BOG's approval of new FAMU housing bonds comes with strings attached

Last week the Florida Board of Governors (BOG) approved a resolution to allow Florida A&M University to seek $125 million in low cost federal funding from an HBCU loan program to build a new 700-bed residence hall and dining facility, restructure its current debt on FAMU Village, and borrow money for existing dorm maintenance.

If all goes well, the new dorms will open in the fall of 2020.

"FAMU will be providing its students with additional 21st-century living and learning spaces that they so richly deserve, " said FAMU President Larry Robinson.

BOG appears skeptical of FAMU's ability to manage construction projects

The BOG approval, however, comes with unprecedented conditions, never before placed on any Florida public university. The conditions likely signal the BOG's strong distrust in FAMU's ability to manage construction projects.

The BOG's growing frustrations with FAMU's handling of its construction most recently showed in some rather public and behind-the-scenes negotiations on the Center for Access and Student Success building, currently under construction in the parking lot between Gaither Gym and Gibbs Hall. These concerns prompted BOG Chancellor Marshall Criser to make an unannounced appearance at a FAMU Board of Trustees meeting in the fall where the project was being discussed.

The BOG concerns date back to the FAMU Division of Finance and Administration's mishandling of millions of dollars in construction money during the construction of Pharmacy Phase II which left the 72,000 sq ft new building with nearly 33,000 sq. ft of "shell space" that is unusable. The building had a ground breaking in 2010, however it did not open until last fall.

The BOG assistant chancellor for finance and facilities said "we are not usually involved in a university's (construction) project to this extent, however we will monitor this project both electrically and physically for the Board as needed." Some of the many conditions include:

• The University report on a monthly basis all aspects of the housing project, until BOG decides that this is no longer require 
• The University continues to pursue outsourcing its housing maintenance 
• The University submit to the BOG staff closeout reports of the end development phase of the project development. (Usually this is required at 50 & 100%, but has been accelerated to the 30%, 60%, and 100% marks) 
• The University may not transfer any money from the housing system for non-housing system purposes except for the housing systems’ reasonable portion of the university’s general overhead expenses until such time that all existing housing system maintenance issues have been addressed. (In the past, FAMU has used housing revenue to loan to its athletic program.) 
• The University continue to address it deferred maintenance needs in its housing system. 
• And, the University may not request any additional housing system debt or enter into any public private partnerships until the completion of the project and facilities conditions assessment is performed that indicates the university is making substantial progress on its housing system deferred maintenance back log. (This effectively shuts down the idea of a new football stadium for the foreseeable future) 

These added conditions are in addition to the normal conditions, such as the university establishing a robust performance bond requirement with the contractor to protect it should the contractor not deliver the project on time. This is fairly standard with housing projects, because students would need to be insured that they will be housed somewhere if their new rooms are not ready.

This housing project originally started out as a public private partnership proposal in 2016, but the financial model has now changed with this new opportunity to seek low interest loans from the U.S. Department of Education, HBCU Capital Finance program.

The general consensus among FAMU officials is that FAMU sorely needs to improve its housing stock in order to attract even higher achieving students and grow its enrollment.