The Lory Student Center now has the go-ahead to make several building improvements for the Fall 2003 semester.
The Board of Governors of the CSU System approved the student center’s proposed refinancing and renovation on Monday. If they had not approved the project, CSU and the student center would not have been able to complete the renovations in their current form.
The project, which will renovate the food court, the CSU Bookstore upper level and the North Ballroom, Cherokee Park Ballroom and the University Club, will be funded through a refinanced bond extension from 1992 at a lower rate than before. The project is estimated to cost $4.5 million.
“(The Board of Governors) supports the university’s desire to refinance our bonds and to proceed with the renovation,” said Michael Ellis, director of the student center. “When we talk about attracting students to CSU and serving students, (the student center) is one of their first impressions of what the campus has to offer.”
Two key aspects of the refinancing plan are CSU’s high bond rating and the presence of cross pledging between the four auxiliaries of the plan, Ellis said.
CSU received an A-1 bond rating from Moody’s Investors Service Inc., a national bond-rating agency. The ratings are based on school enrollment, tuition and fees, research dollars and other financial considerations, said CSU Treasurer Jackie Maccagnan.
“(The rating) is a very good rating for an institution our size,” she said.
A higher rating means a lower interest rate on the bond when the university is borrowing money for capital construction projects, as well as lower payments in the debt payback, Maccagnan said.
The cross pledging of the four auxiliaries will combine pledged revenues from Housing and Food Services, Hartshorn Health Center, the Student Recreation Center and the student center and will likely save the university about $48,000 in the cost of selling the bonds on this deal and in future deals.
These pledged revenues, while kept separate for CSU accounting purposes, are seen by the rating agency as a single revenue stream, which helps lower CSU’s interest rates and lower the bond issuance costs, Maccagnan said.
“Because the interest rates are so low, the time to do (the renovation) is now,” said Linda Kuk, vice-president for student affairs. “It’s a good deal for everybody. I think it’s important that students know they’re getting a good deal.”