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Regents approve main campus housing

The Board of Regents approved main campus housing plans Tuesday, ushering in a two-year period of dorm demolition and renovation.
UNM’s partner, American Campus Communities, is scheduled to begin construction on the dorms May 16, but the University and ACC have not worked out how much ACC will pay for the land.

Regent Gene Gallegos, the only regent to vote against the housing plans, said construction finances concern him.

“ACC is a for-profit business, and they want to negotiate as favorably as they can, and I think that negotiation has to be mutual,” he said. “And it has to be a favorable financial deal for the University.”

ACC could pay up to $545,000 in rent, but depending on development and construction costs, rent could also be as low as $305,000, which is the property’s “fair market value,” according to the building plans.

ACC officials said they want to begin construction as soon as possible in order to complete the dorms by August 2012. The company plans to begin construction before definite rates are agreed upon.

Regent Don Chalmers assured Gallegos the situation was not a large risk.

“Because of our desire that is spurring on the project for 2012, (ACC) does not have a guaranteed maximum price,” Chalmers said. “They have estimates, and they believe their estimates are right. … But in the worst case scenario, we get fair market value.”

But there is a discrepancy among the regents about whether $305,000 is the fair market value, which is what ACC will pay if construction and development costs are high enough.

The Lobo Development Board and six of seven Regents’ Finance and Facilities Committee members approved the building plans and tentative rates before they went before the regents Tuesday.
Gallegos said his concerns with ACC stem from previous dealings with the company.

He said the regents found problems with the Lobo Village lease when they reviewed it last year.

“It was the most unfair, one-sided lease that you could imagine,” he said. “We sat down with ACC and we renegotiated that lease and probably changed 20 terms to make it a fair lease.”

Gallegos said the regents and ACC have more negotiating to do. He said a tentative rate plan is also not a provision of the original Master Agreement between ACC, Lobo Development and UNM.

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The new phase of building involves the demolition of Santa Ana dorm, the parking lot behind it, two SRC apartments, two tennis courts and part of lower Johnson Field to make way for four multi-story dorms. The project will use more than four acres of UNM land, is set to cost ACC about $92 per square foot of building, and will cost residents about $570 per month, according to the plans.

Faculty Senate President Richard Wood questioned how much the project would cost the University. Lobo development officials said the project won’t cost UNM, but Wood didn’t agree.

“What we are spending is a prime piece of real estate, and we’re doing it for students,” he said. “But I do think every time we enter into these agreements with a private sector, with all respect for the profit motives of the private sector, our interests are always at risk. And you all are on the line trying to defend our interests.”

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