Artist rendering of interior of proposed VCU Arts and Innovation Building

by Dick Hall-Sizemore

Those of us at the state Department of Planning and Budget (DPB) who worked closely with the capital budget used to marvel at the submissions from higher ed institutions. It did not matter how much had been approved and funded in the recent past; each year there were more and bigger requests. One of my colleagues summed it up succinctly: “For higher ed, there will never be enough.”

It seems that the upcoming budget year will not be an exception. The four-year institutions of higher learning have submitted budget requests to the Governor for capital projects with an estimated cost of over $3.6 billion.

Not too many years ago, a project costing $100 million or more was unusual. There are 12 projects on the current request list that have estimated costs of more than $100 million.

Leading the list is UVa’s $347 million Bioscience Building. To be fair, the university is requesting only half of that ($173.7 million) in tax-supported debt, with the remainder to be financed by revenue bonds. UVa also has the third most expensive project: a $195.4 million Center for the Arts. The funding for this project would be $127 million in tax-supported debt, $50 million in grants, and $18.4 million in revenue bonds.

It was an article in Monday’s Richmond Times-Dispatch regarding a proposed capital project at Virginia Commonwealth University that renewed my interest in this general area. Those of us who have lived in the Richmond area for a long time have observed the remarkable physical expansion of Virginia Commonwealth University (VCU) and how it has transformed downtown Richmond. One could be forgiven for assuming that the school’s construction boom had reached its peak. However, as reported by the RTD last May, the VCU Board of Visitors has approved a six-year capital outlay plan with an estimated cost of $1.2 billion.

For the 2022-2024 biennium, the school has requested appropriations for the first two components of that plan: an Arts and Innovation Building ($181 million) and an Interdisciplinary Classroom and Laboratory Building ($152 million). Of the $181 million for the Arts and Innovation Building, $163 million would be tax-supported debt and $18 million would come from revenue bonds.

The purpose of capital projects is generally clear for most agencies. However, that is often not the case with higher ed. Those institutions have a language all their own. Here is the description of the purpose of the Arts and Innovation Building that VCU included in its budget submission:

The proposed 209,500 gross square foot Arts and Innovation Academic Building will be located on the southeast corner of Broad and Belvidere Streets, consolidating arts and innovation programs in a single location. It will be home to new hybrid classroom-laboratories, interdisciplinary performance and makerspaces, and creative incubators for rapidly growing partnerships across arts, business, medicine, and engineering. The facility must be highly flexible with the ability to rapidly reconfigure space on a regular basis. The activities in this building will range from opera to quantum computing; integrating the disciplines of engineering, cinema, theater, immersive media technology, gaming and the creation
of new knowledge.

Along with the Institute for Contemporary Arts Markel Center, the building will anchor the east side of the Monroe Park Campus and act as a “front door,” highlighting the university’s status as a premier arts institution and providing a link to the Downtown Richmond Arts District.

And why is such a facility needed?  Here is part of the school’s explanation:

Positioned just steps away from Fortune 500 companies, a new Arts and Innovation Academic Building will provide a launch pad for critical digital and creative economy initiatives both on campus and in the city, and will prepare students for a world of emerging creative industries. … Geography and quality of research, laboratory and classroom space are currently challenges for VCU’s arts and innovation programs, with 17 departments and programs spread across 20 campus buildings. The new space will consolidate many of the existing arts and innovation programs in a single location, allowing VCU to redeploy those sites for other purposes. … Focusing on a single project or objective, teams from various areas of expertise will collaborate on projects, allowing academic models to simulate the commercial media and product development experience. This building will enable the university to maintain its leadership position in arts education, innovation and media while also integrating other academic disciplines.

Nowhere in this submission is there any explanation of what constitutes an “innovation” program. I wonder what a “makerspace” is. (That is not a typo on my part.) I did not realize that one could “create knowledge”.

