High-Price Housing

After receiving a blistering critique of their $178 million residence-hall proposal at the Arizona Board of Regents meeting in January, UA officials significantly revised the project.

Those revisions mean students will continue to live in 61-year old Hopi Lodge, even though campus administrators label the building “deteriorated and outdated.”

To meet the growing demand for on-campus student housing, the regents last summer approved $185 million for the UA to demolish and replace the single-story Hopi Lodge and build two new multi-story dorms on Sixth Street. One of these would be constructed at Tyndall Avenue, the other at Highland Avenue.

By the regents’ meeting in January, the proposal had dropped $7 million in price. The Tyndall dorm was to contain about 650 beds; the one at Highland would contain 350, and the existing 119-bed Hopi Lodge would become a new, 198-bed building. The projects will cost $455 per square foot–and the finished price per bed was more than $150,000.

Joel Valdez, UA senior vice president for business affairs, explains: “Project costs include a lot more than the dorm rooms. It’s like trying to build in downtown Manhattan. There are a lot of headaches.”

That argument didn’t sway Regent Anne Mariucci. Calling the proposal “unprecedented,” she tore into it at the January meeting. Citing concerns over both the cost of the project as well as its value compared to existing dorms, Mariucci wondered: “How much do we want to subsidize rents in a first-class facility?”

Indicating that taxpayers live in units built for about half the cost of the proposed dorms, Mariucci added: “What’s good enough for the taxpayers to live in is good enough for students.”

Despite those objections, Mariucci was alone in voting against the Sixth Street project. But her complaints carried some weight.

“There was a lot of discussion by the regents about the cost,” reflected Jaime Gutierrez, UA associate vice president for community relations, a few weeks ago. “Some of them said, ‘It’s too much.'”

To maximize the project’s density while reducing its cost, it was revised to increase the height of some of the 4-to 6-story buildings. Estimated to now run less than $160 million, the project is slated to include a 695-bed facility on Tyndall Avenue, while another 375-bed dorm will be built at Highland.

While this change has lowered the overall price and decreased the per-bed cost by a few thousand dollars, it has also eliminated the replacement of Hopi Lodge.

When it opened in the fall of 1947, this building was one of three new residential units on campus. More than 360 beds were added then, at a cost of about $625,000–approximately $1,730 a bed.

Even though Hopi Lodge will remain standing for the time being, according to Jim Van Arsdel, director of residence life and university housing, it will receive renovations this summer. “We’ll spruce it up,” Van Arsdel said, “but it will still be Hopi Lodge.”

That is one reason why individual rents for the coming school year at Hopi will be the lowest on campus, at $4,564 in a two-bed room. Top-of-the-line space elsewhere goes for about $900 a year more.

Van Arsdel indicated that earlier projections estimated boarding at the new Sixth Street dorms would run about $6,600 a year when they open, an amount sufficient to cover the construction-debt service. But he now expects that price to come down with the proposed changes.

For her part, Mariucci said at the regents’ meeting, “We’re building a Ritz-Carlton and charging Motel 6 prices.” She proposed looking at a differential rate structure for dorm rooms.

Mariucci didn’t respond to phone calls seeking comment on the latest UA proposal. However, Van Arsdel said school officials are reviewing future dorm rates.

“We’re beginning the process to do that, but it will take awhile. … It deserves plenty of student input,” he said.

Mariucci also questioned why the private sector wasn’t involved with the Sixth Street project. Several years ago, the university did work with a private developer to build and own the $21 million graduate-student housing complex named La Aldea on Euclid Avenue. But the 325-bed project soon ran into problems, and the university acquired it in 2005.

According to Valdez, that doesn’t mean the private-sector option is permanently ruled out. But he stressed it is too late for that to happen with the Sixth Street project.

“No one can borrow at rates lower than the UA,” Valdez said of project financing. In addition, he added that private-sector developers would have to build to university standards, which include constructing dorms that will last up to 50 years or more.

Despite those hurdles, Valdez said the possibility of a privately built dorm is now being explored for the north side of campus.

Even though the Regents are meeting in Tucson on April 24 and 25, an update on the 6th Street dorm proposal won’t be given to them until sometime this summer.

If the project proceeds as scheduled, the Highland building should be under construction by November with an opening date planned for August 2010. Work on the Tyndall Avenue dorm is expected to begin in January and be finished two years later.

This article appears in Apr 24-30, 2008.