ODE: So the mitigation plan is being increased the $300?
A: The move-out allowance had been $150 we actually had based that on some work we did trying to find out what the move-out costs were, and so we came back with the $150 and then it – ya know listening to the testimony yesterday it occurred to the president and to me that $300 was probably an amount that would recognize the true cost rather than apparent costs. So that’s fine, if that makes it easier for the students who moved that’s a totally appropriate use of the proceeds.
ODE: So the University is going to take this money and pay of the debt, it’s going to purchase a property – the Romania lot – and it’s going to be spending on these mitigation costs. How is this going to end up saving? It seems like we’re going to start incurring a lot more expenses, how is this really going to save us?
A: Well the first thing we’re paying off is the Consolidated Dorms Debt of $10.1 million. And you heard the number that saves us $1.1 million of interest – the interesting thing about that debt is that it’s from projects that started 10, 20 and 30 years ago. We actually had some projects that were paid for out of that pool but those have long been paid off. And so the debt we’re paying now is actually debt that’s related to projects on other campuses. So we’re using resources that we could use for our own resources if we could just get out of these interest payments, which we now can. So also it’s going to benefit the other universities a little bit because we get to pay off the highest interest debt. … So everyone’s debt carrying costs will go down, and we get out of our debt burden. So that immediately means we can invest in our own facilities in a way that we couldn’t before.
And of course the other piece is that because the foundation purchased the Romania property to create a land bank for us, but they can’t afford to hold it because that becomes a non-productive resource for them. We’re paying exactly their carrying costs for the purchase of that property.
ODE: Does that include property taxes and stuff like that?
A: Property taxes and we’re leasing the building from them, so we’re using it as a warehouse right now. But it’s basically what they’re paying for their debt on it.
ODE: How much is that?
A: $400,000 a year. So we’ve got $1.5 million now in cash flow that we didn’t have. We will reserve that cash flow to create new bonding capacity for dorms.
And you’ll say ‘Well why not just spend the $16 million’ or something. But we can actually get more bonding capacity than we can with the actual cash value. So let’s say we had $17 million left after the sale, we can actually support a $20 million project over a number of years by turning that into bonding capacity. So essentially re-borrowing the money. So you say, ‘Well, that doesn’t sound very smart,’ But it actually gets us a better facility in the end. It also acknowledges the fact that we couldn’t really move ahead with our strategic housing plan until we knew we had the resources to do it. … So it’s a way of leveraging resources.
ODE: What about the Campaign Oregon, why couldn’t funds go from the $600 million go to this project of the housing?
A: Well there’s a couple reasons. One is that dorms aren’t considered glamorous to donors, they understand the need for good programming and housing and how that can benefit the academic experiences of the students, but the don’t really want a dorm named after them. They’d rather have a science building named after them or a music building, or honor someone that way because that’s really more core to the campus mission and it’s much more visible.
And then the other piece is with regard to students. Then the primary goal was to raise the money for scholarships for students – that’s the $100 million that Dave (Frohnmayer) was talking about. And we think that’s so important because that allows the students to take that money and apply it where they need to. Is it for their education? Is it for their study abroad? What ever the situation is. So it doesn’t tie anybody’s hands the way a building does. It puts the money in the hands of the students.
ODE: So is every donation, like, ‘I’m donating to This, specifically. It’s not just like ‘I’m going to donate to your guys’ fund so that the University can use the money as they wish?’
A: Well let me use my self as an example: So when I give to the University sometimes I give to a specific thing, let’s just say the Bach Festival. But other times I just give it unrestricted because I know the University will make good use of those resources. So people might say, ‘Here’s just money for the University.’ They might also say, ‘Here’s money for scholarships but you decide what kind of scholarships.’ Or they might like some of our important donors – and by important I mean big, I guess – say, ‘I really want to benefit first generation college students.’ So it’s a restricted kind of scholarship rather than a general scholarship. So it really just does depend on the donor’s wishes and how they match up with priorities of the University. … We work very hard to match the wishes of the donor with the needs of the University. We really don’t want to be in a position where someone wants to give $10 million but it’s not for something that we could possibly benefit from. But I think that’s true for all sizes of donors. Some are going to want to tie it to something specific and others are quite happy to say ‘We really trust you that you’ll do a good job with this money.’
ODE: So you don’t think there’s enough donors to say ‘I trust you with this money’ and then you could use it for dorms?
A: Well the way we structured the current campaign is really important too. We created some unifying themes for that campaign, so faculty support is one, student support is another, capital projects is another, and again I would advise you to get the document –
ODE: Yeah I’ve seen that, the way it’s broken down into different categories.
A: We came up with those priorities with a very broad discussion on campus as to what those priorities were.
ODE: Oh, I see that makes sense.
A: And it’s a good question. And of course if someone came and said ‘We need to build a new residence hall,’ we would probably take them very seriously. And in fact if you go out on the housing page you’ll see that there is a place where you can indicate your interest in making donations.
ODE: So the Romania lot, is that going to be – people are throwing around ‘parking lot,’ you’re saying it’s not going to be used for the arena, but were you planning on building a dorm, or are you still unsure of what it’s going to be?