The justification put forth for the Interdisciplinary Classroom building is a little more clear, but fairly vague and remarkably brief, considering the school is asking for $152 million:

The need for additional instructional and class lab space is documented in the university’s 2015 space needs analysis. This project builds upon three of the six guiding principles in the ONE VCU Master Plan – student success, program synergies, and placemaking. It adds interdisciplinary classrooms and class lab space, creating program synergy and accommodating growth in the science and math programs within VCU’s College of Humanities and Sciences. Student success is enhanced by having adequate lab and classroom space to enable students to take the classes and labs in the sequence needed to earn their degrees in a reasonable time.

My Soapbox

These may be worthwhile projects; I am not in a position to judge. But, in exchange for $315 million, it seems to me that VCU owes the Governor, General Assembly, and the public a more thorough explanation of the purpose of the facilities and why they are needed.

I still have a hard time grasping why these projects cost so much, but that seems to be the norm. As I reported several years ago, the General Assembly balked at the $373 million price tag for replacing Central State Hospital and pushed the Department of Behavioral Health and Developmental Services to scale the project back. The project is still in the planning stage. As has been reported on this blog, the need for additional mental health beds has become obvious recently, as the agency has had to suspend intakes because no beds were available. We will not know until later in December when the Governor submits his proposed budget whether these two VCU projects, as well as other big-ticket higher ed projects, will be included. If they are, it will be interesting to see if the General Assembly, especially the new majority in the House, gives them the same scrutiny that is given to projects requested by other agencies.

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29 responses to “There Will Never Be Enough”

  1. I share your concerns. If this new building is such a great idea, then VCU should go to its alumni and friends in the community to raise the money — not to the taxpayers of Virginia.

    I’ll be posting another VCU story in just a moment — a new faculty report makes the point that the university suffers from major administrative bloat, funneling funds into expanded managerial staff and pay rather than (as the professors would prefer) hiring more tenure-track faculty. Why should taxpayers fund a nearly $200 million center for the arts when VCU management is lavishing so much money on itself?

    1. Stephen Haner Avatar
      Stephen Haner

      See above. 🙂

  2. Paul Sweet Avatar

    Construction costs have been going out of sight, but $864 per square foot seems awfully steep! The Division of Engineering & Buildings cost database ranges from $350 per SF for classroom buildings, to $400 for engineering labs, to $667 for research labs. These are 2020 figures, so about 10% should be added for inflation.

    BTW, a Maker Space (or Fab Lab) is for teaching and practicing advanced fabrication techniques, such as 3-D printing, laser engraving & cutting, etc. These are often found in new STEM buildings.

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      Thanks for educating me on what a Maker Space is.

      1. YellowstoneBound1948 Avatar

        It’s too bad that VCU does not have to file for a Certificate of Need (CON), as hospitals (at least, in my state) must do. If these grandiose spending proposals were subject to government watchdogs, that might help these colleges maintain their usefulness to Virginia.

    2. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      Because this building is going to contain a combination of classroom and lab space, you would think the cost per square foot would be somewhere between those two costs, even allowing for future inflation.

      Your reference to the Division of Engineering and Buildings, which is part of the Department of General Services (DGS), is an apt one. I need to clarify that, even if approved, the requested amounts will not necessarily be the approved costs. There is a process, much too convoluted to go into here, whereby DGS must review and approve the costs of authorized capital projects before DPB will allocate the funds. In some cases, the final approved costs are lower than the original requested amounts and, in some cases, although fewer in number, the final approved costs are higher than the original requested amounts.

      1. Paul Sweet Avatar

        I worked for the VCCS for 14 years and spent way too much time tangling with BCOM & DEB over their opinion of what a building should cost. We were usually lucky to get the lower end of the scale.

    3. Paul Sweet Avatar

      I will cut VCU a little slack. Total project costs are usually 25 – 35% higher than construction costs to pay for A/E fees, DEB review charges, agency project inspector, third party testing lab (for structural inspections), surveys, VE (value engineering) study, and other costs required by state laws & regulations. That still leaves a construction cost of $640 per SF.

