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At a dinner in San Francisco this year, an attendee suggested to Daniel Diermeier, the chancellor of Vanderbilt University, that the Nashville institution founded 150 years ago should build a campus in the Bay Area.
The proposal wasn’t completely out of left field: Vanderbilt was already designing a new campus in West Palm Beach, Florida, entering a 99-year lease for a former theological seminary in New York City and planning an expansion in Nashville, Tennessee.
The Bay Area has no shortage of world-class schools, with Stanford and the University of California, Berkeley, flanking the region. Nonetheless, “community interest is high,” Diermeier said, especially as a means to revitalize San Francisco’s downtown area. For its part, the university is attracted to the area’s tech and artificial intelligence ecosystems, which could serve as a draw for students and a vibrant source for jobs.
New campuses not only allow universities to meet potential students where they live, but can also have significant impacts on the surrounding cities. Much as professional sports teams have revitalized neighborhoods with real estate projects beyond arenas and stadiums, universities entering new communities can drive economic development by attracting new businesses that cater to students, faculty and staff. They can also act as community resources with programs and lectures open to the public, and can contribute to entrepreneurship through the development of patents and other innovations at the university.
“The research shows that universities are major drivers of long-term growth and prosperity as well as wages,” said Scott Andes, a professor at Carnegie Mellon University in Pittsburgh who also advises the school’s president on economic development. “The main driver is human capital — talented people coming and staying in a region, increasing the skills in the area.”
Northeastern University, for example, based in Boston, has expanded its presence to a total of 13 campuses nationwide in the past 14 years. (An additional campus, resulting from a merger with Marymount Manhattan College, is awaiting regulatory approval.) In November 2020, the university opened a graduate center and research institute in Portland, Maine, called the Roux Institute, which has been operating in a temporary location and is expected to open its permanent home in 2027 on the site of a former B&M Baked Beans cannery. The institute has helped propel the area — about 230 Northeastern employees now live and work in Maine, and affiliated startups have created 125 jobs in the state, said Renata Nyul, a spokesperson for the university.
Officials in other places are taking notice and enticing colleges with incentives that include property donations or reduced taxes.
In Florida, Keith James, the mayor of West Palm Beach, said that “having Vanderbilt in our downtown elevates us to becoming one of the top three cities in the state — if not the top.”
The university’s expansion plans there are happening at a time when top-tier colleges are contending with the possibility of losing federal grants as a result of the Trump administration’s attempt to curtail funding. In addition, beginning next year, the nation’s wealthiest universities will face large tax increases on their endowment’s annual investment returns, as part of the domestic policy bill passed in the spring. Universities are also grappling with lower enrollment caused by factors such as high tuition costs, falling birth rates and increased skepticism around the financial benefits of a college degree.
Still, because expanding a college’s reach to other states has proved successful, “it’s an option that a growing number of institutions are looking at,” said Peter Stokes, an educational consultant at Huron, a consulting firm, who previously worked at Northeastern.
Large public universities like the University of Texas have for decades opened satellite campuses, Andes said, but private universities have only more recently followed suit. Creighton University, based in Omaha, Nebraska, for example, opened a graduate life sciences campus in Phoenix in 2021. The center, which includes a medical school as well as five other graduate programs, has grown to 1,000 students and is considering further expansion, said Casey Hoag, a spokesperson for the college.
Vanderbilt’s new campus in Florida is also expected to have an annual enrollment of 1,000 students. It will bring on 100 faculty members, in addition to other staff, for the site, which will be geared toward graduate students in business and technology, Diermeier said. The projected cost: $300 million.
Like its potential project in San Francisco, the West Palm Beach satellite also evolved from a serendipitous meeting. Several alumni had traveled to Nashville in 2023 for a football game and used the trip to lobby university officials to expand to South Florida.
“They told us that the University of Florida had tried to build a campus in West Palm Beach, but the efforts fell through,” Diermeier said.
Last October, the local governments and the university agreed to a deal in which 7 acres would be donated to the university. The land’s estimated value is $58.8 million; West Palm Beach’s donation is worth $12.8 million, while the county’s parcel is worth $46 million, according to government officials. The chancellor said he expected it to be completed by 2029.
Florida is among the Sun Belt states where there is a “mismatch or undersupply of top-tier universities,” Diermeier said, which made the location attractive. The migration of asset management firms and investment banking, along with a nascent tech ecosystem in particular, also helped.
Diermeier said the school had determined that the benefits to build there outweighed the risks amid higher education’s current higher costs and lower enrollment challenges.
Vanderbilt’s site in Florida is in a less developed area of West Palm Beach known as Government Hill. The construction could create 5,000 jobs, along with 900 positions that will sustain the school once it opens, James said.
“I’m not looking for somebody to build more pretty buildings or occupy any of these beautiful buildings,” he said. “I’m looking for corporate partners that will help me build a sustainable healthy community.”
Stephen M. Ross, the billionaire founder of Related Cos. and owner of the Miami Dolphins, is one of those partners. Ross has committed $50 million for Vanderbilt’s new campus, and his company has spent billions developing West Palm Beach.
While Vanderbilt was hashing out the details in Florida, it was also negotiating to expand its small presence in the New York City borough of Manhattan. Last September the university signed a 99-year lease for the 2.7-acre campus of the General Theological Seminary of the Episcopal Church, a grand, Gothic-style campus near the High Line, the elevated park in West Chelsea. The lease includes absorbing the deferred maintenance on the campus, which sits on property that was underused and in disrepair.
Diermeier said the investment in the New York campus would be at least $50 million, which he expected would come from fundraising efforts.
“We were looking, but not with a lot of intent,” he said of Vanderbilt’s New York campus. “When this opportunity presented itself, we thought it was too good to pass on.” The university still has no concrete plans for how it will use the space.
Stokes of Huron Consulting said the expansion drive among universities is a departure from the traditional experience where “higher education is a college in a small city on a hill where people come to it.”
Instead of serving a limited population, Stokes said, “the new model is about taking an academic portfolio to the market niches that need it.”
This article originally appeared in The New York Times. © 2025 The New York Times
