The Oregon State University Board of Trustees voted unanimously on Monday to authorize the $19.8 million purchase of an off-campus building to serve as a biological and chemical research center and to seek state approval for $160.5 million in capital construction in the 2019-21 budget cycle.
During a two-hour meeting conducted via telephone, the board also discussed a proposal to build an official residence for the university president at a cost of about $2 million.
OSU has reached an agreement in principle to buy a two-story, 103,000-square-foot building at 4575 SW Research Way, in the Sunset Research Park in southwest Corvallis. The purchase is contingent on the outcome of various building inspections.
The property's estimated real market value is $13.6 million, according to the Benton County Assessor's Office, but that does not include the value of tenant improvements to the structure.
A staff report presented to the board says the building creates “the potential for an innovation hub in the biological and chemical sciences … that would integrate industry, academic research and startups.”
It would eliminate the need to construct a new science, technology, engineering and mathematics building at a projected cost of about $70 million (a priority identified in the university’s 10-year capital forecast) and would also provide temporary space for students and faculty displaced by the planned second phase of renovations to Cordley Hall.
Built in 1985, the Research Way building has primarily served as the home of two biotech companies, Sarepta Therapeutics and Siga Technologies. Sarepta moved out last year but is still under lease. The company has expressed an interest in terminating its lease early in exchange for the value of research equipment and tenant improvements at the site.
Siga would continue to lease space in the building, along with a smaller tenant and two telecom companies that have cell towers on the premises. OSU projects income from those leases of $1.6 million over the next five years.
The trustees also agreed to ask the state Higher Education Coordinating Commission to approve $160.5 million for capital construction over the next biennium. The HECC works with the state’s seven public universities to present a joint capital funding request to the Legislature every two years.
OSU’s request calls for $92.5 million in state-paid bonds, $33 million in OSU-paid bonds and $35 million in donations.
This is how the money would be spent:
• A new educational performing arts center on the Corvallis campus. The $70 million project would include renovating and expanding the LaSells Stewart Center to bring a number of programs currently scattered across campus under one roof.
• Phase 2 renovation of Cordley Hall, a 236,000-square-foot structure built in the 1950s that houses much of the research space for the colleges of Science and Agricultural Sciences. The project would modernize the building’s 105,000-square-foot west side and complete deferred maintenance on the entire structure at a cost of $56 million.
• Construction of a $17 million student success center at OSU-Cascades in Bend.
• $17.5 million for a second phase of land development on the site of a former landfill at the Cascades campus.
The board also had a discussion on plans to build a new presidential residence.
OSU had an official residence on Brooklane Drive when Ed Ray was hired for the top job in 2003, and Ray lived there for a few years. But eventually he and his wife, Beth, bought a home of their own, and the Brooklane house was sold in 2011 for $455,000. Ray still receives a housing stipend of $2,500 a month.
Ray’s current contract is set to expire in June 2020, and while he has not talked about retiring, the board is beginning to think about the process of attracting a successor.
An official residence “would be an awful good recruiting tool,” Trustee Darry Callahan said.
A majority of U.S. universities provide housing as part of the president’s compensation, board secretary Debbie Colbert told the trustees.
“It still is the norm,” she said. “About 70 percent are still providing a residence to the university president.”
In addition to serving as the president’s home, the residence also is typically used for dinners, receptions and fundraising events.
Trustee Patty Bedient said official residences are typically at least 5,000 square feet, though some can be much larger — the presidential homes at Rutgers University and the universities of Michigan, Illinois and Maryland, she said, are in the 14,000-square-foot range, and some are even bigger.
“To summarize, we don’t want a mansion, but we want a house that will be presidential, that will reflect well on the university and that will be around for a number of years,” Callahan said.
After looking at what was available on the local real estate market, Colbert said, OSU staff and administrators decided to pursue plans to build a new house on land owned by the university. The proposed site is west of 35th Street and north of Harrison Boulevard, across the road from the OSU dairy farm.
The budget for the project is between $2 million and $2.4 million, which would be funded by the proceeds from sale of the Brooklane house and donations from university supporters.
Board member Paul Kelly noted that he was “not a real enthusiast” about the idea, pointing out that there would be ongoing maintenance costs and remodeling expenses whenever a new president was hired — assuming the candidate even wanted to live there.
But because the estimated cost of the project is less than $5 million, it does not require the board’s approval.
Steve Clark, OSU’s vice president for marketing and university relations, said after the meeting that there was a consensus among the administration to proceed with the plan.
“At this point, we feel confident that this is a wise decision and we will move forward,” he said. “It’s a customary practice for most universities.”