PSU grows by leaps and bonds

In the last decade, Portland State has been adding buildings – some new, some acquired -to match its growth in students as Oregon’s largest university.

Part of reaching out for new properties came with the transition of the university to more of a residential institution. Cathy Dyck, interim vice president of finance and administration, anticipated that the new Broadway Housing would open this fall at 60 percent occupancy.

"Instead, it is 100 percent occupied," Dyck said.

Another factor is the university’s realization that it will continue to grow and must seize every opportunity to expand and build, both on campus and in the central urban area. Dyck’s office, previously occupied by George Pernsteiner and most recently Jay Kenton, oversees this movement.

To make this possible, especially in an era of tight budgets, creative financing has become the university’s byword. This must cover more than the acquisition of land or the building of buildings. It must also finance the updating, renovation and improvement of existing buildings.

"We don’t have the broad base of financing that Oregon State University and University of Oregon have," said Robyn Pierce, associate director of facilities.

Portland State lacks the long history and huge base of affluent alumni that helps OSU and U of O grow in their inventory of buildings. Nor does it rest on the expanse of land both these older institutions own.

Portland State must rely on financial ingenuity and some super-generous donors to build its steadily growing supply of land and structures.

Untangling the details of this falls to the Office of Business Affairs, whose director is Dee Wendler. Real estate management comes under her portfolio.

Much of the funding comes from the state, in the form of direct funding and various bonding measures backed by the full faith and credit of the state.

Students pay a building fee, which can be tapped for such buildings as Smith Memorial Student Union. As plans for a new student recreation center develop, special additions are to be made to that fee.

But state-backed funding only begins to meet the university’s needs and desires. Various projects are able to tack together a variety of financial sources: some federal funding, some Portland Development Commission backing, some out of city funding. Sustainability designs draw on various funding sources or advantages. Homeland Security awarded PSU $2.3 million to fund seismic upgrades to the Ondine and Montgomery Court, supplemented by $780,000 from the state.

Wendler’s prime example of how complicated financing can become is the $33.2 million Urban Center, which opened in early 2000. The project was financed in phase one and phase two, but as it worked out, phase two was accomplished first and phase one second. Phase two drew on seven different sources. Phase one drew on 13 different sources. Some were federal, some state.

Like other institutions, PSU counts on donations from alumni and friends. Often this will put the donor’s name on a building. The physical education building wasn’t always the Peter Stott Center. Hoffman Hall originally was Harrison Hall. Some names are tributes to past leaders of the university, such as Epler Hall and Millar Library.

The new Northwest Center for Engineering, Science and Technology on S.W. Fourth Avenue waited more than a year for funding to proceed with construction. The center got it from Foriborz Maseeh, who earned his BS and MS from Portland State to move on to a successful career in business. Maseeh made the largest donation in university history, $8 million. Maseeh did not want the building named for him, rather, the university named the academic entity as the Foriborz Maseeh College of Engineering and Computer Science.

At the other end of the spectrum, moving and restoring the Simon Benson house rested on a variety of donations from a concerted fund drive. When the house faced its scheduled moving day without the total required funds in hand. Pernsteiner gave the project the go-ahead based on his faith that the fund-raisers would be successful.

One of the creative strategies is to involve the PSU Foundation. The Broadway housing is owned by a limited liability corporation created by the foundation, Broadway Housing LLC.

But as Wendler explained, the university depends heavily on funding through bonding created by the state in two different types of general obligation bonds, XI-F and XI-G.

"XI-F are paid for by a self-supporting entity like housing," Wendler said. The university must present a certificate of revenue which assures the money will be used for self-supporting activities. For XI-G, the state pays the debt service but there are strings.

"For every dollar of XI-G we have to match the money," Wendler said. However, matching money may come from anywhere including federal grants, local money or gifts.

An example of the use of XI-F was the purchase of the Fifth Avenue Building. Income from leases and rents will pay off the bonds.

On Nov. 5, the Portland Tribune printed a story which may have surprised many. The story told of recent developments in the proposed $165 million transit mall renovation. This would bring the MAX line through downtown and connect with Portland State. The story revealed that Portland State could contribute $7 million.

"It’s the right thing to do," Wendler said. The university has only about 4,000 parking spaces with more than 23,000 students. PSU has always cooperated with and encouraged mass transit opportunities, she said.

As for the $7 million?

"It’s affordable," Wendler said. "It would probably be paid out of parking revenues."

New buildings at the university are not without controversy. The building of the new rec center will require additional fees assessed to students, a potential that has already brought outcries.

SMSU continues as a source of contention, since the students own only three-quarters of it. The remaining quarter is Library East, owned by the university. The building actually was built in four stages. Library East was originally intended to hold library stacks and was actually used as a library annex when Millar Library was being rebuilt.

Tracy Earll, best known as chair of the student fee committee, has been especially vocal in arguing that the entire building be available to student activities. The administration, by contrast, has considered moving academic offices into the quarter building and the Office of Student Affairs has proposed moving some offices into the area. The issue is still unresolved.

Meantime, demands and plans for new buildings and expansion proceed apace. Robert Sylvester, dean of the school of fine and performing arts, last year expressed his vision of tearing down ancient Lincoln Hall and replacing it with a new facility. The project actually reached a fact-finding study phase by facilities and planning.

Last May, before he left Portland State for the University of Idaho, Jay Kenton proposed to the State Board of Higher Education 14 multi-million dollar projects for campus buildings and renovations. He was joined in the presentation by Christy Harper, ASPSU president. Among the projects were the student rec center, a new building to house a community college partnership, a new west heating plant, purchase of the tower of the Fourth Avenue Building, redevelopment of the PCAT building and the long-term development of University Place.