'U' to get $79M for renovations

The state legislature approved a bill last week that will ultimately allocate $79 million to the University for building renovations.

The bill, sponsored by state Sen. John Schwarz (R-Battle Creek), raises the total amount of bonds the state can sell from $2 billion to $2.7 billion. Most of the extra $700 million will be allocated to building renovations for state universities.

"If the bond cap isn't raised, the state wouldn't be able to cover the cost of the proposed projects," Schwarz said.

The $79 million will be applied to renovations of the LSA Building, Mason Hall, Haven Hall, the Frieze Building, the Perry Building and West Hall.

When the bond cap is raised, the University will receive 75 percent of the $79 million for renovations from the State Building Authority, while the University will foot the rest of the bill.

Gov. John Engler, a major proponent of raising the bond cap, plans to sign the bill within the next week, said Engler's spokesperson John Truscott.

"He has been pushing for this raise for awhile," Truscott said. "It allows us to fulfill our commitments to colleges and universities."

The current state of the economy - with low interest and inflation rates - makes this an ideal time for the state to sell bonds, Truscott said.

"When money is cheap, that's the time to bond," Truscott said.

University Provost Nancy Cantor said repairing current buildings with the newly allocated money is at the top of the University's agenda.

"The first priority is the renewal of academic buildings," Cantor said.

The University anticipated the allocation, Cantor said.

"We were expecting it," Cantor said. "It's been a lot of planning."

Schwarz, chair of the Senate subcommittee for higher education appropriations, said he met with University administrators to determine future financial needs and constraints.

"Last spring, I specifically asked every university president if they would be able to make the 25-percent match," Schwarz said.

The University is receiving the second-highest amount for renovations after Michigan State University, which will receive $80 million.

Without the bond increase, Cantor said "it would have been very difficult" to fund the renovations.

There is not yet a specific timeframe for the renovations, Cantor said, because there are many steps before the construction begins, including matching 25 percent of the allocation with University funds.

While some economists warn against selling bonds, fearing that an unstable economy could increase state debt, Schwarz said the state is cautious about raising the current bond cap.

Michigan is 32nd in the nation in terms of the amount of bonds sold.

"We have bonded quite prudently," Schwarz said. "Given this economy, if your bond rating is good, then this is a superb time to bond.

"Even with the substantial increase, we sell a relatively low amount of bonds," Schwarz said.

"The economy may become bad, and we have taken that into account."

10-17-97