May 21, 2009
VERMILLION — The South Dakota Board of Regents authorized The University of South Dakota Thursday to go ahead with its plans to construct Coyote Village, a new student housing project that will be located south of the DakotaDome.
The new housing, a 550-bed facility designed with qualities shared by modern apartments rather than college dormitories, will sit on 15.3 acres of land where a trailer court was once located.
Regents gave university officials permission to acquire the land from the USD Foundation at a cost of $1.9 million. The land transaction closes on June 3, enabling construction to begin this summer.
Immediately after approving the building project, the Regents also gave the go-ahead to the issuance of revenue bonds totaling $90.3 million to pay for the construction of Coyote Village and a new wellness center at USD, and several other new and renovated building projects at state-run education facilities across South Dakota.
The estimated construction cost of Coyote Village is $26.2 million, which calculates to be between $110 and $120 per square foot. Funds totaling approximately $12.3 million have been allocated for the new wellness center.
University officials first shared details of the new housing plans with the Regents last December.
Richard Van Den Hul, vice president of finance and administration at USD, told the Regents Thursday that Coyote Village would consist of “super suite” and apartment units. The suites will contain four-bedrooms and two bathrooms; the apartments will consist of two bedrooms and one bathroom.
Van Den Hul said the new housing is designed for “sophomores and above.
“It will allow us to raze Cypress (Courts) and Redwood Courts,” Van Den Hul told the Regents. It will also give the university the option to transform some double-occupancy rooms in existing dorms to single-occupancy.
“Originally, this was a private-public partnership deal with the (USD) Foundation that included privatized financing,” he said. “It was to be secured by the assets and the revenue of the project. Unfortunately, with the economy and the banking world being what it is, project financing deals are not getting done as they were in the past.”
It was decided, he said, to build the new housing as a state project.
“We started working last month with the office of the state engineer on how we might do that,” Van Den Hul said, “and it was decided it would work as a design-build project.”
Design criteria were developed, and requests for proposals were made.
“We received seven proposals that were then rated by a technical review committee selected by the state building committee consisting of two engineers and one architect,” he said. “They reviewed all of the proposals.”
The recommendations received from RISE, Van Den Hul said, received the highest rating from the review committee. The state building committee agreed with those findings.
RISE has offices in Atlanta and Valdosta, Ga., and is one of the nation’s leading developers, builders and managers of university communities, with expertise in financing, construction and development of both on- and off-campus communities.
“This is an important project for our students, it will help with recruitment and retention, it’s part of our strategic master plan, and part of our housing master plan,” Van Den Hul said.
The purchase of the 15 acres where Coyote Village will be built, he added, was included in the university’s long-term land acquisition plan.
The Regents are taking advantage of “Build America” bonds to help finance the housing project.
“The Build America bonds are part of a program included in the stimulus legislation enacted by Congress,” said Monty Kramer, the Regents’ director of administrative services. “It’s a two year program, and within those two years, you can issue taxable bonds and it provides for a 35 percent rebate on the interest payable for those bonds backed by the federal government.”
Kramer said the Build America bonds would be sold as taxable bonds. The rebate could either go to the buyer or the seller of the bonds, and the Regents, who are the sellers in this case, have chosen to be the recipient of the rebate.
“We will have to apply twice a year to get interest subsidies paid back to us in the form of a check from the federal government,” Kramer said.
He added that if something should go awry and the subsidy would not be available in the near future, the regental financial system is still strong enough to meet its debt requirements.
The maximum annual interest rate on the financing is approximately 6 percent, Kramer said. The subsidies would knock down the interest rate to just under 4 percent.
Student rent, parking permits and commission from convenience store sales are listed as revenue for the project.
See more at Yankton Daily Press & Dakotan