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Legislature's bill to auction off dorms unlikely to pass

By Cyndy Cole
Arizona Daily Wildcat
Tuesday February 4, 2003

PHOENIX ÷ Sen. Robert Burns (R-Phoenix) introduced a bill yesterday to auction off all UA residence halls that have been paid for in full.

The bill, if passed by the legislature and signed by the governor, would mean higher expenses for students who live on campus.

Burns said Friday that he planned to introduce the bill, which proposes that the UA sell its residence halls, the land beneath the residence halls and any dining facilities within the halls to the highest bidder.

Any corporations that were to buy the dorms would have to rent them out as residence halls and offer the university renewable 25-year contracts.

Residence halls that are paid off at Arizona State University and Northern Arizona University would also be sold under the proposal.

Funds from such a sale would go back to the state, which is facing a $1.3 billion budget deficit this year.

But there may not be much of a future for the proposal beyond the four Republican legislators who signed onto it, Burns said Friday.

Residence Life Director Jim Van Arsdel isn't keen on the proposal because he does not want to lose UA land or see students pay more for on-campus housing.

"The byproduct of this particular strategy is to do a number of things, none of which are in the students' best interest or the interest of higher education," he said.

Though stipulations could be made in a contract, a private business may not maintain the buildings the way that the university does, Van Arsdel said.

"I don't know whether students on this campus realize it, but the quality on this campus of the residence halls is quite a bit above what it is on other campuses."

UA is, however, building graduate student apartments near Euclid north of Coronado Residence Hall in a public/private venture. The development corporation, La Aldea, is building the $21 million apartments, leasing and managing them, with an agreement to abide by the same student behavior policies and payment schedules the Residence Life keeps for other campus housing.

But the university keeps ownership of the land the apartments are being built on.

The main difference in the La Aldea case, is that the private corporation will have to charge more in rent to turn a profit and pay investors back, whereas the housing managed by Residence Life is not on a for-profit market and only aims to pay back bondholders at a low interest rate.

For example, Residence Life partially equalizes the difference between rents for students who live in new dorms and those who live in older dorms, so students who live in new buildings aren't paying the entire cost of their buildings.

In the case of La Aldea, student renters pay the cost of building a new facility and more to generate profits for La Aldea.

Legal staff for the Arizona Board of Regents met with a senate committee on assets Friday to discuss proposals to sell UA residence halls and lease them back as lawmakers consider what assets can be quickly sold off to generate money.

Aside from the legal question of whether the Arizona Legislature could sell buildings that belonged to the Arizona Board of Regents, the way the dorms are financed would make it difficult to sell some buildings, but not all, the legal staff concluded.

Currently, the dorms that are paid off serve as collateral for the dorms that aren't.

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