Coffman Union Financial Facts
The Coffman Union renovation cost $71.47 million. The funding sources for the Coffman renovation are: $11.5 million in cash from Coffman Union and tenant reserves $60 million in debt issued by the university to be repaid over 20 years by student fees and tenants.
This financing is being spread between students and tenants as follows:
- $48.6 million from student fees and Coffman student union reserves
- $22.9 million from tenants of the renovated facility (primarily rental fees)
While there were revisions to the budget during the renovation, due to the competitive construction market, changes to the scope of the project, and unanticipated expenses for abatement and structural integrity, the project met its final approved budget.
The university issued $60 million in debt to finance the Coffman renovation. All but $1.5 million of the debt will be repaid by students and tenants. The university is repaying the debt on $1.5 million of the bond to cover improvements to the exterior public spaces around Coffman. These funds are from central operations and maintenance funds.
The student fees to support the project are spread out over 20 years. In the 2002-03 school year the student fee to support the Coffman renovation is $98.42. For the remainder of the life of the bond the per student fee will be dependent on enrollment.
The project scope changes, the competitive construction market, and unanticipated structural deterioration and hazardous materials abatement combined to push the project budget from the original $50 million to $71.5 million.
Budget History and Background
In 1999, the board of regents approved a $50 million budget for the project that included $45 million for the base renovation (i.e. excluding build out for tenants) and $5 million as a placeholder for tenant build out. The university's first request for construction bids, based on this budget, had no response, reflecting the highly competitive construction market at the time.
The bid date was then extended for several months and three bids came in all of which significantly exceeded the budget and were thus rejected.
Following analysis of these bids, the University revised the scope of the project in September 2001 to generate additional tenant revenue by expanding the bookstore and adding commercial tenants, and reduce costs by simplifying the design and construction and eliminating some elements, such as a large atrium.
In addition to changing the scope of the project, the university also changed the project delivery method to design-build, a process whereby architects and builders work simultaneously, in order to keep the project moving toward timely completion.