UA proposes $27.1M bonds to finance campus projects

FAYETTEVILLE — Bonds with a value of about $27.1 million will help finance University of Arkansas, Fayetteville projects including the initial planning phase for a new academic support building and renovations to the main campus library, according to a preliminary statement dated Thursday.

The statement, available to investors online through bond document publisher MuniOS, notes that the value of the bonds may change. The preliminary statement lists debt service requirements as totaling about $50 million, including approximately $22.8 million in interest payments, to be paid over 30 years from 2019 through 2049.

Listed in the preliminary statement are 10 campus projects the bonds will help pay for, including the new Student Success Center project approved in March by the University of Arkansas board of trustees at an estimated cost of $40 million to $45 million.

The project will be the first new academic building on campus since the 68,920-square-foot classroom building Champions Hall was finished in 2015 at a cost of $24.6 million, Mike Johnson, UA’s associate vice chancellor for facilities, said in an April email.

The Student Success Center has been described by Chancellor Joe Steinmetz as “a concierge service for students who are struggling.” The estimated 70,000- to 75,000-square-foot building will have space for tutoring, personal mentoring and faculty interaction outside of a classroom, according to the university.

Johnson said the estimated cost of the project in part has to do with its location in the “heart of campus” near the historic Old Main classroom building and similar structures.

“This means it will be built with a facade of Batesville limestone to match the surrounding buildings,” Johnson said, adding that the new center will feature high-quality interior finishes.

Johnson said plans for the center “include a major food service space that is more complex (and therefore more costly) than standard classrooms.”

Private funds and campus dining service revenue are also expected to help pay for the academic support building, Johnson said in April, with the statement dated Thursday describing the issuance as supporting “the initial planning phase” of the center. A December call for architects listed an anticipated completion date of August 2020, with construction to begin in 2019.

Also listed are projects including a renovation of levels three and four of Mullins Library “to create a collaborative and interdisciplinary learning space.” Another listed purpose of the bond issue is to help fund an additional phase of construction for an off-campus library storage building.

In an April meeting attended by UA faculty and staff members, the library renovation project was described as costing approximately $16.5 million. Renovation work also involves removing asbestos. A majority of books are being moved from the library to the off-campus storage facility.

Other projects listed in the preliminary statement include a renovation and expansion of Kimpel Hall, which houses UA’s School of Journalism and Strategic Media; an off-campus civil engineering research facility; and intramural sports facilities.

About $6.6 million out of the $27.1 million total will be issued as taxable bonds to help finance renovation of the UA student union food court area and a residential dining hall expansion.

The bonds, all supporting Fayetteville projects, are to be considered general obligations of the University of Arkansas board of trustees, according to the statement, backed with “pledged revenues” that include tuition and fees collected by UA and revenue derived from UA facilities financed with earlier bond issues, such as money paid by students for room and board.

The preliminary statement lists tuition-and-fee revenue totaling about $296.4 million in fiscal 2017, which ended June 30 of last year, an increase from the approximately $277 million in fiscal 2016.

The statement notes ties between trustees and the law firm that helped advise the bond issue and also a financial services firm involved with the underwriting of the bonds. UA System board member Morril Harriman, chief of staff from 2007-15 under former Gov. Mike Beebe, is an attorney with bond counsel firm Mitchell, Williams, Selig, Gates & Woodyard.

Board Chairman Mark Waldrip, a farmer and business owner, is the father of an attorney with the same firm.

The statement also notes that board member Kelly Eichler, formerly policy director for Gov. Asa Hutchinson, is married to an officer with underwriter Stephens Inc.

At a May board meeting, when trustees voted to choose as underwriters Arkansas firms Stephens Inc. and Crews & Associates Inc., they also directed UA System President Donald Bobbitt to work with campus finance leaders on a study of the process by which bond underwriting firms are recommended and selected.

Metro on 07/06/2018

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