At about this time back in 1998, the Trammell Crow Company arrived in West Philadelphia, ready to whip Penn's facilities services into shape as part of a multi-million-dollar outsourcing deal.
It was the dawning of a new day for Penn's less-than-efficient, less-than-cost-effective facilities management division, and administrators had high hopes for the deal, even if much of the rest of the University community was skeptical.
Four years and several setbacks later, Trammell Crow is in its senior year at Penn, but it is tough to say if the company is passing with honors -- or on the verge of failing out.
Administrators have been cryptic about the status of Trammell Crow's relationship with Penn and the company's future with the University, providing few, and sometimes contradictory, answers.
When asked about Trammell Crow's future at Penn when much of what remains of the 1998 deal expires at the end of this year, University President Judith Rodin acknowledged that administrators are examining Trammell Crow's performance but provided little other information.
"We are looking at our facilities and real estate services to ensure that we have the best management possible," Rodin said in an e-mail statement. "This review includes a review of Trammell Crow's role in facilities management."
That "review" may not wind up portraying Trammell Crow too favorably. According to one senior Penn administrator, speaking on the condition of anonymity last month, "The relationship does not appear to be operating as smoothly as the parties would like."
This could be quite a comedown for a company once essentially hailed as the savior of Penn's facilities division.
Back in 1997, the University community was stunned by an administrative announcement that facilities management would be outsourced to Dallas-based Trammell Crow, a real estate giant.
Administrators claimed that bringing in Trammell Crow would save money, cut response time for maintenance requests and generally increase efficiency.
"We need the kind of expertise that Trammell Crow brings to bring the level of service to the Penn community that it deserves," Rodin said of the company back in 1997.
The deal directly affected about 180 Penn employees, who had to apply to work for Trammell Crow. About 80 percent of those employees, who mainly worked as managers and support staff, were offered jobs by Trammell Crow, but they lost some benefits, notably tuition reimbursement for their spouses.
Shortly after that 1997 announcement, three employees whose jobs were in jeopardy -- plus the wife of one -- filed a lawsuit against the University, alleging that Penn was violating a federal law prohibiting employers from firing workers to avoid granting them benefits. A district court judge later threw out the suit.
In addition, several of the University's governing bodies were angry at the purported lack of consultation. The Graduate and Professional Students Assembly and the Undergraduate Assembly castigated the administration for what then-UA chairman Noah Bilenker called "a bad pattern of secrecy," while the University Council urged the University Board of Trustees not to approve the deal.
On the day of the Trustees' winter meeting, 200 students, faculty and staff members gathered in a last-minute rally on College Green to urge the board to reject the deal. But the Trustees did approve the contract, and the new management took over on April 1, 1998.
The deal was the first of its kind, a comprehensive outsourcing of higher education services to a for-profit firm. Penn became the flagship school in Trammell Crow's new higher education division.
Less than two years later, following complaints of inadequate and disorganized service, the University and Trammell Crow came to a mutual agreement to scale the deal back dramatically. Penn took back management of its on-campus facilities, leaving Trammell Crow with control of University City Associates, Penn's for-profit real estate arm, as well as construction project management and brokerage functions.
"When [the maintenance piece] didn't work out, we had to restructure the relationship, and that was the first sign of cracks developing in the relationship," the senior Penn administrator said.
Now, the contract for project management and brokerage will come up for renewal -- or termination -- at the end of this year, but administrators have been evasive on the future of the deal, with Rodin claiming "review" and Executive Vice President John Fry remaining virtually silent.
In an interview with The Daily Pennsylvanian two weeks ago, when asked about the future of the partnership, Fry said, "I'm not going to answer that question directly." He went on to affirm that he still believes the decision to outsource back in 1997 was sound, though "I think together, there are some things that we have not yet achieved, but I'll leave it at that."
Fry is not the only person who has declined to comment on the future of the relationship between the University and the real estate giant.
Trammell Crow Higher Education Services Group President Greg Latran has not returned repeated calls for comment. Company spokeswoman Barbara Bower also failed to return several phone calls, ultimately referring all questions to University City Associates General Manager John Greenwood.
And Greenwood refused to comment on any contract negotiations between his employer and Penn, declining even to confirm when the contracts will expire.
"I'm not going to comment on our contract-related business," Greenwood said.
According to Vice President for Facilities Services and Real Estate Services Omar Blaik, University officials will not sit down to discuss the future of the deal until the summer. Meanwhile, he maintains that the restructuring of the deal in 2000 solved the problems that had plagued the partnership previously.
