• Plan could create privately owned, upscale apartment on SDSU campus
BROOKINGS – South Dakota State University could take a step forward this week with a plan that has been controversial in Brookings: to create a privately owned, upscale apartment building in the northwest corner of its campus.
The South Dakota Board of Regents, meeting today through Friday at Dakota State University in Madison, will vote Thursday on a recommendation by Executive Director Jack Warner. If approved, it would authorize the board president to appoint an ad hoc committee to issue a request for proposals (RFP) to build the apartments, evaluate proposals and make a recommendation to the board.
SDSU is requesting this in order to expand student housing through a ground lease to a private investor, who would assume full responsibility to finance, construct, operate and maintain the apartment building.
“The object of the arrangement would be to provide for student housing without creating any obligation that would affect the debt capacity of the university or the board and without any adverse effect on the financial rating of the university or of the board’s consolidated, multi-institutional revenue system,” the board’s agenda says.
Warner recommends the RFP state that “acceptance of any proposal will be contingent upon confirmation by one or more rating agencies selected by the board that the financial commitments for the construction, operation and maintenance of the facility, from inception through termination of the ground lease and associated development and operating agreements, will not reduce the debt capacity of the university or the board and will have no adverse effect on the financial rating of the university or of the Board’s consolidated, multi-institutional revenue system.”
Part of master plan
According to SDSU’s Updated Residential Life and Dining Services Master Plan for 2011-2018, this apartment building is planned as one step in the formation of an upper-division and graduate student neighborhood.
The university also plans to set aside 320 beds in Bailey and Berg apartments for upper-division students (these apartments would be modernized during Phase III of the plan), and to dedicate 132 beds in Waneta Hall and 52 beds in Wecota Annex to single-occupancy rooms for upper-division students.
The new apartment building would be located west of Medary Avenue, bounded by the Agricultural Heritage Museum on the south, Medary Avenue on the east and parking lots on the north and west.
To provide food for students in this northwest neighborhood, SDSU plans in 2013 to create a dining site in the lobby of Hanson Hall.
SDSU officials tell the Board of Regents that the new, privately-owned apartment building should directly increase its graduation rate by helping it retain students who might otherwise drop out or transfer.
“Furthermore, on-campus options are absolutely essential to be competitive for the very best graduate students so critical in advancing grant and contract funded research, the base for research-derived science- and technology-based economic development,” SDSU officials report in documents provided to the regents.
Developers have concerns
However, Brookings developers have spoken strongly against this proposal since it was unveiled in September 2009, saying that it would give the private partner chosen for this project an unfair advantage, specifically because no property tax is charged for state-owned land.
That would mean not only could the building’s owner turn a better profit than owners of competing rental properties, local developers have argued, but the Brookings School District, Brookings County and townships would not benefit from property tax revenues with this project, as they would with one on private land.
Dennis Bielfeldt, developer of Innovation Village on the northeast side of campus, told the city council in January that “the overwhelming majority of developers are very concerned about this.”
John Mills of Mills Development also spoke to the council against the project.
“Dr. Chicoine mentioned a coffee shop – all things that already exist and are being done by the private sector. I remain concerned about allowing our public institutions to get further and further into the business the private sector is best at.
“I’m concerned about the unfair competition that that represents, and I remain concerned about the property tax loss that supports our K-12 education and our city government and infrastructure and all the other things that we need,” Mills said.
When it was first introduced, the northwest neighborhood project included plans for retail space, a hotel/conference center and an active adult community. It also called for relocating and expanding the Ag Heritage Museum.
After backlash from local developers and participating in talks conducted by the Brookings Economic Development Corporation, SDSU President David Chicoine told the Brookings City Council in January that an apartment building was still planned, but everything else had been dropped for now, except maybe “a coffee shop or something like that” for students living in that area.”
Read more of the proposal at www.sdbor.edu, under “The Board” tab, by clicking on Agenda Items, then on June 27-29.
Contact Charis Prunty at cprunty@-brookingsregister.com.