University administrators are working on a plan to compensate University Housing for student housing money used to purchase the land that the Riverfront Research Park
currently occupies.
University Housing was set to receive
approximately $250,000 in 2003 to compensate for land purchased with housing funds, according to planning office papers and inter-office correspondence, but that figure was reduced to $34,746 after the University’s legal counsel issued a ruling concerning rededication and compensation requirements within a university system.
The University bought the land with bonds in the mid-1960s, and University Housing was charged with repaying the bonds because the land was meant for future housing development. University Housing is an auxiliary that is financially independent of the University and is funded solely from student housing fees.
University Housing Director Mike Eyster said housing officials had been under the assumption since 1985 that student housing money would be fully compensated for the land.
“There were three instances that caused me to believe there would
be compensation,” Eyster said,
referring to a 1985 briefing paper from the University planning office, a 1990 financial plan prepared
for the University and a 1996
memorandum from Riverfront
Research Park Director Diane Wiley, all of which he said made mention of the more than $200,000 that
was to be paid to University
Housing in 2003.
The 1985 briefing paper called for $223,840 to be paid to University Housing. The figure increased as the years went by and interest on the land was factored in. The 1996 memo set the repayment amount at $255,090.
University Vice President for Administration Dan Williams said there was never a formal agreement regarding a payment plan between the research park and the housing department and that the documents were merely suggested ideas.
“The problem with that kind of stuff is once it gets in writing someplace, it somehow becomes truth,” Williams said.
Williams, who served as University Housing Director from 1980-83, said the thought that full compensation for the land value plus interest was necessary if the intended use of the land changes was fueled
by a number of misconceptions
regarding land ownership by
different auxiliary enterprises within the University.
“We got a little more careful about what the rules were that governed us, and we found that we did not have that obligation at all,” Williams said.
The legal counsel ruling
In 2003, Melinda Grier, general counsel to the University, examined the rules within the Oregon University System regarding rededication of payments.
Wiley said the University was
beginning to take control of properties in the east campus neighborhood previously managed by University Housing and said there were
questions that needed to be
answered regarding compensation and repayment.
Wiley said the ruling stated that repayment for land transfers within the University is only required if the transfers occurred while state bonds were still being repaid.
Once all bonds have been repaid, “if rededication or re-change of use happened after that point in time, there was no compensation due,” Wiley said.
Wiley said she was asked after the ruling was made to recalculate the payment plan for the Riverfront Research Park and came up with the $34,746 figure. That figure was calculated using 1989 as the year that use of the land changed and compensation requirements began, which left five to seven years of outstanding bonds awaiting repayment, Wiley said.
Although auxiliaries such as University Housing operate independently, Williams said they are not completely separate from the
University and must sometimes make sacrifices for the greater good of the institution.
“Essentially, no unit or sub-unit of the University can become an owner,” Williams said. “The fact that revenues came from the housing department didn’t give the housing department ownership.”
Disagreeing over changes
Housing Director Eyster said he recognizes the validity of a legal counsel opinion, but he questioned the fairness of retroactively applying a newly discovered rule to an agreement that had been in existence for more than a decade.
“It seems to me that there’s something that’s not fair about it, particularly when you consider that it was a relatively small part of the student body that financed this and the benefit is now intended for the entire campus,” Eyster said.
Vice President for Administration Williams said fairness is an important thing to consider when making repayment plans, but it is not reasonable to expect the University to repay auxiliaries the total cost of the
land plus interest when the Oregon University System rules do not
require that.
“We probably would have spared everybody a lot of grief about all this if we had realized that earlier on,” Williams said.
Truman Baird, a former facilities director for the University, said it was a common practice during his time at the University for auxiliaries to trade parcels of land with
each other to compensate for
different acquisitions.
He said though the University may not legally be required to repay housing for the Riverfront Research Park, he “would think that they would want to do something for housing because housing never did get any use for that land.”
Marge Ramey, who served as University Housing Director from 1983-1991, said the rededication of payments for the Riverfront Research Park was often discussed during her time as director.
“I felt very strongly about it at the time, and still do, that it was housing money — student money — and it needs to be repaid,” Ramey said. “It wasn’t public money that was used; it was the students’ money.”
Williams said the repayment plan originally drafted by the planning office was based on a “pretty serious misunderstanding” of what the requirements are for rededication and repayment.
He said it is very important to keep in mind that student housing money is not the same as student incidental fee money.
“It would be one matter if the student incidental fee was used in acquisitions and transfer of ownership, but in the housing department students pay room and board, and they get services in return, and if there’s excess revenue after that, then the department can use it (for other purposes),” Williams said.
But Eyster said the financial problems plaguing the housing department mean any amount of money it could receive would be a valuable addition to the budget.
“Timely compensation for that property would go a long way toward modernizing our seriously out-of-date residence halls, which are currently rated No. 1 in the nation as ‘dorms like dungeons,’” Eyster wrote in an e-mail statement. The University’s residence halls ranked No. 1 in the Princeton
Review’s “dorms like dungeons”
category last year.
Working to agree
Riverfront Research Park Director Wiley said her role in the process has been limited to making calculations and that University Housing’s disagreement with the new compensation amount is “going to have to be dealt with administratively.”
Two other auxiliary enterprises were mentioned as needing compensation in the 1985 briefing paper, but no record of what happened to the plan could be obtained.
According to the paper, student building fees were to be repaid $345,000 and the parking auxiliary was to receive $242,341 for land near the Riverfront Research Park referred to in the document as the Eugene Sand and Gravel tract and now used as playing fields “to
accommodate its use for general
institution purposes.”
Department of Public Safety
Interim Director Tom Hicks,
who oversees the parking auxiliary, said he does not know anything about the compensation plan.
He recalled an incident in the
early ’90s in which parking
fees were used to purchase an
off-campus building, but he said
the money was repaid just a few years later.
Vice President for Student Affairs Anne Leavitt, who oversees student building fees, was also unaware of the compensation plan.
Williams said he does not know the specifics of the plan. He said it may be possible that the compensation had taken place but said if it hadn’t, it was no longer relevant because the plan was based on a faulty assumption that legal counsel has cleared up.
“You can’t lose sight of the fact that sometimes individual departments have to subordinate their self-interests for the greater good of the institution,” Williams said.
But Eyster stressed the importance of compensating the student housing money and sticking to the original agreement.
“A year or so ago I was offered … I think $30,000 to settle the matter, and I just said that my understanding is that we agreed on a formula and that the formula’s been
recalculated three times and
that the last time that it was
calculated it was, I believe,
over $250,000. From my perspective that’s what’s due,” Eyster said.
Leavitt said she was familiar with University Housing’s concerns regarding the rededication of
payments and has been involved in the discussions between Eyster and Williams since taking on the
position of vice president for
student affairs.
Leavitt said she and other University officials have “talked about how useful it would be to have this
sorted out.”
“It’s been an outstanding issue really longer than I’ve been working directly with housing,” Leavitt said.
Williams said finalizing a repayment plan between University Housing and the Riverfront Research Park is one of the things he hopes to accomplish before he retires at the end of term.
“I’m sure there will be some compensation for the housing department, but it will certainly not begin to approach what (was originally planned),” Williams said.

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