Southeast Arkansas College board members Thursday approved a payment of more than $1.9 million in costs associated with a project to construct a student union and residential center.
The project is being operated as two separate transactions, one for the residential center — the immediate focus of the college — and the other the student union. College officials are looking at the addition to the campus as a way to attract students whose educational paths are otherwise disrupted by a lack of housing or transportation.
“Normally, these costs would be paid at closing, but because we are still working on finalizing the transaction, there were some things outstanding like, for example, the architectural fees for the working drawings for both buildings,” SEARK President Steven Bloomberg said. “There are some geotechnical site studies done, some soil composition site studies done, attorney fees … things associated with construction.”
The student union and residential center have an estimated price tag of $37 to $39 million. Given an estimate from Dee Brown, CEO of development firm The P3 Group, SEARK officials expect to close on the housing transaction within 45 to 60 days, Bloomberg said.
“There will be some other costs we pay at closing, but essentially, this is everything we will pay at this point,” Bloomberg said, adding SEARK will have to pay the remainder of the loan and projects.
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Bloomberg said he didn’t have the final closing statement yet, but he anticipates it to be in the neighborhood of $1 million. The residential hall will be built for 158 units to house two people each.
Focusing on the student housing first makes for a little easier project, Bloomberg said.
“If we get the student housing up, we can start advertising and getting the students in there,” he added. “The student center is important to that, but if we can get housing, we can start getting students in there and building occupancy.”
That would lead to additional revenue through housing and through tuition and fees, Bloomberg said. The college board voted for a $12-per-credit-hour increase in tuition and fees in May, the first increase in five years, according to Bloomberg.
“We always want to be a good investment, but at the same time, you get to a point where your costs are rising, too,” Bloomberg said.
Partners Bank of Helena-West Helena has taken the lead on financing on the student housing side. Brown is also looking at other banks to assist with financing, Bloomberg said.
Citing information from Brown, Bloomberg said the housing hall is being privatized and The P3 Group will be responsible for financing so that SEARK will not bear any liability. Bloomberg said that bit of news “is exciting for us.”
SEARK plans to sell 20-year bonds for the student center, the president added.
“The bond side is a little bit different because it offers a little more flexibility as far as the investors who buy those bonds,” Bloomberg said.