The proposal calls for demolishing Merit Residence Hall, which has 72 beds at West Dayton and North Park streets, and building a residence hall with a 400-seat dining space. A second hall would go on a parking lot at 115 N. Mills St. Together, the buildings would span more than 450,000 square feet.

Construction is scheduled to begin in June, with students expected to move in by fall 2029. The project still needs approval from the State Building Commission and the Legislature’s Joint Finance Committee.

The plan uses a public-private partnership. The Board of Regents would retain ownership of the land, while Milwaukee-based PRG Badger Properties LLC would own the buildings. UW-Madison would lease them for about $29.7 million a year and could purchase them at fair market value after 10 years. The university estimates annual operating costs of about $13.8 million.

Construction could cost as much as $338 million, though state agencies are working to reduce the projected price. If delays disrupt the schedule, the developer would cover temporary housing for affected students, said Cindy Torstveit, UW-Madison’s associate vice chancellor for Facilities Planning & Management.

UW-Madison spokesperson Gillian Drummond said university housing revenues would cover the project, including lease costs, and that tuition and taxpayer funds would not be used. The state received 11 proposals before selecting PRG Badger Properties, according to materials presented to the regents.

The expansion comes as campus housing struggles to keep pace with demand. Residence halls are at 115% capacity, with lounges and study spaces converted for housing and some double rooms used for three students. Even with those measures, the university lacks space for about 1,000 returning and transfer students, and other students are on waiting lists.

More than 8,500 first-year students enrolled this school year after UW-Madison received about 75,000 applications. The university’s most recent residence hall, Leopold, opened in 2013 with 175 beds; since then, the freshman class has grown by more than 2,000 students, said Jeff Novak, associate vice chancellor for University Housing.

More than 93% of first-year students choose to live in campus residence halls, Novak said. Administrators expect rates in the new buildings to be similar to comparable rooms at Smith and Ogg halls, which cost about $9,250 to $10,150 per school year.

The housing squeeze extends beyond campus. A 2024 study found an average 98% occupancy rate in Madison off-campus rentals, leaving little room to absorb additional demand as Dane County and the region grow.

The plan drew questions from some regents about how it reached the board. Regent Joan Prince said the board should have had more opportunity to discuss the proposal before a special meeting was called for a vote. Board chair Kyle Weatherly said he would work to keep regents informed as the process continues.

UW-Madison sought permission in the previous state budget to add as many as 2,000 beds using university resources, but did not secure approval. The university is now pursuing the project through the partnership model, with state and legislative reviews still ahead.