"I really think that after we adjusted the relationship a year and a half, two years ago, at that point we dealt really with the structural problems that existed in terms of their expectation about the relationship and our expectations about it," Blaik said. Since that time, "it has been [a] healthy and positive relationship."
Since signing with Penn in 1998, Trammell Crow has built up an impressive portfolio of academic institutions to which it provides services. The company controls some functions, mainly related to real estate holdings and construction projects, at more than half a dozen schools, including Chicago's DePaul University and Penn's neighbor to the north, Villanova University.
Trammell Crow seems to be getting mostly positive reviews from the other schools in its higher education services portfolio, though none of those institutions have hired the company to provide nearly the same number of services as Penn did back in 1998.
"The University of Pennsylvania account probably represents [Trammell Crow's] largest level of comprehensive services provided," Greenwood said. "In terms of the variety of different services provided... [I] believe this is still one of the larger higher education accounts."
For example, DePaul brought in Trammell Crow only to construct student housing.
"Our relationship with Trammell Crow was one that we didn't contemplate being an ongoing relationship," DePaul Executive Vice President for Operations Ken McHugh said, describing the deal between his university and the company as "more of a traditional developer-client relationship."
Trammell Crow has also been working on a construction project for Villanova, and, according to Villanova Director of Facilities John Gallen, the university is considering bringing the company in to manage facilities.
Gallen is retiring soon, so his job will not be in danger if Villanova signs a contract with Trammell Crow, but he still feels threatened and uneasy at the prospect of an outsourcing deal.
"Our university has been dealing with them, much to my chagrin," Gallen said. "I'm hoping they don't bring in Trammell Crow because I don't think they're as effective... I think we can do facilities management in-house better and a lot cheaper."
Gallen maintains that the company is already doing a sub-par job on the construction work, so it should not be given control over facilities, as well.
"They're building a health center," he said. "It's a little bit late and it's a little bit over budget. That's what I'm trying to point out to the administration... I'm hoping that as I retire they don't just come in and contract it all out."
Though administrators at Penn claimed contracting with Trammell Crow would improve the way construction projects were run, new endeavors at the University have, like at Villanova, sometimes failed to progress smoothly.
"In construction, we want to ensure that many of the projects that [Trammell Crow delivers] for us are delivered on budget and on time," Blaik said back in 1997.
While Trammell Crow is not completely responsible for handling University construction projects, the company has played a crucial role in the projects that have proceeded as planned.
"I think it is very difficult for me to distinguish between what Trammell Crow does and what Facilities and Real Estate does," Blaik said. "We are one department, and they staff a component of our department."
Though many of the projects Trammell Crow and the University have collaborated on have gone off without a hitch, there are notable exceptions.
One of the projects Trammell Crow is responsible for overseeing is the Schattner Dental Building, which was originally scheduled to be completed in October of 2000 but is still under construction. Construction was halted in September 2000 because the University claimed the contractor defaulted on its agreement with Penn.
And the Houston Hall-Perelman Quadrangle project, which Trammell Crow started working on when it was about 60 percent done, was not completed until fall 2000 -- nearly a year behind schedule.
Blaik does not see a problem with the late projects, though, saying that it is normal and appropriate for a few buildings to be slightly late.
In addition to projects not on schedule, the campus is dotted with retail vacancies, from the former Starbucks site on 34th Street to the former home of the Friendly Express convenience store on 40th Street and several in between.
While Penn takes primary responsibility for retail planning, Trammell Crow "goes out and tries to execute on the retail strategy that we have," Blaik said.
Starbucks moved from 34th and Sansom streets to 34th and Walnut streets in December of 2000. The space, Blaik said, will soon be filled by Citizens Bank -- which will move from 36th and Walnut streets. There is yet another empty space at 34th and Sansom, the former home of University of Cards.
The Friendly Express convenience store, popularly known as Unimart, closed in October of 2000 after its lease expired. A Mexican grill was to open in the vacant storefront, located at 40th and Locust streets, but plans fell through last spring. The site remains empty.
And the Eckerd drugstore on the 3700 block of Walnut Street went out of business in April of 2000 and has not yet been replaced by a new retail establishment. According to Blaik, this has been done intentionally, partly because of the spot's location near the noisy Huntsman Hall construction site.
With Blaik claiming the relationship is "healthy," Rodin talking of "review," Fry refusing to answer and Trammell Crow officials hesitant to speak, the company's status at Penn seems questionable only four years after its groundbreaking deal with the University.
In its senior year, is Trammell Crow striving for magna cum laude status -- or limping its way toward academic probation?