A: Well for our next residential facility we don’t know the exact site of that. So quite frankly, while it doesn’t seem real likely right now, it’s not off the table. What we do know is in the short term before we decide what to do with that piece of property – and the short term could actually be one to two years, or it could be 20 years depending on the needs of the campus. We will be using it for some kind of parking, and that’s important for students and staff right now because as you know there’s not enough parking on campus. As we build the new education building we’re losing parking there, so that’s a use we can make of that for a very minimal investment. But again now that we know that the board has given us the go ahead with the sale we can start thinking strategically about both the next 10 to 20 years and then some suggestions about the ultimate use of that property.
ODE: So is it going to be used as a parking lot immediately after it’s purchased until you’ve –
A: It’s actually parking now. Except that the building’s there and we use that as a warehouse. And so you know the big issue seems to be this must be tied to the arena because if we get an arena and people come they’ll park there. Well of course they will but that’s true now that if people come to Mac Court they park on the Bean Parking Lot to go
the basketball game. But that doesn’t mean that’s why the Bean Parking Lot is there.
ODE: So back to Westmoreland, people are saying that it needs renovation, which the University can’t afford, but the critics are saying, ‘Why can’t the $400,000 that Westmoreland brings in each year to the general housing fund be used for Westmoreland?’
A: There’s a couple of key issues here. One is the age of that facility and our ability to ensure its integrity going forward when we work in the public sector. As Dave mentioned in his testimony, a private investor can actually manage that kind of renovation in a way that – which involves working with the tax code in a way that we’re unable to – so there actually is a better economic outcome for him in renovations that still may not lead to a very high rent increase.
The other thing that we considered is the vacancy rate – and we can all debate the vacancy rate there – but quite frankly that facility was built for family housing, and very few of the tenants are family units and even fewer are family units with children. We believe we can accommodate them within Spencer View and East Campus Housing and Moon Court housing. And then everyone still has access to Westmoreland, which was one of the conditions of the sale. So now we have a situation where we can refer any overflow to the Westmoreland Complex but we’re just not running it. And that essentially was what was happening. Students who didn’t want or couldn’t get into these other facilities would go to Westmoreland.
ODE: What about international students? People are saying that Westmoreland was sort of a draw, and that they liked it because it was off campus.
A: Well there are a couple answers to that. One is that we have capacity at Spencer View, and actually Spencer View is quite a diverse community as well. It’s different, it feels different to people because it more modern. But again, the international students can still live at Westmoreland through working through the purchaser and through Bell Real Estate. With regard to how we’ll get them there. … I understand for Westmoreland a lot of it is word-of-mouth. You know, someone is coming from Korea or Thailand or wherever and they’ve heard that someone lived at Westmoreland, we want to make sure that they hear from those folks so we can direct them to all of their available options.
ODE: Do you think it will cost more though and they’ll be turned off? That 10 to 12 percent increase translates to about $50 more per month. Will that be enough of a deterrent?
A: It’s hard to know. International students need to show that they’re financially self-sufficient before they come. So, are they not able to be if it’s $50 more? But we actually have a lot of flexibility in how we meet the needs financially of international students, because we don’t have to follow the federal loan guidelines because they don’t qualify for it. So again we have to make sure that we have processes in place where we can help students if it becomes an issue for them.
ODE: What about all the people who work as grounds crew at Westmoreland? Are they going to lose their jobs?
A: The dynamic there is that of course those jobs won’t be available out there, and on the other hand the owner has expressed interest in hiring experienced people. So they may actually be getting jobs with the new owner. But the other piece of that is that as Spencer View becomes fuller there will be a few more jobs there probably, but also there’s turnover on those crews. What it means is that the students need to find work-study jobs somewhere else. But if housing isn’t tapping into that work study, maybe some other units on campus who haven’t been able to will be able to. And our total work-study funds aren’t affected by that.
ODE: Critics keep saying that by selling Westmoreland the University is turning its back on international and non-traditional students. How do you respond to that statement?
A: Well I think we have some evidence that we have made strides even before Westmoreland. There is a new position in student life right now that is an individual whose portfolio is non-traditional students and veterans. And so we’ve already made some movement toward thinking about our programming needs for these really important groups of students. What the hearing process has demonstrated to us, and it’s not just the formal hearing process but also the informal, is that we probably want to think about this some more. That’s one of the things we’re learning. On the other hand we have many excellent programs in place and part of the problem is just making sure we’ve made the connections so students know what assistance is available to them.
ODE: So when you hear that the U of O is turning its back on non-traditional students do you think, ‘Oh no you have it wrong?’
A: Well I think that non-traditional students have a unique – and probably individually unique – set of challenges and what it’s telling me is that there are some who we haven’t had good communication with for some reason we haven’t provided the service or they haven’t been able to take advantage of services that are there. I think that everything that we’ve heard is absolutely an important message to us and we need to figure out how to address those concerns.
ODE: So why do you think there has been such opposition to this?
A: Well you know, part of it is that it is a very sudden shift. With regard to something that’s been around for 40-plus years. And actually there are many faculty and staff who have lived at Westmoreland, so they have a personal tie. But that’s not it, I think for some reason there were questions raised about if the consultation happened sufficiently between the groups, and that’s a governance issue. The consultation that did happen happened in advisory groups to the president, and those groups operate with strict confidentiality, so when the president was first asked about this he had to go back and ask for permission to talk about a conversation that he had with them. So there was some delay in that. … Certainly there’s a dynamic tension between what one group and what another group thinks about how governance is being carried out, but that’s part of the dynamics of a University.