Bond approved for new facilities

The VCU Board of Visitors recently approved an $85 million bond to finance a new School of Business building and the School of Engineering expansion. Why does this matter to you? Because the building you’re in now was likely financed the same way.

Financing for both projects will be paid for almost entirely by revenue bonds. Only $15.3 million of taxpayer money will go toward the business building.

“The sale of bonds is the technique the government uses to finance the construction of business,” said Paul Timmreck, senior vice president for finance and administration. “The way it works is that we’ll be selling bonds valued at about $75 million. The investors buy the bonds (and) they give the university $75 million to construct the buildings. Then we pay the investors back over a period of time – say 25 years. It’s sort of like a mortgage on a house.”

Timmreck said most buildings on campus are financed this same way because it is a long-term investment. Student-services buildings, such as the University Student Commons and the Siegel Center, also were paid for by revenue bonds, but in the end by the students’ University Fees. The difference is for what the buildings are used.

“Mostly the way it works with the government, the academic buildings are the responsibility of the state,” Timmreck said.

Investors for these projects are the School of Business Foundation and the School of Engineering Foundation, which includes Virginia native Bill Goodwin, who sold AMF Bowling for more than $1 billion.

“The foundations are comprised of citizens,” Timmreck said, “some representing major corporations and other interests that have really taken a deep interest in philanthropy and supported VCU.

“And this place couldn’t be the same without them, believe me, because they raised money that goes directly to the university.”

Now that the Board of Visitors has approved the plan, Paul Jez, vice president for business services and treasurer, said the university now just has to “elect to issue the bond,” which it expects to do this month.

VCU President Eugene Trani said the expansion, scheduled to be completed in August 2007, will not only help future students but also Virginia as well. By his estimation, it will add about 2,000 more student slots in business and engineering.

Trani is optimistic and excited about about this and other future university expansion and projects.

“I believe this institution is really on a roll,” he said.