by Jeremy Hunt
Daily Lobo
UNM wants $160 million for construction projects and plans to get that money from investors around the country.
The Board of Regents' Finance and Facilities Committee approved parameters for the 2007-08 Institutional Bond Sale at its meeting Tuesday.
The University will sell $160 million in bonds to investors in December, and all of them will be paid off by 2038, said Andrew Cullen, associate vice president for institutional planning.
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"It's just like a savings bond, but instead of the U.S. government paying you, the University of New Mexico is paying you," he said. "There's very little risk for investors."
The parameters will be considered by the full board at its Oct. 9 meeting.
Cullen said some bonds would be paid off sooner than others.
"They issue bonds in blocks," he said. "The last of the bonds will expire and be paid off in
30 years."
Cullen said the interest rate on the bonds depends on their market value when they are sold, but it should be about 5 percent.
The bonds are the only way UNM can move forward with some construction projects, said Regent Mel Eaves, chairman of the committee.
"It's essential for the University to do this because UNM needs to be more self-sufficient in its capital improvement projects," he said. "There are many projects where the opportunity to secure state funding is not likely."
The Board of Regents approved a $125 million bond issue in 2005 that was funded by increasing student fees $56 per year for
four years.
That money was used to fund construction projects on the Main and branch campuses, including Centennial Engineering Center and renovation of the Communication and Journalism Building.
"The last one was focused on academic facilities," Cullen said. "This one is more focused on support services."
The University will use the bond money to fund capital projects and renovations of several buildings and facilities on campus, including undergraduate classrooms and The Pit,
Cullen said.
Most of the bonds can be paid off from new or increased revenues resulting from renovation, according to a report from the institutional planning office.
Some will be paid off by revenue generated from the University's Commercial Real Estate Development initiative, the
report states.
UNM will get almost $25 million to build three, 500-space parking structures on campus, Eaves said.
"Parking is a real problem on campus," he said. "This has money in it for parking structures."
The Pit is slated to get $25 million from the bonds as part of an estimated $60 million renovation.
University Stadium will get $20 million to add luxury suites.
Cullen said the improvements to the athletics facilities, especially the luxury suites at the football stadium, will pay for themselves.
More than $28 million will be used for academic facilities.
UNM will spend $12 million of that to update undergraduate classrooms, particularly in Mitchell Hall, Cullen said.
The updates include heating and cooling systems and installing computers and projection equipment in classrooms, he said.
Eaves said the projects will make the University better for everyone.
"It's a package of capital improvement projects that are really going to improve life on the campus and help the campus engage the community," he said. "If we had to wait for money from the Legislature, it probably wouldn't be done at this time."
