IowaWatch interview: Governor Prefers More Economic Impact From State University Buildings

Public university building projects would have a stronger chance of getting state funding if officials can show that the building has a positive economic impact for Iowa, Gov. Terry Branstad said in an IowaWatch interview.

“This has been my contention from the day I took office. The universities can play a very key role in growing the Iowa economy,” Branstad said.

The governor said Iowa State University, in particular, could play a role in the economy with its agricultural, engineering and biosciences programs because they are “where the key growth is today.”

Officials at Iowa's public universities previously have argued the need a new building meets, not its economic benefit.

Branstad made his comments after vetoing $7 million in project planning appropriations for three projects, one each at ISU, the University of Iowa and University of Northern Iowa. He delivered the vetoes on June 20. IowaWatch interviewed him on July 2 and collected the reaction of university officials last week and this week.

People involved in planning those buildings said they were caught off guard when Branstad vetoed the projects.

“I don’t think we had any indication that the governor was going to veto these planning appropriations,” said Warren Madden, ISU’s senior vice president for business and finance.

Branstad vetoed $2.5 million to plan a biosciences building at ISU, $3 million to plan a new pharmacy building for the UI, and $1.5 million to begin the bidding process for renovations to UNI’s Schindler Education Center.

He said he wants to know if approving planning funds for the buildings will impact the state’s budget over the next five years. “Once you approve planning money, which is only a small amount, you basically are obligated to then follow through and build the buildings,” he said.

Branstad said he also wants to make sure enough money exists in the future to pay for education reform and property tax relief before starting new projects at the universities.

“They (the state regents) have capital improvement plans that go on and on and on and amount to literally hundreds and hundreds of millions of dollars. My concern is the appetite for more buildings never ends, and I guess I feel as governor I have an obligation to protect the interests of the taxpayers,” Branstad said.

Branstad spoke at length during his IowaWatch interview about the value of the biosciences and how much they have grown recently in Iowa, with new businesses being created in the state. Reminded that he vetoed planning funds for biosciences building at ISU, he said:

“I guess I might be interested in visiting with them more to find out what the needs are, but I don’t think we are going to lose any time especially if you do a design-build.”

A design-build approach combines the elements of design, bidding and construction to speed up the process. The regents approved the use of two design-build projects for the UI in September 2012.

Branstad said ISU, the UI and UNI already are receiving a large amount of money from the state – $479.3 million for general education the new budget year that began July 1 – that would keep tuition from rising for the first time in 30 years.

The buildings remain a priority for all three universities. Each has plans to include them once again by the end of July in next year’s budget recommendations to the Board of Regents. The regents oversee Iowa's public universities.

Warren Madden, ISU vice president for business and finance

Warren Madden, ISU vice president for business and finance

Madden said ISU officials would have had no issue proving the economic worth of the new biosciences building.

“Some of the products that come out of the biosciences deal with the development of new plant materials, new products that benefit Iowa and become part of the economic base for the state,” Madden said.

“The workforce of Iowa is based upon the universities continuing to have graduates that can go out and fill the work requirements of the state. I don’t think that’s going to be too much of a problem to show the economic value of these facilities.”

ISU’s new biosciences building would provide students with up-to-date laboratories and equipment. Just under half of ISU’s buildings were built more than 50 years ago, Madden said, and modern labs are needed to prepare students to enter the workforce.

Madden said the biosciences building would have a combination of research laboratories and teaching facilities. The university’s growing biosciences program is in five colleges, with more than 450 faculty members.

The Dale E. Wurster Center for Pharmaceutical Technology is the most recent addition to the University of Iowa College of Pharmacy and that was made in 1996. The UI wants to construct a new building to replace the one the pharmacy college moved into in 1963.

Lyle Muller/Iowa Watch

The Dale E. Wurster Center for Pharmaceutical Technology is the most recent addition to the University of Iowa College of Pharmacy and that was made in 1996. The UI wants to construct a new building to replace the one the pharmacy college moved into in 1963.

ISU puts the cost of the biosciences building at $62.5 million, with $20 million provided by private funding and $42.5 million requested from the state.

Rod Lehnertz, director of planning, designing and construction for the UI, said the Pharmacy Building in Iowa City is “programmatically and operationally one of the poorest on campus.”

He said the new building was a top priority for both the UI and the regents. The existing building dates to 1963, although an addition was built in 1996. Project planning already was underway before the funding was vetoed.

Lehnertz said the Pharmacy Building will cost around $90 million, with $67 million coming from the state and $25 million from private gifts and the UI.

Dwight Watson, dean of the College of Education at UNI, said the renovated Schindler Education Center, will be used to train future teachers, and allow them to interact with technology that more closely resembles what they will find when teaching in a modern classroom.

Renovations for the Schindler Education Center, which opened in sections starting in fall 1972 through its eventual dedication in 1976, will cost $32 million, with all funding coming from the state.

UNI already has conducted a $26,000 feasibility study for the building.

Dwight Watson, UNI dean, College of Education

Dwight Watson, UNI dean, College of Education

Watson said UNI officials would need to figure out how the building’s economic benefit is measured, although there would be a long-term economic benefit by better preparing teachers, improving the education of the next generation of students.

Appropriations for the Schindler Education Center planning originally were to be $3 million, but were lowered by legislators to $1.5 million. “I personally thought that because it (the appropriation) got reduced to $1.5 million it would be easier to approve,” Watson said. “I was sort of surprised.”

Branstad’s veto message for the planning projects said the universities need to secure sustainable financing and consider changes in educational technology when deciding building needs.

“It was a last-minute deal and I just felt it made more sense to give it more thought and look at other options,” Branstad said about the projects.

All three buildings first appeared in the regents’ five-year capital plans in September 2011 and were part of the regent’s budget recommendation submitted to Branstad last fall.

The regents’ five-year capital plans in 2012 included the total costs of the projects, as well as how much of those costs would come from private funding.

Regents President Bruce Rastetter did not respond to requests for comment. Sheila Doyle Koppin, the regents' communications director, said in an email he would not be available.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, said talk of the projects reached the Legislature a year ago.

Gronstal said the UI’s Pharmacy Building clearly is outdated and that the Legislature should look at all three of the vetoed facilities’ broad benefits, including their economic, social and educational benefits.

The governor said he didn't think the vetoed funding would set the building projects behind, and encouraged the universities and regents to begin using the design-build concept for the buildings to save on time and money.

While vetoing the other projects, Branstad approved $12 million for expansions at the ISU Research Park.

“We had a lot of indications that the research park project was a priority,” Madden said. “It certainly is more closely aligned with economic development, job creation and technology transfer, which are certainly priorities with both the Legislature and the governor.”

 

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BRANSTAD: INCREASED GAS TAX UNLIKELY, NEED NEW WAY TO RAISE ROAD CONSTRUCTION FUNDS
This IowaWatch story was published by the Iowa City Press-Citizen, The Courier (Waterloo-Cedar Falls), Ames Tribune, Sioux City Journal, IowaStateDaily.com and several Patch.com sites in Iowa.