With Mounting Costs, Lee Hall Accrues Debt

By KATY BURNELL

wo million additional dollars are needed to finance an overhaul of Lee Hall, a project that was initially slated to cost $17 million, according to Vice President of Administration and Finance Rick Hurley.
Hurley said UMW’s original cost estimate fell $1.5 million under the lowest bid from six different construction firms, which prompted the school’s request for $2 million from the General Assembly.
If passed, State financing would absorb the $1.5 million cost overrun, and provide a $500,000 cushion for the contingency costs that Hurley said were inevitable during large-scale construction projects.
“We need the contingency because in a renovation, you never know what you are going to run into when you start tearing down walls and taking up floors,” Hurley said.
According to Hurley, the $2 million supplement would not draw from the same voter-approved bond-package that’s currently covering $16 million worth of Lee Hall construction-related costs, but other state-issued bonds would be used to finance the cost overrun.
“Lee Hall was originally funded through the General Obligation Bond bill which was approved by voters back in 2002,” Hurley said. “This is considered debt because the state borrows the money through the issuance of bonds.”
Hurley said that $1 million of the $17 million currently appropriated for construction will come from student funds, to cover the cost of moving the University’s bookstore to the modular units located on Westmoreland’s lawn.
“The bookstore is independently owned and operated,” Hurley said. “So we have to cover the costs associated with it.”
Bookstore Director Kim McManus said that students can expect some good deals as the March 27 move-out date approaches.
“The gift items and apparel will be the last to be boxed up,” McManus said. “But there’s not going to be as much room when we move so some things will have to go.”
McManus is apprehensive about moving to the modular units, but said she is looking forward to a renovated Lee Hall, which will include enough additional space for the bookstore to hold a small sitting area with coffee service.
“It’s a big undertaking, but we’ve lived through a renovation before,” McManus said. “When the construction’s done we’ll have a front door, and display windows, which will be great.  People visiting can’t always find us, because we’re kind of hidden down here.”
Some of the modular units that will be housing the bookstore during the 18-month construction period were brought to campus Saturday, Feb. 17.
Hurley responded to student complaints about the loss of Westmoreland lawn, and denied rumors that the lawn would be converted into a parking lot.
“Absolutely not, we’re not going to pave over the lawn,” Hurley said. “And show me where on campus we could have put [the modular units] without taking up the students’ play area.”
The occupation of Westmoreland lawn will not be the only loss students face during Lee Hall construction.
Parking spaces currently reserved for sophomores and juniors will be usurped during the construction period when contractors inhabit part of the Sunken Road parking lot. The University will not know the number of spaces lost until the contractor comes on site, according to associate vice president of facilities services John Wiltenmuth.
“We don’t have an exact count. We have to wait for the contractor to come on site to determine how little space we can give him keeping as much for our students and faculty as possible,” Wiltenmuth said.  “But he obviously needs enough space to do his construction work.”
Hurley said that traffic congestion around Lee Hall could be problematic, but that any of Sunken Road lot’s 196 parking spaces lost to construction could be covered by the 440 space parking deck.
“We’ll be directing the parking that they’re going to lose to the construction site to the deck,” Hurley said.
Student fees will not finance the $16 million debt UMW accrues from the Lee Hall project, but the proposed new Residence Halls and Goolrick field improvements will be paid for with student dollars.
“The University has to bear the cost of the debt it takes on for the dorms and Goolrick field improvements,” Hurley said. “The money comes from fees students pay to live in the dorms or the comprehensive fee where Goolrick Field is concerned.”
The lowest-bidder for Lee Hall project, D.C.-based Smith Management Construction, Inc., has not been awarded the construction contract, according to Ellie Drew of UMW’s purchasing office.
Drew said that S.C.M.I.’s bid was not unreasonable, because construction estimates are generally difficult to perform.
“We never really know what kind of numbers to expect. We have a ball-park figure, but costs change all the time,” Drew said.
Wiltenmuth agreed.
“Ideally you want everything to come in under budget estimates,” Wiltenmuth said. “But quite often that’s not the case.”
Wiltenmuth said bids for the recently-constructed Jepson Alumni Center also came in over-budget.
Construction on Lee Hall will experience a slight delay while the University secures additional funding, according to Wiltenmuth, who said that dealing with bureaucracy can be a frustrating experience.
“It’s not unlike the wait at the DMV,” Wiltenmuth said. “There’s a procedure, a process, the employees have a way of doing things, and sometimes it takes longer than we all would like.”
Both Hurley and Richard Pearce, associate vice president of business and finance, expressed relief that the low-bidding firm was only $1.5 million over budget.
“It’s not that bad of an increase,” Pearce said. “The cost of construction has been skyrocketing over the last three years. We were happy that it was only $1.5 million over.
“I…was relieved that the bid was only over in the amount that it was… because some projects across the state have come in much higher over their budgets.”
UMW joins several other state schools in requesting additional funds from the Virginia General Assembly to finance campus construction projects.
The renovation and expansion of Lee Hall is included in a list of projects designated “high-priority” this month by a House Appropriations subcommittee report to the State General Assembly.
The report highlights $168.8 million dollars worth of higher education and state park construction cost overruns recognized in House Bill 1712 as eligible for State financing.
Other high-priority construction projects included in House Bill 1712 $42 million for the new School of Education at the College of William & Mary, $36 million for a new Informational Technology Engineering building at the University of Virginia and a $15.3 million addition to Longwood University’s Bedford Hall.
Pearce was confident in the University’s ability to secure $2 million in addition to the $16 million in state bonds already authorized for the costs associated with renovating and expanding Lee Hall.
“The General Assembly doesn’t want us coming back to them half-way through the project and saying ‘hey, we’re this far along and we need more money to continue.’” Pearce said. “It’s in everyone’s best interest to take care of things as soon as possible.”
If the $2 million request passes the General Assembly, Governor Kaine will have 30 days to either amend the bill and send it back to the House, or sign the bill into law.  The bill could be in effect as early as April, according to Pearce.