A federal jury awarded nearly $3.3 million to a provider of housing for Auraria campus students who alleged that a rival operator’s exclusive deal with the University of Colorado Denver to provide downtown housing to freshmen was an unfair monopoly.
Auraria Student Housing at The Regency sued in federal court in 2010 over an agreement CU Denver made years earlier with Campus Village Apartments, saying it was a conspiracy that violated antitrust laws by putting a stranglehold on housing for freshmen and new international students.
Auraria Student Housing, or ASH, sued Campus Village, not the university or Auraria.
The jury reached its verdict of $3.26 million in less than an hour of deliberation. Federal antitrust laws say an injured party is entitled to three times the amount of injury it has suffered.
In the five-day trial, presided over by U.S. District Court Judge William Martínez, ASH argued the arrangement was made in 2004 — two years before Campus Village was built by the University of Colorado Real Estate Foundation, known as CUREF — and implemented a year after The Regency had already opened.
CU Denver and CUREF agreed to require all new international students and any incoming freshman whose home is more than 50 miles away from the downtown campus to live at the 685-bed Campus Village. Though the school describes the complex as on-campus housing, it actually falls outside the Auraria campus footprint.
ASH said the restriction harmed competition and caused students to pay more for housing than they could have paid elsewhere.
“This case has always been about choice — giving students the freedom to live wherever they want,” Regency owner Rob Salazar said in an e-mail to The Denver Post.
Campus Village said it disagreed with the verdict.
“Freshman residence requirements have been recognized by courts across the United States as a lawful effort and provide students with the best educational experience,” the company said in an e-mail to The Post. “A residency requirement offers many students who are living away from home for the first time access to university-oriented programming and oversight. We continue to believe these programs and opportunities are valuable and legally appropriate.”
ASH offered evidence showing no statistical improvement in CU Denver student retention or graduation rates following enactment of the restriction.
Campus Village can appeal the verdict, but if it does, must file a bond for the full amount of the judgment.
Though the verdict takes into account the amount of revenue ASH says it lost from 2007 through 2014, it does not immediately lift the restriction, which would require a judge’s order.
CU Denver spokeswoman Ann Williams said in an e-mail that the school is making no changes.
“Like numerous other universities with residency requirements for students, CU Denver finds great benefit in offering a living environment with university-oriented programming and oversight and has no plans to revisit that requirement at this time,” she wrote.
On Wednesday, CU Denver’s website still said freshmen are required to live at Campus Village, and said “No other apartments or buildings meet the live-in policy requirement; students may NOT live at the Auraria Lofts (formerly the Inn at Auraria) or the Regency.”
CU Denver is the only university in the U.S. that requires freshmen to live in privately owned off-campus housing, ASH said. Many schools, including CU Boulder, restrict freshmen to on-campus university-owned dormitories.
The verdict also does not reimburse any of the approximately 2,100 students — about 400 per year — who were required to live at Campus Village and, according to the lawsuit, overpaid for their apartments and meal plans by as much as $4,100 each.
In more than 50 instances students were tripled up in Campus Village apartments designed for two, the lawsuit showed.
No class-action lawsuit for impacted students, many of whom have graduated, has been filed.
University officials testified that the agreement was not meant to monopolize the housing market or to ensure a steady revenue stream to pay the bonds issued to finance the project.
Instead, the officials — former associate vice-chancellor Frank Sanchez and former provost Mark Heckler, both who signed the deal — said the agreement was designed to ensure a better quality of life for students.
Heckler has been president of Valparaiso University in Indiana since 2008. Sanchez has been vice chancellor for student affairs at the City University of New York since 2011.
The 150-acre Auraria campus is home to three schools — CU Denver, Metropolitan State University of Denver and Community College of Denver — and about 36,000 students. A 2004 study commissioned by the Auraria Higher Education Center found a strong need for student housing.
As a result, the campus today is served by three complexes built or rehabbed specifically to meet that need: The Regency, Campus Village and Auraria Lofts, which is the top 13 floors of the Executive Tower in downtown Denver.
The Regency had been a run-down hotel on the west side of Interstate 25 at West 38th Avenue, just north of the old Mile High Stadium. Denver officials closed it in April 2004 due to repeated fire-code violations. It was purchased by its current owners, Regency Realty Investors LLC, in September 2004, rehabbed and opened to students in 2005.
Campus Village was built on a former metals transport site and financed with a $50.36 million bond issue put together by the Colorado Education and Cultural Facilities Authority. Those bonds were retired in 2008 with a subsequent $54 million 30-year bond issue.
David Migoya: 303-954-1506, dmigoya@denverpost.com or twitter.com/davidmigoya
