And the work isn’t over.
Just this month, trustees approved the campus’ single most expensive project in the university’s 205-year history with a $98.3 million renovation of the North Quad dormitories.
But officials said they won’t drive the university into further debt to complete future projects on tap for the campus.
“The conversation we’ve had with the board (of trustees) is, we believe we’re in a hiatus period in regards to further borrowing,” said David Creamer, the university’s finance director.
Campus face lift
University trustees approved a 2009 “Miami Makeover” plan to rebuild dining halls and residences across the campus. That’s led to the biggest construction boom in Oxford since the 1950s and 1960s, when the university added more academic and dorm buildings to accommodate a swelling number of baby boomer students, Creamer said.
A half-century later, many of those buildings need a face lift, triggering the recent flurry of activity, he added.
“We’re in largely what is a preservation mode as well as modernization,” he said of the buildings.
The Shriver Center, constructed in 1958, for example, was replaced this year with a $53.1 million student center, that opened in February and features leather chairs, $1,000 lamps, a theater, as well as a diner-themed eatery for students. The second phase of that project is slated to cost $21.5 million and open in 2017.
A $2.6 million Goggin Ice Arena upgrade and $83.75 million spent building new dorms and a dining hall, as well as the geothermal plant situated on the Western Campus area of the college, were among other construction projects finished this year.
Most of those projects are paid for with donations or using student fees. A $110 fee for the Armstrong Student Center is billed to students every semester, for example.
Some projects, however, have used taxpayer money.
State funding paid for most of an $18 million renovation of Kreger Hall, an academic building, finished this fall. And $19.5 million in taxpayer-funds will help to revamp Shiedler Hall, which houses geography courses and labs, by 2016.
Overall, nearly $410 million has been spent since 2009 on major construction and rehab projects costing more than $500,000. During that same time, the university debt load — bonds used to finance construction projects — has risen from $231 million to $679 million, according to Creamer.
Officials are prepared to drop another $268 million on future projects, ranging from an indoor sports practice field to the $98.3 million residence hall, set for construction sometime between 2015 to 2017.
Miami University economics professor James Brock said he wonders how many of the projects have been necessary, though.
“The dorms desperately needed a redo,” Brock said. “All of this other stuff, I have no idea why we’re building new buildings.”
Debt surge
Low interest rates, competition for students and needed renovations have prompted many colleges across the country to put up new buildings on campus.
Ohio State University, for example, is working on a $370 million dorm complex project that will add 3,200 beds to campus by 2016. Earlier this year, too, trustees at the University of Cincinnati passed a $35 million renovation of Scioto Hall and considered new dining and residence halls.
That’s caused an arms race for some universities who are competing for high school graduates, said Richard Vedder, an Ohio University professor and the director of the Center for College Affordability and Productivity based in Washington, D.C.
“University presidents feel, maybe with some justification, that the only way they can attract good students and stay ahead of the game is if they have nice facilities,” Vedder said.
Those renovations have also come at a price.
Debt has increased steadily to $237.5 billion in the last year at 212 public colleges, according to Moody’s Investors Service Inc.
The ratings agency has a negative outlook on the credit used to fund public and private college campus construction. That’s because as debt has risen, tuition revenue is expected to grow by less than 3 percent next year, the lowest amount in a decade. State government funding is growing, but below what it was before the credit crisis, said Edie Behr, senior credit officer for Moody’s.
Meanwhile, costs are mounting not only to maintain and build new buildings, but to pay staff and faculty, Behr said. Public universities have been cautious about increasing compensation and other costs in recent years, but can only delay raises so long, she said.
“I think the competition for students requires that every campus be as pristine as possible,” she said.
For Miami, debt has increased nearly 200 percent in the last five years to the $679 million the university owes today.
“Miami is a great school. Good, high-quality schools can afford a lot of debt,” Vedder said. “But having said that, that doesn’t mean they should go out-of-control borrowing. Miami is pushing the limits of what it can do.”
The university is sitting on $100 million in bond funds that hasn’t been touched yet, but officials plan to use it to fund various dorm projects throughout campus in future years. Trustees haven’t voted yet on which dorms to renovate next.
Other future projects, though, will need to be funded with a different source of cash, namely donations. The university will wean off the practice of borrowing to build, Creamer said.
That means plans for new buildings like the future $20 million Gunlock Family Performance Center, an athletic training facility that was announced Tuesday, will need to find donors to pay for the project from now on.
“I think what’s happening is that there’s a shift in the support for facilities away from debt in favor of positive cash flow and philanthropy and I should add public-private partnerships,” said Behr of Moody’s.
Creamer said the bonds borrowed will be paid off in 25 years through revenue sources such as room and board fees. He said a recent decision to increase dorm fees between roughly 1 percent and 8 percent for residence halls was to adjust for higher costs of providing services, not to repay debt.
Positive labor impact
But all of the borrowing and construction at Miami has helped some area businesses and contractors.
The university’s construction work has been some of the largest and costliest building projects in Butler County during recent years.
That’s helped bolster regional companies and contractors who designed, built and supplied materials for new or reconstructed buildings said John Seibert, the university’s director of planning. He estimates 95 percent of the contractors hired to work on the projects are stationed within 100 miles of Oxford.
Even the university’s famous red bricks — nearly all of the buildings boast a brick exterior — are sourced through Ohio suppliers.
“We’re really having a positive impact as it relates to labor,” Seibert said.
Contractors who work on projects and spend money here locally can have a ripple effect on the community’s economy, said Brock, the economics professor.
“The university spends God knows how many millions of dollars on rebuilding the entire university. The people working on it, they’re getting paid and they go uptown and buy lunch,” Brock said. “That’s the general idea … You spend a dollar (on construction) and it may be re-spent two, three, four or five times, depending on the circumstances.”
Champlin Architecture, a firm with offices in Cincinnati and Dayton, is one of the local firms that benefited from Miami’s construction boom. The firm helped to design the school’s master plan for dining and residence hall renovations.
Mike Battoclette, a senior principal with Champlin, said he’s seen an uptick in construction demands from college campuses across the region. In recent years, his firm has worked on projects at college campuses in Ohio, Indiana and Kentucky.
He said many colleges are upgrading academic buildings or enhancing dorms with semi-private bathrooms and suites.
“It’s all driven by enrollment and putting your best foot forward,” Battoclette said of campus renovations. “I think it weighs into (prospective students’) decisions.”
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