New Mexico Board OKs $143 Million For UNM, Minus Golf Course Plan

DALLAS — The New Mexico Board of Finance has approved a $143 million bond authorization for the University of New Mexico Board of Regents that does not include supporting $29 million of the debt with revenue from the controversial commercial development of a university-owned golf course in Albuquerque. The university had planned to pay debt service on those bonds earmarked for renovations to academic buildings with revenues from a proposed retirement community on a portion of the 80-acre, nine-hole North Golf Course. But the proposal has been revised to remove any development revenues from the financial plan, UNM president David Schmidly told the board at its Nov. 20 meeting. Although the authorization by the Board of Finance was to not exceed $143 million, the university plans to issue a total of $138 million of subordinate-lien revenue bonds at a negotiated sale in the first week of December. The issue will include $126.8 million of tax-exempt revenue bonds and $11.2 million in a taxable series. Proceeds from the taxable bonds will finance the construction of luxury boxes at UNM’s basketball arena, known as the Pit. With the sale, the university will have $681.7 million of outstanding debt. Moody’s Investors Service has rated the bonds at Aa3. Standard & Poor’s rates the university’s subordinate-lien debt at AA, but has not issued its report on the current issue. Underwriters on the issue are RBC Capital Markets, George K. Baum & Co., and JPMorgan. Financial adviser to the university is First Southwest Co. Bond counsel is Modrall, Sperling, Roehl, Harris & Sisk PA. David Harris, executive vice president for administration at UNM, said the university reduced its request from the original $160 million because a philanthropic foundation agreed to put together a plan to provide half of the required financing for one building. In addition, he said, UNM determined it had accumulated enough in reserve funds to finance some of the projects in the bond program. “Those two actions reduced the total debt by $20 million,” he said. The university has temporarily deferred development at the North Golf Course, Harris said, but it owns other properties viable for development that will provide debt service for the bonds. “We estimate the lease value of those lands at $6.6 million a year, but we’ll only need $2.4 million a year for debt service,” Harris said. “That means we don’t have to develop all that land, at least not within a short timeframe.” At a town hall meeting in early November, hundreds of people who live near the golf course protested the university’s plan to build a retirement community on it. Neighborhood residents who spoke at the meeting in opposition to the planned development included Albuquerque City Councilman Isaac Benton and Lieut. Gov. Diane Denish, who chaired last week’s Board of Finance meeting. Schmidly told board members the projects to be financed with the bond proceeds do not depend on the development of the North Golf Course for debt service. “I’ll make this perfectly clear because it’s become such a high-profile issue,” he said. Schmidly said he has been meeting with Sara Koplik, president of the North Campus Neighborhood Association, on the issue. They have agreed to form a community advisory panel to advise the university on the future of the North Golf Course, he said. The golf course is owned by the university and flanked on three sides by the 384-bed UNM Hospital, UNM School of Law, and the Domenici Center, which houses the university’s school of health sciences. Among the larger projects to be financed with bond proceeds are $25 million of renovations to the basketball arena, $20 million of work to the football stadium, the $24.8 million construction of three parking garages, and $12.4 million of upgrades to academic buildings.