IOWA CITY, Iowa (AP) — One of the world’s largest banks will reap a windfall from the University of Iowa’s multi-billion-dollar plan to outsource its utility operations before students or faculty see any benefit from the deal.

Wells Fargo is expected to get nearly 1% of the nearly $1.2 billion payment that the university has negotiated in exchange for leasing its utility system to a private operator, a school spokeswoman confirmed Friday.

The university hired the bank last year to work as its strategic advisor on a plan to monetize its utility assets through a long-term management contract.

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The Iowa Board of Regents on Tuesday awarded a 50-year contract to a private company to operate the university’s steam, cooling, water, and electricity plants and infrastructure. Gov. Kim Reynolds hailed the deal as a way to generate revenue for higher education, but Democratic critics called it risky.

The company, a new collaboration of two French firms, will pay the university $1.165 billion upfront. Nearly one-quarter of that money is expected to come from Iowa-based investors that the university has refused to identify.

About $1 billion of the upfront payment will go into an endowment after the university pays off its utilities debt of $153 million and an estimated $13 million to Wells Fargo and other consultants. The endowment will be used for strategic education and research initiatives and to subsidize energy costs that will include tens of millions of dollars in annual payouts to the operator.

Wells Fargo’s contract, obtained by The Associated Press, shows that the bank was to be paid only at the “successful conclusion of a monetization transaction.” Its fee would begin at 0.75% of any transaction’s value and escalate if the deal exceeded expectations.

University spokeswoman Anne Bassett said the university and the bank agreed on a base estimate of $700 million after receiving preliminary information from potential bidders.

Since the final transaction is roughly 40% higher than that, Wells Fargo’s fee will escalate to 1% and 1.25% for portions of the value.

On Thursday, Bassett said the university was anticipating the firm’s fee will average about 1% of the deal, or $11.65 million. On Friday afternoon, she provided a more detailed calculation estimating that Wells Fargo will receive about $10.45 million.

The university hired Jones Day to serve as its legal counsel for the transaction, and has paid the law firm more than $1 million to date, university figures show. Two other firms were hired to review the condition of the utilities and to give advice on the tax implications.