Durham County

The cost of NCCU’s new student union is soaring. The overrun is raising eyebrows

N.C. Central University, featuring a statue of founder James E. Shepard.
N.C. Central University, featuring a statue of founder James E. Shepard. rgronberg@heraldsun.com

What once was a $36.1 million plan to replace N.C. Central University’s student union is on its way to becoming a $47.3 million plan, a UNC system Board of Governors committee has learned.

Campus and system officials figure on covering the deficit by tapping what’s left of a $10.5 million repair and renovation reserve the N.C. General Assembly set up for NCCU in 2015.

The shuffle got an endorsement from the system board’s budget committee and from the full board last week. The next move’s up to the N.C. Office of State Budget and Management.

Support from the system budget panel wasn’t easy to get. Ultimately, it took an appeal from member Harry Smith, an East Carolina University alumnus, to overcome objections from fellow board members Tom Fetzer and Marty Kotis.

“This is an institution that’s been under-invested in, and there are others” in the UNC system in that same boat, Smith said. “We have to be creative. We have to use every tool we can to reinvest in campuses who have not had a fair start.”

Smith added that it’s likely UNC leaders will end up making a special budget request to the General Assembly to replenish N.C. Central’s repair reserve. Should that occur, the state in effect will wind up covering the deficit. Student fees otherwise pay for the project.

Kotis, a private-sector developer from Greensboro who specializes in restaurant and retail projects, argued officials should instead force N.C. Central to redesign the project. That would likely mean downsizing it.

“There are several layers where that [overrun] should’ve been caught before now,” he said.

The new student center is supposed to replace the Alfonso Elder Student Union, which dates from the late 1960s and was designed for NCCU’s then-enrollment of about 2,500 students.

The Durham campus now accommodates about 8,100 students a year and officials like Chancellor Johnson Akinleye think its annual enrollment can ultimately grow to about 10,000 students.

NCCU’s administration hired a well-known Durham architect, O’Brien/Atkins Associates, to lead the design process for the new student center. To build it, they’ll lean on the same construction company, Balfour Beatty, that’s built or renovated student unions at N.C. A&T State University, UNC Charlotte and Appalachian State University.

Once it got on board, O’Brien/Atkins “determined the original construction cost estimates were too low” thanks to inflationary pressures in the local construction market, system officials said.

The firm also added 3,870 square feet of floor space to the project’s original space allocation of 100,230 square feet. It felt the change necessary to ensure the building has “adequate functional and circulation areas,” officials said in a memo issued over the signature of Jonathan Pruitt, the system’s vice president for finance.

Given the latest per-square-foot cost estimates, simple math suggest the extra floor space by itself would have added about $1.8 million to the project’s cost.

Nationally, construction prices have risen about 9.9 percent since 2015, according to an index published by New York-based Turner Construction Co. That would have added about $3.8 million to the initial estimate.

That still leaves roughly $5.9 million of the increase estimate unexplained, the main possibilities being that construction prices locally are rising faster than the Turner Index suggests, that the methods used in setting the initial estimate were off or that NCCU simply lowballed the figures.

Kotis acknowledged that the inflation issue is real, as he’s seeing it in his own work, and homed in on the methodological one.

But the project’s history is tangled, and the building NCCU is in line to get isn’t necessarily the one campus officials wanted to build. Smith noted it had been through a couple of downsizings before the current modest expansion. Among the items cut earlier were plans for an auditorium.

System leaders have pressured NCCU and other campuses to cap the size of new student unions.

Officials at NCCU started the public push for their project about the time that Smith, then the budget committee’s chairman, was musing publicly about “right-sizing” the state university system. His 2015 comment was widely taken as alluding to the possible closure of at least one and possibly a few of the UNC system’s historically black campuses.

Smith has since reversed himself, and over the winter helped craft a plan to shore up the finances of Elizabeth City State University, once considered the mostly likely target of a closure decision.

For NCCU, getting the board’s original support for new student center last year wasn’t a given. Some members thought it should be sized for the school’s present, roughly 8,100-student enrollment, not for growth to 10,000 students. But they ultimately went along, agreeing with then-Chancellor Debra Saunders-White, who died last November, that the existing union harms the university’s recruiting of prospective students.

A former mayor of Raleigh, Fetzer was initially inclined to side with Kotis in opposing the budget increase, on the grounds approval would set a bad precedent. But he ultimately said he’d abstain pending a tour of the Durham campus.

He added that he agrees with Smith’s “concept of smoothing out resources so institutions that maybe haven’t had a full plate get a better helping in the future.”

That alluded to the perennial complaint that UNC’s smaller campuses — its historically black ones in particular — have a harder time than its flagships in securing finance and system support.

Budget committee Chairman Temple Sloan said Akinleye and board member Darrell Allison, a former NCCU trustee, had “been involved” in crafting the proposed solution to the deficit. He and Pruitt also pointed out that another possibility, sacking the designers and reworking the numbers, would likely delay the building’s completion beyond the target opening date of fall 2021.

Ray Gronberg: 919-419-6648, @rcgronberg