UNLV building project has shot at funding, even in budget crunch

By Charlotte Hsu

Saturday, May 17, 2008 | 2 a.m.

The state’s financial crisis may not squash UNLV officials’ chances of getting money in the next biennium for their most important construction project — a new academic building for the hotel administration college that would sit alongside a privately funded hotel and conference center on campus.

The Harrah’s Foundation has put up $25 million for the building, contingent upon the school’s securing another $25 million by the end of next year.

The project is No. 6 on a draft list of capital improvements the Nevada System of Higher Education will ask the state to fund. The five projects with priority over the hotel college facility ring in at about $130 million in state money.

Though it seems like a tall order in a time of cutbacks, State Budget Director Andrew Clinger thinks the higher education system has a shot at getting money for its first six requests.

That’s because each biennium, the state uses bond money to pay for many of its capital improvement projects.

Bond money accounted for $520 million of a two-year, $811 million capital improvement budget lawmakers approved in 2007. Clinger said Nevada pays back this bond debt using property tax revenue, which he believes will hold steady even as the economy tanks.

Higher education’s construction budget was about $250 million in each of the past two legislative cycles, with public dollars accounting for the bulk of that money. In 2005-07, the state’s capital improvement budget was half of what it is this biennium.

Securing public financing for the Harrah’s facility would be a bright spot for UNLV in what looks to be an otherwise gruesome budget cycle.

“I am very hopeful that the hotel administration (building) will be funded, and ... there’s every reason to think that it will be,” said university system Executive Vice Chancellor Dan Klaich. “It’s a critical project to Southern Nevada ... We have a huge private match for the building, and so when I put all those things together, if I were a legislator, all those things would be very important to me.”

The university will benefit from having the politically well-connected Harrah’s lobbying by its side.

Still, there’s no guarantee of getting public funding. The lack of a surplus will put a dent in the potential capital improvements budget. This biennium, money from the state’s general fund accounts for $195 million of the construction budget.

In September, after Harrah’s announced its gift, Assemblywoman Sheila Leslie, D-Reno, suggested that UNLV should “start working on Plan B.”

That is not happening. UNLV President David Ashley said administrators are not actively pursuing alternatives to public financing.

“We believe that the argument for this building is compelling ... This is a high-demand academic program that really serves some important state needs,” he said.

The hospitality complex in which the academic building would sit has yet to be built, but it is just one part of the hotel college dean’s vision for expanding UNLV’s hospitality program. He is looking to open a branch campus in the United Arab Emirates — without using public money from Nevada. The hotel college has a satellite in Singapore that is funded by that country’s government and tuition students pay at the Asian site.

With so much of the hospitality program’s planned growth relying on private or other outside dollars, UNLV officials view a state investment in the new academic building as vital. They say donors who partner with the university expect to see a public contribution too.

Still, if the state can’t meet the match, UNLV will have to find other ways to fill the hole. Donors could contribute to the building, but university officials have acknowledged that $25 million is a huge amount to raise in a relatively short period of time.

A memorandum of understanding between the university and Harrah’s gives the school until the end of 2009 to come up with funds. If that doesn’t happen, under the agreement UNLV would lose the gift.

“We’ll do all we can to try to preserve this match, but clearly the hope and plan and expectation is that the state will come through with this,” said Gerry Bomotti, senior vice president of finance and business at UNLV. “If they don’t, I really don’t know exactly what we’re going to do.”