DALLAS — The University of Arkansas will begin a multi-year effort to renovate facilities at its main campus in Fayetteville with most of the proceeds from this week's negotiated sale of $51.9 million of facility revenue bonds by the University of Arkansas Board of Trustees.
Several of the projects being financed with bond proceeds are part of a long-term, $218 million effort to catch up with years of deferred maintenance at the Fayetteville campus, along with renovation of existing facilities to new uses.
In addition to the improvements to existing academic space and infrastructure, the school will build a nanoscale science and engineering research facility and install new, more efficient systems to several student residence halls.
Total cost of the current projects, which are also being financed through charitable contributions, is estimated at $77 million.
Underwriters on the UA sale are Crews & Associates Inc. and Stephens Inc. Bond counsel is Friday, Eldredge & Clark LLP. Public Financial Management is the university's financial adviser.
The university's debt is rated Aa3 by Moody's Investors Service.
The facility revenue bonds are general obligations of the university. The debt is secured by pledged revenues from the Fayetteville campus, which include student charges and auxiliary fees. Those revenues totaled $198 million in fiscal 2009, providing almost six times coverage of combined maximum annual debt service for the bonds.
The renewal effort began in late 2008, when new chancellor David Gearhart told trustees that many buildings were in such bad shape that the structures would have to be torn down unless they were repaired soon.
"I say that not to cast stones at any individual or previous administration by any means, because tough fiscal decisions have had to be made during that time, just like the decisions we face in trying economic times today," Gearhart told the board's building and grounds committee. "But we feel that we simply cannot afford to put off these necessary infrastructure investments any longer."
The university will use $15.5 million in proceeds to finance part of a planned $37 nanoscale science and engineering building. The three-story facility will be built in stages, with completion of the third floor and a second-floor clean room to be built later.
About $4.2 million of the proceeds will finance the first phase of an overall project to renovate all 160 large classrooms and 25 large teaching laboratories on the campus. The initial phase will involve work on 20 classrooms and seven laboratories. The entire classroom renovation effort is expected to cost $25.2 million.
The university will spend $8.8 million of the bond proceeds to renovate Peabody Hall, which was built in 1913, to provide space for the College of Education and Health Sciences.
Another $5.2 million will be used to renovate the old student health center, which was replaced by a new facility in 2004, for use by the nursing school. The university said the addition would allow an expansion of the nursing program. Work is to be completed by December 2011.
Bud Walton Hall, which has not been used as a dormitory since 2004, will be renovated for use as a center for Arkansas history and by the astronomy department. It will also house offices and other operations that are temporarily displaced during renovation on other campus buildings.
The university set a fall enrollment record this year with 19,849 students, an increase of 655 students over fall 2008.