News, UCM News

Union Master plan Phase 1: Financing the plan

Committee to meet financial advisors next
week on Union renovations

The Elliott Student Union may get a facelift worth approximately $7.5 million.

The first phase of the proposed plan moves the main entrance, currently located under the clock face on the east side, to the south entrance near the visitor’s parking lot. The project also includes building an auditorium in the open courtyard area on the south end of the building with retractable seating for around 200 people or a dining capacity of 100.

UCM administrators say the project modernizes campus for current student needs.

“A student in 2018 is not the same as a student in 1988,” said Shari Bax, vice provost for Student Experience and Engagement. “There’s always an interest in ensuring that the university is presenting facilities and resources that meet students where they are at… and the university’s ability to do that is dependent on resources – which requires capital.”

That capital is often found in bonds, similar to loans, but from investors. Recently, the university had two bonds mature: one that paid for the Union’s renovation in 2015 and another for an energy saving project bond that was paid off in October 2017.

Next week, a committee overseeing the project is scheduled to meet with a bond counsel and with Piper Jaffray, a financial advising company, to establish the timeline for financing the project and developing a proposal for investors to issue a new bond.

Susan Brockhaus, executive finance director for Administrative Services, said Piper Jaffray will help the committee present proposals to investors as to why they should invest in the project and how the university plans to pay back the bond.

The current plan is to use student fees to pay down the debt.

“There are several finance options that include public offering or private placement. (Bonds) vary in length and maturity, but typically last 20 years,” Brockhaus said. “Annual payments are then paid from a portion of the Union student fees.”

Students pay $7.52 per credit hour for the Union if taking less than nine hours or $112.80 if taking nine or more hours.

Bax said university officials do not want to increase student fees.

“If we say we’re basically going to take out another bond, we’ll just keep paying the same amount that we’ve gotten used to paying, using that (fee) to pay for phase one,” she said.

Phase one is expected to begin in the next few months when the proposed bond goes to bid for investors. Once evaluated, the selected investor must be approved by the board of governors in April. After approval, the investors will start an estimated 12-week process that will close the bond pricing window – most likely mid-July. Construction is anticipated to begin in August, allowing a year turnaround for phase one’s completion.

This first phase of the project touches a limited portion of the master plan. Bax said other phases are unknown with the current financial future of the university, but would be guided using the master plan developed by CannonDesign and KWK architects about two years ago.

“There are limited pockets of capital available right now. The Union happened to be one of the areas where we had capital available to provide improvements,” Bax said. “As part of the larger effort for us to make us think ‘What’s next’… we’re constantly improving what we have to provide for the students.”

Bax said the administration is always thinking of what resources are available to make things newer and better for the next set of students.

“It’s part of the big picture,” she said.

1-24-18 Editor’s note: This version of the story corrects the spelling of Piper Jaffray, timeline of the project after the finance meeting and some structural issues.

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