Campus development funding debated because of leasing, fees

With new buildings popping up around the UNM community, one might wonder where the money for all this construction came from.

Organizations like the Sandia Foundation and the Lobo Development Corporation help fund projects that provide student housing and additional campuses.

Robert Goodman, executive director of the Sandia Foundation, said UNM receives financial support for these construction projects from the Sandia Foundation by buying and leasing properties to the University, a system that has drawn criticism from some in the UNM community.

The Sandia Foundation helped UNM fund buildings in the Science and Technology Park, the Business Center and the UNM Press building, Goodman said.

The latest partnership UNM made with the Sandia Foundation was for the main campus building in Rio Rancho for $12 million.

"We are building the building and we will own the building and we'll lease it back to the University," Goodman said. "At some point in time in the future, they will come and buy the building back, but they're certainly not obligated to."

In the fall of 2008, then-Council Chair Lissa Knudsen tried to get approval from the UNM Board of Regents to construct a new childcare facility for students.

Knudsen said the Regents suggested having the Sandia Foundation fund the project, but she said UNM should find alternative options.

"My big concern about funding mechanisms like the Sandia Foundation is that basically it is credit," she said.

Steve Beffort, vice president of Institutional and Support Services, sits on the board of the Lobo Development Corporation. Beffort said the Sandia Foundation is used for larger-scale projects, whereas the Lobo Development Corporation is used for smaller projects such as student housing.

"The Lobo Development (Corporation) is wholly owned by the regents and it doesn't do anything without regent approval," Beffort said. "It has a board of directors. It has two regents that sit on the board, as well as the president of the University."

Beffort said the Lobo Development Corporation has worked with other organizations in the past to fund projects, but has never provided all the funding for a single project.

Lobo Development worked with American Campus Communities to build student housing, Beffort said. Now the Lobo Development Corporation is looking to build more student housing on South and Main Campus.

Beffort said students will fund the construction of the residence halls through their housing fees.

"The Lobo Development project with student housing - that's going to be self-funded because (of) our contract with the developer, American Campus Communities," he said. "They will build and operate and they will get their money back by virtue of leasing rooms to students."

Knudsen said UNM should be able to offer childcare facilities to its students without making students pay for it, for example through raising student fees.

"Because fees are definitely not covered by the lottery scholarship, that basically increases the cost of education for projects that I feel could be funded in other ways," she said. "For example, if we could get capital outlay from the state legislators, that would be taxpayer dollars that would go through the state legislature and it can be allocated to special projects."

Beffort said the reason UNM wanted to use the Sandia Foundation for the childcare expansion was because there was no other funding option.

"(The regents) were considering the possibility of childcare as being done as a Sandia project," he said. "But there's not enough money there unless the students would elect to have a student fee associated with childcare program to proceed to pay the debt service on that project."

Goodman said the regents have no new projects they want the Sandia Foundation to fund.