Eugene Weekly : News : 01.26.06

People or Parking?

The UO offers incomplete answers on Westmoreland.

BY KERA ABRAHAM

The debate over the proposed sale of the university-owned Westmoreland Apartments drags on, with UO senior administrators defending the sale and just about everyone else — tenants, student groups, the ASUO, the UO Senate, the UO classified employees' union, several neighborhood associations, a citizen group and five state legislators — arguing against it. For many of the critics, perhaps more disturbing than the displacement of about 400 students and their families is the UO administration's lack of transparency around the sale.

Since announcing their intent to sell Westmoreland in October, UO officials have been asked repeatedly what they plan to do with the estimated $15 million to $18 million in proceeds. Until recently, they have said only that they will commit to the money to "strategic property acquisitions" and eventually — maybe indirectly, with revenue generated by those acquisitions — housing. That answer has satisfied neither local critics nor the State Board of Higher Education, which must approve the final sale.

UO President David Frohnmayer and UO Provost John Moseley have gotten testy about the skepticism. When members of the state board said they were disappointed that the university had failed to provide details — how to mitigate losses to tenants, and what the money will be used for — Frohnmayer replied that if they didn't trust his judgment, they could fire him. When the UO Senate voted unanimously against the proposed sale, both Moseley and Frohnmayer retorted that the decision is not subject to campus government.

Frohnmayer told The Register-Guard (1/23) that the $200,000 annual profit currently generated by the apartment complex falls short of the "cash flow necessary to be current and competitive." But university documents show that in addition to the operating profit, Westmoreland also produces about $336,000 annually for debt payments. Not on Westmoreland — the bonds on that complex, built in the '60s, have been fully repaid — but on other university properties such as the Spencer View apartments. In total, Westmoreland generates more than $500,000 annually after costs.

"They sold this as if Westmoreland was a cost burden, but the numbers suggest otherwise," said Rep. Robert Ackerman, who presented the figures at the Jan. 6 state board meeting. "The sale seems so unwise economically and socially that I have to think it is driven by something that hasn't yet been disclosed."

Critics have suggested that the proposal to sell Westmoreland may be connected to a proposed $180 million basketball arena on Franklin Boulevard, but UO officials deny any relationship between the two.

University administration put plans for the arena on hold in February 2004, citing financial roadblocks. But in December 2004, the state board granted the UO's request for $27.4 million in bonds to purchase the Williams' Bakery property and three adjoining parcels on Franklin, clearly stating that the preferred use of the property would be as a site for a new UO basketball arena.

The Legislative Fiscal Office recommended that the UO delay construction until it can report on how the arena would impact the university budget. "Essentially we recommended that they provide details," said Legislative Fiscal Office Budget Analyst Steve Bender.

More than a year later, university administrators have secured the Williams' Bakery site but not the adjoining parcels. They have not yet provided the state with the requested fiscal details — and they don't have to, Bender said. In an unusual move, the University of Oregon Foundation created a nonprofit, National Championship Properties, that would own the arena and lease it to the UO. Because the arena wouldn't technically be a state-owned building, its records would not be public and the UO would not need state approval to construct it. Creating the nonprofit "certainly would have the effect of getting around that requirement," Bender said.

Asked whether the proceeds from the Westmoreland sale could be used to secure properties adjoining the Williams' Bakery site for a future arena, UO Associate Vice President for Public Affairs Michael Redding said that the two are completely unrelated. "There is, at this point, no basketball arena," he said.

Redding offered several specific ideas about how the university may spend the proceeds from the Westmoreland sale, marking a shift in the administration's approach after months of stonewalling. The university may pay off about $10 million in debt to the OUS, freeing up $1 million per year that could be used to upgrade and expand undergraduate residence halls, Redding said. In addition, the university may buy two parcels adjacent to the Williams' Bakery site on Franklin Boulevard: the Joe Romania car lot and the ODOT property.

But Redding deflected questions about whether those parcels could be used for, say, basketball arena parking. "There have been conversations about mixed use properties," Redding said. "In the short term, if we owned the Romania property it could be used for parking."

For Ackerman, that notion doesn't justify the Westmoreland sale. "Parking may be great, but not with assistance from the student housing system," he said.