Chris Scullin / Lantern photographer
Ohio State and Huntington Bank have agreed on a $125 million deal that gives the Columbus-based bank exclusive rights to campus in exchange for a $25 million lump sum payment and future investment in the surrounding area.
Representatives from Huntington and the university will formally announce the 15-year partnership at noon Thursday, which could open up to four Huntington Bank branches on campus.
Geoff Chatas, chief financial officer of OSU, said this money will be used directly to improve the “academic core” of the university.
“It’s a significant amount of money we will be investing into the student experience at Ohio State,” Chatas said. “What we’re trying to do is to create a unique partnership with Huntington really for the benefits of students, faculty, staff and alums.”
Shelly Hoffman, spokeswomen for the university, said it will be a one-time payment at the beginning of the 15-year partnership.
“But we also will receive income on top of the $25 million, paid each year as people sign up for Huntington services,” Chatas said.
Chatas said $10 million of the $25 million will be put directly into the endowment and used for classroom improvement.
“There is plenty of renovation on campus that needs to be done,” Chatas said. “Whether it’s the renovating of classrooms or investing in different programs at Ohio State.”
David Schamer, director of not-for-profit banking at Huntington Bank, said this partnership is one of a kind.
“The banking deal will be off the charts,” Schamer said. “But let’s go even beyond that to the members of the community. We’re going to deploy our lending capacity and availability into the university district, and even beyond into different economics projects that relate to the university.”
Huntington and OSU have established an agreement that Huntington will provide $100 million in lending power to the university area to improve the economic development of the area.
“How can we continue to invest in the economic development around the university?” Chatas said. “Some of that will be direct lending into businesses in the university district, but none of it is defined yet.”
Schamer said this deal is “unique” because of the positive impact it can have on the university area.
“We approached this deal differently,” Schamer said. “What’s good for Ohio State is good for the community, and it’s good for us.”
Chatas said the details of where the $100 million might go is still being worked out.
“One thing we are looking at is how the university will be a partner in development east of High (Street),” Chatas said. “It’s still very early, so we don’t have any specific retail ideas, but a lot of that will be coming out in the next couple of months.”
President E. Gordon Gee said in a statement he is excited about the new partnership.
“Through this collaboration, we are able to provide a better learning environment on campus and strengthen our neighborhoods in critical ways,” Gee said. “I am grateful to Huntington for investing in the university’s core academic purposes — to educate young people and to enrich the lives of 11 million Ohioans.”
Schamer said the ultimate goal was to increase customer service for students who choose to be Huntington customers, and noted that using Huntington services is 100 percent optional.
“Our first aim is to provide incredible convenience for the students. Once this deal kicks off, we’ll have multiple branches on campus,” Schamer said. “We’re going to have over 20 ATMs (in the campus area).”
One option that will be available to students in the beginning of March is the ability to link their BuckID to their Huntington debit account.
“The current pre-paid availability will remain, but in addition to that, they will have debit-pin availability,” Schamer said.
Chatas said this option is “not a requirement.”
The university is in contracts with several other banking entities on campus including U.S. Bank, which has a branch in the Ohio Union.
“We will honor the contracts we have in place now,” Chatas said. “At the end of the contracts we will not be renewing them.”
Hoffman said of all the current contracts of banking entities on campus, the last lease, with U.S. Bank, will expire in 2015.
“However, there are renewal options that U.S. Bank could exercise that would extend the contract,” Hoffman said.
Schamer said if a student chooses to bank with Huntington, they will be protected.
“We are going to protect students. We’re going to keep them away from fees and provide them with overdraft protection,” Schamer said. “We are not going to market credit products to students actively … We don’t want students to get in trouble with credit.”
Schamer said faculty and staff at OSU will have the option to get checking accounts that Huntington employees can get.
“(Faculty and staff) will get the same account that you would get if you were an employee of Huntington,” Schamer said. “We call it Huntington Plus Checking … There are a lot of benefits in there.”
Stephen Steinour, chairman, president and CEO of Huntington, said in a statement Huntington is “delighted” to be in partnership with OSU.
“Huntington believes strongly that partnerships like this can help universities grow and prosper, while providing their employees, students and alumni access to valuable financial services and benefits,” Steinour said.