Gathering Place
J.N. Musto

Sunday, July 17, 2005

Funding new campus
takes fresh thinking

Next week the Board of Regents is set to make one of the most important, long-term decisions to come before it in the recent history of the University of Hawaii. The decision contrasts two very different approaches to the use of public lands and resources for the development of a new campus.

For reasons that are not entirely clear, the regents deferred a decision to accept the recommendation of the UH administration that Hunt ELP, Ltd., of El Paso, Texas, a private, for-profit developer active in military housing in Hawaii, be chosen. However, a company called UniDev had submitted a proposal that took a totally different approach. It was a plan that would build the campus and housing while creating continuing revenue for UH-West Oahu. Could it be too good to be true?

The question turns on whether the regents will settle for a short-term answer that will create a campus but sacrifice current and future economic opportunities in the process. Since the state cannot afford to fund the building of UH-West Oahu, the university is left with using its land to produce the revenues. The recommendation of the UH admin- istration was to accept the commercialization and sale of university-owned lands to provide funding for the capital project. In other words, sell the land to build UH-West Oahu.

But UniDev proposed that UH retain ownership of its land, and build single-family homes, townhouses and rental units under a concept called "workforce housing." From this base of new housing -- through home sales and rental revenues structured on a long-term ground lease -- much-needed funds would be generated to build UH-West Oahu and provide continuing income for the operation of the campus and the educational offerings to students.

"If you can't pay for the higher education you already have, how can you afford to build a new campus in West Oahu?" This question has been asked by faculty members, legislators and citizens for the last 30 years. Certainly, if you sell your land, you can get the money to build the buildings, but how are you going to hire staff? More money for UH-West Oahu means less money for UH-Manoa, UH-Hilo, or the community colleges, was the prevailing view of many.

Will building UH-West Oahu provide the catalyst for a sustainable financial future, or will it be another Kapolei Library, where the buildings are built but no funds are available for staffing, equipment or operation?

The UniDev model is not an experiment. It has allowed the California State University system to develop a new campus in Ventura County with no legislative appropriation from the state of California for capital funding. For Oahu, this would mean the creation of 2,400 housing units built around the new campus and forming the heart of a new city. It also would mean the accumulation of an endowment projected to be $350 million over the next 30 years.

After so many years of debate, discussion and controversy, there finally appears to be a sound and reasonable answer to the question of how the state can afford to build a new campus. The solution is a workforce-housing model as proposed by UniDev. With this approach the regents put nothing at risk. Should the project not produce housing or the projected revenues, then at some future date they can always sell the public lands to which they hold the title. However, if they sell the land today to a commercial developer, there is no going back and there is a risk that they will never achieve the real value of this property but be left with a campus they can't afford to run.

Before making a decision, the regents should carefully examine the details of all the proposals and open them to public examination.

J. N. Musto is the executive director of the
University of Hawaii Professional Assembly.

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