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THE ARCHITECTURE ISSUE
The Chronicle Review's yearly look at architecture examines buildings on and off campuses. Above, Caltech's new Cahill Center for Astronomy and Astrophysics, designed by Morphosis. (Chronicle photograph by Lawrence Biemiller)
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Buildings & Grounds is written by Scott Carlson (left) and Lawrence Biemiller (right). Scott Carlson writes about architecture, facilties, energy, and sustainability, among other topics. Lawrence Biemiller writes about architecture and facilities and contributes to Notes from Academe. What's happening on your campus? Let us know.
In the Recession, Will Building on Campuses Grind to a Halt?
With the American financial markets turning to mush and worry spreading about how the crisis will affect state and federal budgets, fundraising, and enrollment, colleges are reconsidering the most expensive undertakings on their campuses: construction and renovation projects.
As previously reported on Buildings & Grounds, Boston University has announced a freeze on building. In Colorado, where state institutions are often hurting for money, Gov. Bill Ritter called for a similar freeze on all state-supported construction projects — a freeze that may affect several planned projects in the University of Colorado system. And Russell K. Osgood, president of Grinnell College, one of the country’s wealthiest liberal-arts colleges, said recently in The Chronicle that plans for a $135-million library renovation may go on hold.
Colleges have been on a building spree for the past decade or so, but many say that they still need to build more. Many institutions also have tremendous challenges with deferred maintenance. The question now is, Will money be there to build and to repair?
“I think there will be a definite slowdown,” says Harvey H. Kaiser, a campus-construction consultant. Over the past decade, a lot of colleges have already dumped money into construction and maintenance — and not always wisely, he says.
“So many institutions looked at their need for deferred maintenance and new buildings, and the wisdom was: ‘Let’s look at our balance sheet — we have a lot of debt capacity, so let’s go out and borrow,’” he says. “The wiser CFOs will pay off the debts and suspend or terminate the building programs.”
Meanwhile, he says, mid-level institutions that have not caught up with deferred maintenance may be pressed to go into their endowments to cover repairs.
Glinting new buildings and stunning renovations can be major attractions for prospective students and faculty members, so colleges would give up building projects reluctantly. This may lead administrators to disagree about what the crisis means for campus renovation and growth.
Daniel J. Elsener, president of Marian College, says the economic crisis might lead to a drop in construction costs, meaning that the college could get good deals on some planned building projects. “I’m not sitting here saying that we’re in la-la land,” says Mr. Elsener, but “frankly, I see opportunity.” Meanwhile, William Curran, Marian’s vice president of finance, takes a bleaker view. He would like to see the college cancel or defer plans for campus construction or renovation.
Some colleges have already started raising money for planned building projects, so they will continue, albeit at a slower pace. In May, Augsburg College in Minnesota started seeking funds for a $40-million center for science, business, and religion.
“You find out that even people who are in really good [financial] positions are being very cautious,” says Paul C. Pribbenow, president of Augsburg. His response has been to take a much more patient approach with donors. Many colleges announce their campaigns once they have raised half the money they seek; Mr. Pribbenow says Augsburg will wait until it has 75 to 80 percent of the money “in hand, firmly” before emerging from the campaign’s quiet phase.
Read more about the effect of the financial crisis on colleges here.
Scott Carlson | Friday October 3, 2008 | Permalink | Contact usComments
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The title indicates that there is or will be a recession. Although the economy is in bad shape, it has not yet sunk to the level economists use as the definition for a recession.
— Harley Oct 3, 03:01 PM #