Although projected costs have increased by about 30 percent in the past several months, construction on the graduate student housing complex, San Clemente, will commence within the next few weeks.
The original estimate of $116 million for the project rose by $37 million due to delays in gaining the California Coastal Commission’s (CCC) approval for the construction and because of unforeseen costs caused by Hurricane Katrina, said Chuck Haines, resource planning coordinator for Housing and Residential Services (H&RS).
With costs now totaling $153 million, the San Clemente Apartments complex will enter construction along the north side of El Colegio Road, adjacent to the university, said Gale Morrison, acting dean of the Graduate Division.
Haines said the CCC delayed approval for the project this past year, saying it needed more time to review the plans. He said Hurricane Katrina added to the overall costs of the project because the demand for building supplies greatly increased after the natural disaster.
“The most recent increases are attributed to reconstruction needs following the Katrina disaster and a general worldwide demand for raw materials used in building construction,” Morrison said.
When the University of California builds housing, Haines said, it sells a bond on the market with a fixed rate of return. Assuming that UCSB will have 100-percent enrollment and enough students to fill all current and new housing, the university uses the entire housing system to back up the bond.
Financial planning for the San Clemente project began in 1997 when H&RS approached the Residence Hall Association (RHA) with two options for paying off the debt that would be incurred from the project, Haines said. Student housing costs could either dramatically increase the year the building came online – meaning when the construction actually began – or the debt could be spread over a number of years until 2009.
Haines said RHA chose the gradual rate increase, beginning in the 1998-99 school year.
“They were pretty forward-thinking students,” Haines said.
The San Clemente Graduate Student Housing project is part of a $380-million building program in the 1990 UCSB Long Range Development Plan, which included financing for building Manzanita Village, renovations to De la Guerra Dining Commons, and the Sierra Madre Family Housing project, Haines said. He said the project has temporarily been pushed aside, and all the funds originally dedicated to it will go toward additional costs accrued by the San Clemente project.
Recently, Haines said, the UC implemented a new plan for financing housing projects. Now, housing projects will be financed through “third-party projects.” Through this system, the university owns the land but leases it out to a commercial developer who plans and builds the structure, and thus takes on all of the costs involved. The commercial developer manages the building, with strict oversight from the university.
Although it does not apply to San Clemente’s financial planning, Haines said any future housing projects – such as the Sierra Madre project – will be funded through this system.
San Clemente will have 976 spaces for graduate students and should be completed in Fall 2007, with renting beginning in the winter of 2008, Morrison said.
Morrison said only graduate students will be allowed to use the housing project. However, if graduate students did not use the 976 parking spaces available, those spots would be open to use by undergraduates.
She said the project began as a way to help graduate students with the costs associated with attending UCSB.
“Graduate students are an extremely important part of our university community and contribute to the University’s status as a top-tier research university,” Morrison said. “In order to attract the very best students, we need to make sure the cost of living is reasonable for them.”