Kravis Pledges $100 Million for Columbia Business School Campus
The donation will go toward construction of the business school’s new site in the Manhattanville section of New York City, where Columbia University is developing a second campus. One of the school’s two new buildings will be named for Kravis, Columbia Business School said today in a statement.
Kravis, 66, earned a master’s in business administration from Columbia in 1969 and has previously supported the university and other educational and New York-related organizations. He and his cousin George Roberts formed KKR more than three decades ago and continue to run it.
“We’re not just constructing a building, we’re building a community of entrepreneurs,” Kravis said in an interview. “If we don’t get our education system right, we’re going to be going backwards. I want to make sure this campus gets built. I think it will be phenomenal.”
Kravis helped pioneer the leveraged-buyout industry, which uses cash committed by investors and borrowed money to buy companies and sell them later for a profit. New York-based KKR’s 2007 LBO of power producer TXU Corp. for $43.2 billion including assumed debt is the largest on record. That deal topped transactions including KKR’s 1989 takeover of RJR Nabisco Inc., the subject of the bestselling book “Barbarians at the Gate.”
KKR is moving into new areas such as securities underwriting and debt investing as the buyout business recovers from the bust that followed the 2007 credit crisis, when funding for deals dried up. The firm made its debut on the New York Stock Exchange earlier this year after merging with a European affiliate. It canceled a 2007 plan to go public after the global credit crisis seized markets.
Kravis earned a bachelor’s degree in economics from Claremont McKenna College, and in 2006 he established the Kravis Prize in Leadership, awarded in conjunction with Claremont McKenna, which also houses the Kravis Leadership Institute.
A native of Oklahoma, Kravis has long worked to promote job creation and investment in New York. He is the co-chairman of the New York City Investment Fund, which he created in 1996.
He’s also on the board of directors of the Partnership for New York City, a network of the city’s executives who promote its economy.
“He’s the one who’s kept me most focused on how teaching and research space happens,” Hubbard said in an interview.
Columbia Business School is now housed in Uris Hall, a 12- story building that opened in 1964 following protests from architecture students who objected to its design, and Warren Hall, a 1999 facility it shares with the law school. Cramped conditions mean researchers share windowless cubicles and former basement space was cleared out to use as a laboratory.
“The building was a constraint,” Hubbard said of Uris Hall. “It’s not a constraint because it isn’t handsome, although it isn’t. It was a constraint because it didn’t let us do what we wanted to do.”
$6.3 Billion Project
The Kravis building will be among the first to be constructed at Columbia’s Manhattanville campus, a 17-acre site in West Harlem that will also house science and arts facilities. Demolition and site preparation work has begun on the $6.3 billion project, which won’t be completed until 2030. The business school’s buildings will open in about six years, Hubbard said.
To assemble land for the project, Columbia has turned to the state’s power of eminent domain, drawing a challenge in court by area landowners. In June, the New York Court of Appeals ruled that the university’s expansion was a “civic purpose” that allowed the state to use its power to acquire real estate. Two landowners have appealed to the U.S. Supreme Court, which has not said if it will hear the case.
Columbia Business School has 1,475 students in its MBA program, which is ranked seventh in the U.S. by Bloomberg Businessweek magazine. Graduates of the business school, which was founded in 1916, include Warren Buffett, chairman of Berkshire Hathaway Inc.; Vikram Pandit, chief executive officer of Citigroup Inc.; and Mario Gabelli, CEO of Gamco Investors Inc.
The Kravis building will be one of two buildings that together will cost about $500 million, Hubbard said. That makes them among the most expensive of recent business school construction projects. The Massachusetts Institute of Technology’s Sloan School of Management, in Cambridge, opened a $140 million building this year. Stanford University, near Palo Alto, California, will open the $350 million Knight Management Center next year.
The complex is named after Phil Knight, the founder of Nike Inc., who donated $105 million. The Yale School of Management, in New Haven, Connecticut, is planning a $180 million building to open in 2013. The University of Chicago Booth School of Business opened the $125 million Harper Center in 2004.
Hubbard said the new facility will allow students and faculty to work with local entrepreneurs in West Harlem as well as facilitate more open communication among students and New York’s broader business community.
“You need to have the best faculty, the best curriculum, the best students and the best facilities,” Kravis said. “One leg has been missing, and this will round out this great school.”