Outlook 2010: Funding setbacks slow building projects on some campuses

Jan. 1, 2010
The poor economy has slowed construction plans for some schools and universities, but many education institutions that have available funding are able to take advantage of

The poor economy has slowed construction plans for some schools and universities, but many education institutions that have available funding are able to take advantage of more favorable market conditions and borrowing incentives in the federal stimulus package to build or renovate facilities at a relative bargain.

One of the larger building plans to be mothballed in 2009 was Harvard University's proposed expansion into the Allston neighborhood of Boston. The school announced in December that it was indefinitely suspending plans for a high-tech science complex in Allston. The four-building center was expected to cost at least $1 billion and was to be completed in 2011.

But that was before the economic downturn sent the value of Harvard's endowment plummeting; its value fell 27 percent from June 2008 to June 2009.

At Stanford University in Stanford, Calif., a declining enrollment fund also resulted in a rollback of construction projects. The university decided in 2009 to suspend or cancel $1.3 billion in planned projects. But even with those cuts, by the end of the year, Stanford reported that it had 87 construction projects worth a total of $1.5 billion in design or construction.

Of the $850 million in construction planned for the fiscal year that began in September 2009, all are either at or below budget. University officials say the favorable construction market has enabled them to keep costs under control.

At the K-12 level, 2009 saw fewer of the huge bond referendums that have appeared on ballots in recent years. But some districts were able to overcome the economic gloom and persuade voters to support ambitious projects.

In Detroit, despite misgivings about the mismanagement of a previous bond proposal, voters authorized the school system to sell $500 million in bonds to upgrade facilities. Declining enrollment and the struggles of the automotive industry have left the school system's finances in tatters, but interest breaks provided as part of the federal stimulus will enable the district to carry out the construction projects without a tax increase.

The program calls for Detroit to build eight schools, renovate 10 existing campuses, and demolish more than two dozen facilities that have outlived their usefulness.

Other districts that succeeded in passing large bond proposals include Fairfax County, Va., where voters okayed a $232.5 million plan to build a middle school and upgrade several other campuses, and Arlington, Texas, where the district won approval of a $197 million construction proposal that calls for a new elementary school and additions and upgrades at several campuses.

Several districts in Washington state were not as successful with their bond requests: voters in Tacoma rejected a $300 million proposal; the Puyallup district failed to win approval of a $314 million request; and Auburn district voters said no to a $285 million package.

Kennedy, staff writer, can be reached at [email protected].

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About the Author

Mike Kennedy | Senior Editor

Mike Kennedy, senior editor, has written for AS&U on a wide range of educational issues since 1999.

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