The State Budget Committee postponed a vote Wednesday on a request by Indiana State University to enter a long-term lease with a private developer for a downtown student housing project.
Despite concerns expressed by ISU officials that the delay would threaten the project, committee members said the vote should wait at least another month until they get more detailed information on the project’s financing.
“If it’s really a good deal, it will still remain a good deal,” said state Sen. Luke Kenley, a Republican from Noblesville who chairs the committee.
ISU officials were hoping to get the needed approval from the committee to enter into what will be a $33 million lease agreement over 30 years with a private developer, Thompson Thrift, that wants to build a four-story retail/residential building in downtown Terre Haute.
The university wants to lease the top three floors of the building to use for student housing for upperclassmen and graduate students. The developer would lease the first floor for retail use.
ISU officials said they planned to pay about $1.05 million a year to lease the top floors of the building, which would have enough four-bedroom apartments to house 228 students.
Diann McKee, ISU’s vice president for business affairs, said the project makes sense for the university because it doesn’t have enough housing on campus for students, but also doesn’t have the expertise in putting together the kind of property deal that the downtown project would require.
She also said the project developer had options with property owners that expire Aug. 1, and expressed concerns about property owners who may back out of the deal if the university couldn’t secure approval by state and local officials to move forward by then.
But several state budget committee members, including Kenley, said the proposed agreement between ISU and the project developer was unusual and that they needed more time and information to review the deal.
“I’m not saying I’m opposed to the project, but we haven’t had enough time to review it,” said state Sen. Karen Tallian, a Democrat from Portage who argued for delaying the vote. “I feel like we’re being put over a barrel here.”
After the meeting, McKee said ISU will be back in front of the State Budget Committee in August to ask for the project’s approval again. “We’ll work with them to get them the information they need,” McKee said.
The ISU project was the only one not approved by the State Budget Committee out of more than $100 million in projects it considered Wednesday.
Later, McKee told the Tribune-Star that the project “has been part of our strategic plan since day one. We have been upfront about that” with state agencies.
The Commission for Higher Education did approve the project at its June meeting.
ISU found it beneficial to work with a developer because of the land acquisition issue. “We wanted a retail/residential mix product, and the university has no expertise in running retail operations,” McKee added.
The ISU bookstore has been operated by a third party for more than 20 years, and the university’s dining operation also is run by a third party, McKee said.
She recognizes that the long-term housing lease with a private developer “is a different kind of project than we normally take to the state.”
Paul Thrift, president of Thompson Thrift Development, could not immediately be reached Wednesday for comment.
Maureen Hayden covers the Statehouse for CNHI, the Tribune-Star’s parent company. She can be reached at email@example.com.
Staff report Sue Loughlin contributed to this report.