lifetime and through his estate an additional $69 million for the benefit of the college.
In addition to gifts of cash and marketable securities, Shidler will be contributing interests in income generated by land underlying a number of significant office buildings in the central business districts of major mainland cities. This specific type of interest in land leased to the building owner under a long-term ground lease is referred to as a “leased fee.” In addition to the donation of income interests in various leased fees, Shidler is contributing a 100 percent ownership interest on a leased fee underlying a Denver commercial office building. It is anticipated that, over time, UH Foundation will receive a portion of the ownership interests in other leased fees which currently provide an income interest. With these gifts, the college benefits from the receipt of escalating ground rent payments over a period of between 65 and 99 years.
Like Kamehameha Schools, which generates significant income from leased fees under homes and commercial buildings, the Shidler College of Business will now have an increasing source of predictable cash flow from which to meet long-term financial needs.
Largest single donor donation
UH President David Lassner said Shidler’s latest gift commitment is now the largest to any UH institution by a single donor and brings Shidler’s total philanthropy to UH to $100 million.
“We are incredibly grateful to Mr. Shidler for his continuing support of the University of Hawaiʻi and the college that bears his name,” Lassner said. “This latest gift will benefit Hawaiʻi residents and businesses for generations. It will have a lasting impact on the Shidler College of Business, the University of Hawaiʻi and the State of Hawaiʻi.”
Vance Roley, dean of the Shidler College of Business, said Shidler’s donation will solidify the college as one of the best business schools in the country. “This generous, reputation-building gift will enable us to continue to attract top talent, both students and faculty, while improving our graduate and undergraduate business programs,” Roley said. “This donation is another example of Mr. Shidler’s long-term commitment to the college. It will be used to support the creation of additional scholarships and professorship endowments, and build on the significant progress the college has made as a result of Mr. Shidler’s original gift.”
Shidler said he was encouraged by the college’s achievements since his first gift and wanted to ensure that progress continued. “I’m proud of what the college has been able to achieve over the past eight years in elevating its programs and securing its place among the top-ranked business schools,” Shidler said. “I know firsthand the impact the college has on emerging business men and women, and I am committed to do what I can so that Hawaiʻi continues to have a strong business school that will allow future generations of leaders to excel.”
Gifts secures the college’s long-term financial health
As part of the new $69 million gift commitment, Shidler has begun transferring to UH Foundation direct ownership interests in the leased fee underlying an office building in Denver, and income interests in leased fees underlying office buildings in Chicago, Charlotte, Columbus, and Nashville. Shidler also owns the leased fees under office buildings in Midtown Manhattan and other U.S. cities, which may become part of the gift. (Learn more about the gift)
UH Foundation President and CEO Donna Vuchinich said these kinds of management-free, long-term leased fee assets are an ideal form of income to be used to build an endowment and will provide secure and predictable income for the Shidler College for many decades to come. “The ownership of leased fees has greatly benefited a special group of educational institutions and their foundations across the country,” Vuchinich said. “In Hawaiʻi, the best-known example is Kamehameha Schools, which derives its multi-billion-dollar endowment primarily from the ownership of leased fee interests.
“The management-free, highly secure, fixed-income nature of leased fee interests has caused them to be called ʻthe U.S. Treasuries of commercial real estate’,” said Randy Moore, chairman of the UH Board of Regents. “A portfolio of these leased fees and their income streams is an excellent way to secure the long-term financial health of the university.”
Shidler said he hopes this leased fee based endowment model will be used by future UH donors to support and improve other UH schools, colleges and programs. “This is a way to provide the foundation with a portfolio of leased fee interests that will ultimately create steady investment income for the remainder of the 21st century,” he said.
More on Shidler
Shidler, an alumnus of the college (BBA ’68), is the founder of Honolulu-based The Shidler Group, which over the past 40 years has acquired and owned more than 2,000 commercial properties in 40 states and Canada. Shidler has founded and been the initial investor in over 20 public and private companies, five of which have been listed on the NYSE. Shidler served as a board member of the Foundation from 1994 to 1997. (Read more about him)