  3. YellowstoneBound1948 Avatar

    After I am elected President, the first thing I am going to do is fire all of the nation’s college presidents. To make sure I get away with it, I’ll invoke the War Powers Clause.

    This never-ending expansion of the nation’s (state-owned) colleges and universities must end. Just who do these narcissists think will want to attend their bloated school ten or twenty years from now? Recent high school graduates? I don’t think so. They are already working. My 28-year-old nephew paints houses for a living, and this year he will make over $100,000.

    I swear, I look at some of these expansion proposals, and I think of Mrs. Winchester.

  4. Nancy Naive Avatar
    Nancy Naive

    And as it is written, so shall the culture be cancelled….

  5. in Fall 2022 VT will be taking our taxes and placing microwaves and frigs in every dorm room to increase room costs, which will raise the student debt which China Joe ‘Bug out’ Biden will forgive.

  6. Nancy Naive Avatar
    Nancy Naive

    Based on the assumption that you will only receive a portion of what you ask, what then should you submit?

  7. LarrytheG Avatar

    Thanks once more for an excellent public-policy, culture-war-free blog post !

    I suspect it’s a little like a Higher Ed Lottery where the GA has a demonstrable track record of lavish funding for higher ed capital projects to the point where, as you point out, they will fund higher ed out the wazoo while they “study” mental health facilities needs.

    There is a cure for this. VDOT has the process and it’s called Smart Scale.

    Every year they have a capped (discrete) fund and they invite proposals from across the state and the projects are ranked according to transportation-related criteria. The top-ranked projects get funded to the limit of the available fund and the others stay in the running for the next year where other new projects are also added and ranked.

    I believe this process started at about the time Aubrey Lane was at VDOT and in my mind, it has proven to be a winner and the prior problem that VDOT had of way too many projects for the money they had – has pretty much gone away.

    Want a project? Demonstrate it’s value and let it compete against other projects. I like it.

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      DPB once tossed this idea around–ranking capital project submissions from agencies. The main obstacle was how to compare projects from agencies with different missions. With VDOT, the projects are all highway-related; therefore, it is possible to develop objective measures. But, how do you compare the relative value of a capital project submitted by the Dept. of Conservation and Recreation with one submitted by the Department of Corrections or James Madison University?

      1. LarrytheG Avatar

        It won’t work across agencies but it will work when funding different entities within an agency.

        BTW, there is more than “highway”. It includes transit, rail, and ped/bike.

        Developing a fair and objective criteria is a significant task and it will evolve over time but the bigger point is to cap the expenditures to a set amount and then fund what can be afforded according to how they rank on the criteria.

        I’d do similar for in-agency. Commit a level of funding for capital projects and let the agency prioritize.

        The bigger point overall is to have a defined process that controls the spending as opposed to it being wild wild west politics.

  8. walter smith Avatar
    walter smith

    Look! The Left and the Right coming together! The Lion laying down with the Lamb…
    Please beat up on UVA with its unaccountable $14 billion tucked away in tax-exempt foundations and a President determined to make “citizens of the world” (ie – programmed useful idiots to advance Leftism). Get back to EDUCATION! Quit the political posturing and spend money like it is your own, not in these drunken academic bacchanalia binges (bacchademicanalia?)
    Hey, the VCU proposal had “interdisciplinary” and “makerspace” – did it have an “underserved” art community? You know…Art Equity!

  9. The General Assembly should follow Nancy Reagan’s advice and “Just Say No” to funding bloated university projects of questionable value.

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      At DPB, it was well known that periods of low increases in revenue, or even falling revenue, were the easiest in terms of budget development. “Just say no”. When the state is flush with new revenue, like now, it is much harder for the budget writers, in the administration or the legislature, to say no.

