The University may pay off millions of dollars in debt to the Oregon University System, purchase new land and eventually build new residence halls within two years if Westmoreland Apartments is sold, a University administrator announced Monday.
The new ideas also rule out a prior proposal to purchase more property in Portland with the money, Vice President for Finance and Administration Francis Dyke said.
“Certainly, Portland’s off the table, because I’ll tell you quite frankly, we learned something that provides a very valuable opportunity for us,” she told the Emerald on Monday afternoon.
The University has the opportunity to pay off approximately $10 million in debt owed to the OUS, possibly with the funds from the sale, Dyke said.
University Housing currently makes payments toward a pool of consolidated debt that accumulated from building residence halls for Oregon public universities.
“The controller explored with the state treasurer the ability to pay off our portion of the debt, which is about $10.1 million,” Dyke said. “What that does is save us over $1 million a year.”
Prior to 1997, the cost of construction and renovation of residence halls went into an OUS fund that each university paid into based on its average residence hall occupancy rate. Payment is based on student population rather than the actual amount of debt a particular institution generated. University Housing was slated to continue making payments through 2027.
“We owe about 37 percent of the debt payment on that but we only use about 16 percent of the proceeds,” Dyke said. “It costs us over $1 million per year.”
The pool was intended to make it possible for smaller universities within OUS to build residence halls.
Paying off the debt will make it possible for the University to begin building new residence halls within two years. These halls will provide a steady stream of revenue, Dyke said.
“What we’ve promised is, except for the closing costs, the cost of mitigation and the cost of building out any additional childcare facility, every dollar will be returned to housing against their new residential living facilities,” she said. “So it’s a way to keep the money from sitting idle for a while.”
Dyke said the vacant Joe Romania property east of campus, currently owned by the University of Oregon Foundation, provides an example of how the funds might be used.
“It costs $5 million to purchase that property from the foundation. We’re already paying $500,000 in debt service on the facility; already then we’ve freed up $500,000 to help pay off their future debt,” she said. “It’s a case of re-bonding at lower interest rates and the freeing-up money that’s already being used. There are some definite financial advantages to doing it sooner, rather than later.”
Interim Vice President for Student Affairs and Director of University Housing Mike Eyster said University Housing is also pursuing an expansion of graduate housing but not necessarily family housing.
“We’re looking at expanding various graduate student housing options,” Eyster said. “We’re looking at several possibilities, but it would be along the line of East Campus Graduate Village. That is, studio or one-bedroom apartments.”
Dyke said the funds from the Westmoreland sale will be focused on developing undergraduate residence halls.
“What we’re really talking about right now is more Living Learning Center type of housing, and then there will be an expansion of Graduate Village, which is the graduate student housing out on the east end of campus, but it’s not with this pool of money,” Dyke said.
ASUO President Adam Walsh, who has strongly criticized the proposed sale of the Westmoreland complex, said the new plans to reduce Housing’s debt with the sale proceeds changes little.
“They’re still selling 400 units of graduate student and nontraditional student housing and not making up for the amount of housing that they’re losing,” he said.
Brett Rowlett, ASUO campus organizer, said new buildings are desirable but do not provide a solution to problems he associated with the Westmoreland sale.
“Investing in more graduate housing closer to campus, primarily studios, is great, but you can’t put families in there. Investing in more dorms is great, but you can’t put spouses and children in the dorms,” he said.
Walsh questioned how the University administration could push its agenda in light of what he said was little support.
“Who is supporting this in the community, other than the people in Johnson Hall?” Walsh said. “‘Father knows best’ certainly works, but who says Father can’t be wrong?”
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