DALLAS — The University of Arizona will expand an overcrowded student recreation center at the main campus in Tucson and improve the facilities of the 70-year-old Laboratory of Tree-Ring Research with proceeds from next week’s negotiated sale of $42 million of revenue bonds by the Arizona Board of Regents.
The bonds are set for pricing on Tuesday.
The bonds are supported through the university’s gross revenues, which include tuition, fees, indirect cost recovery, and auxiliary enterprises. Those revenues totaled $585 million in fiscal 2007, or more than 15 times the university’s maximum annual debt service of $38 million.
With the sale, the university will have $870 million of outstanding direct debt, including $389 million of revenue debt and $531 million of certificates of participation and other debt.
The university expects to issue approximately $200 million of revenue bonds in 2008 for new student housing and renovation of existing housing.
The bonds are rated Aa3 by Moody’s Investors Service and AA by Standard & Poor’s.
The underwriting team consists of JPMorgan and Peacock, Hislop, Staley & Given Inc.
Bond counsel is Squire, Sanders & Dempsey LLP. RBC Capital Markets is the financial adviser.
The bonds have been qualified for insurance, but John Snider, a managing director at RBC, said a decision on obtaining bond insurance will be based on market conditions at pricing.
“The decision whether to use insurance will be made at the time of the sale,” Snider said. “It will be based on whether the insurance adds value given the university’s strong underlying ratings.”
Most of the proceeds, some $27.6 million, will finance a major expansion of the 16-year-old student recreation center. The 58,000 square feet of new space will include a fitness room, gymnasium, outdoor adventures area, sand volleyball courts, and rock-climbing facilities.
Colleen Morgan, a facilities project manager with the University of Arizona Department of Facilities Design and Construction, said the new facilities include a 37,000 square foot weight and fitness room.
“The existing weight room was overcrowded the day the center opened in 1991,” she said. “The new one will be three times the size of the existing one.”Major work on the expansion will begin this month and is to be completed within 18 months.
Proceeds from the sale will also provide $10 million to complete a $20 million rehabilitation and renewal effort to provide additional classrooms, laboratories, and office space, upgrade air conditioning systems, and replace obsolete equipment.
The regents issued $10 million of revenue bonds in 2005 to begin the effort of reducing the inventory of deferred maintenance projects.
The university is allocating $2.4 million of bond proceeds to a $3.2 million two-phase project that will add more than 16,000 square feet of laboratories and administrative space to the Laboratory of Tree-Ring Research. Federal grants will provide funds to complete the project.
The lab is located on the west side of the on-campus football stadium, said Thomas Swetnam, a professor and the director of the lab.
“The lab was established in the stadium space in 1937 as its temporary quarters,” he said. “We’re still here.”
The two million samples of ancient and modern wood at the lab are used by researchers to determine when ancient structures were built and get an insight into ancient climates by analyzing tree-ring growth patterns, Swetnam said.
“These new facilities will provide us with more of a public presence on campus, and allow the expansion of this method to other disciplines,” he said.
The analytic technique, known as dendrochronology, was invented and developed by laboratory founder A. E. Douglass.
Swetnam said the laboratory’s collection of core samples and tree cross-sections, some of which are more than 4,000 years old, has been used to date objects ranging from a Stradivarius violin to a sunken Viking boat.
“We’ve done a lot of things over the decades, but there are still new ways of studying new elements,” he said.