      1. DJRippert Avatar

        Another reason why Youngkin got elected. He wants to cut back the state’s revenue (i.e. taxes) and return some of the surplus to taxpayers. The elite in our university system want to build … “The activities in this building will range from opera to quantum computing; integrating the disciplines of engineering, cinema, theater, immersive media technology, gaming and the creation
        of new knowledge.”

        Quantum computing?

        That’s a real stretch.

        I guess dropping in the latest tech buzzword with no sense of how it might even possibly be applicable makes for better reading.

  10. Stephen Haner Avatar
    Stephen Haner

    Gee, I wonder if there is a connection between this demonstration of unrealistic dream world thinking and yesterday’s discussion of how the boards of visitors have set up a screening process to be sure that only like-minded elites join them on the panels….Skeptics, naysayers and those who ask inconvenient questions are screened out rapidly. Just a guess, but could they be related?

  11. Wahoo'74 Avatar

    This is a very revealing article. I have worked in the corporate finance sector for over 4 decades and have a couple observations:
    1) If a manager presented a capital request even remotely that large in the private sector with such a completely unintelligible project description and no clear explanation of the need or return on investment (in this case, qualitative learning improvement) he/she would be laughed out of the room. He/she would also most likely be terminated.
    2) There is zero validation of how “interdisciplinary performance and makerspaces” benefit the educational outputs of ostensibly disparate departments. To put this in plain English, not academic psychobabble, when I was discussing a capital investment or the purchase of a company with a corporate client, the advice obtained from a surgeon, artist or sociologist was of no benefit. Being in a room within a $152MM building doesn’t change this fact.

    This project appears to be a total waste of taxpayers’ money.

  12. Paul Sweet Avatar

    Actually, SCHEV (the State Council for Higher Education in Virginia) evaluates and ranks all higher education funding requests for state colleges & universities.

    Priority 1: Support space needs for instruction and research, critical maintenance and other programmatic justifications.

    Priority 2: These are projects that do not meet the space and productivity criteria in the Council’s Fixed Asset Guidelines but have some compelling programmatic justification.

    Priority 3: These are projects that do not meet the space and productivity criteria in the Council’s Fixed Asset Guidelines and have less immediate space and programmatic need.

    Priority 4: These are non-guideline requests. No assessment is made.

    Of course, agencies can and do enhance their justifications to try to get them into a higher priority. However, so many requests are submitted every year that many Priority 1 projects take several biennia to work their way up the list until they can get funded.

    Here is SCHEV’s recommendation for the 2022-24 biennium:

    1. LarrytheG Avatar

      Thank you. Does that mean that some projects get denied?

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        yes, many will be denied. There is not enough money or debt capacity to fund all of them, even if they were all justified.

        1. LarrytheG Avatar

          Do these projects affect the financials of the institution or are they 100% funded by the state?

          1. Paul Sweet Avatar
            Paul Sweet

            I believe that almost all state capital construction projects have been bond financed since the 2008 recession. One problem is that the amount of bonds outstanding is limited to a certain percentage of state income so Virginia can keep an AAA bond rating. Many projects were delayed for several months while waiting for state income to build and previous bonds to be retired before the funds for an approved project could be released.

            Certain projects, such as parking facilities, recreation centers, cafeterias, etc. are considered auxiliary enterprises. They are funded by a separate series of bonds, and the colleges or universities are responsible for paying these bonds off from revenues from these enterprises. In addition, VCCS colleges had to contribute their own funds for sitework costs.

          2. LarrytheG Avatar

            Thanks. So the “core” capital facilities costs are born entirely by the State without a match or partial funding by the University?

            And SCHEV vetts the projects according to some specified criteria?

          3. Paul Sweet Avatar
            Paul Sweet

            Yes and Yes

            Although sometimes an adequate gift to the program that will be taught in the building will get the donor’s name on the building.

          4. LarrytheG Avatar

            thanks Paul!

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