After successful completion of major five year plans, new york city school construction authority and cuny look to the future

Investments in public education infrastructure have helped buoy the building industry by partially offsetting decreases in private sector construction spending. While the private sector continues to struggle, both the City University of New York (CUNY) and the New York City School Construction Authority (SCA) are in the midst of significant five year capital campaigns designed to build on the large capital programs of the 2000s.

A recent New York Building Congress Construction Outlook Update noted that in the twelve-month period ending April 31, the education sector accounted for a full 56% of all New York City construction starts or more than $4.5 billion dollars. The SCA and CUNY alone accounted for $3.8 billion of this work. However, there are warning signs that these types of forward-looking investment may be on the decline in coming years.

SCA
At the opening of the current school year, the SCA announced that it had created 17,000 new school seats in 26 new facilities. Both figures, which are records for the SCA, were funded primarily through its historic $13.1 billion 2005-2009 capital campaign.

In June, the City Council approved the SCA’s amendment to the Fiscal Year 2010-2014 Capital Plan, valued at almost $11.7 billion, increasing investment by $400 million over the original Plan. Work will be divided among several key categories, including:

• New construction and replacement of existing facilities: Valued at more than $5 billion, this money will fund the design and construction of more than 50 new school facilities and create more than 30,000 seats.
• Major capital improvements: Worth $2.1 billion, projects focus on major building systems, including exterior renovations to existing buildings, electrical upgrades and boiler replacements.
• Advanced technology: Throughout the school system, technology upgrades valued at $800 million are part of a major initiative to expand and diversify instruction using the internet and other advanced communication tools.
• Facility Enhancements: More than $800 million is dedicated to restructuring spaces and improving accessibility of buildings, as well as creating and upgrading science labs, physical fitness spaces, libraries and auditoriums. 

Although New York Construction reported this month that other school districts in the region were cutting back on capital spending after completing major capital campaigns, funding for the SCA’s 2010-2014 campaign continues at the robust pace of the mid-2000s.  While changes in City and State finances may affect future capital planning, the City has expressed confidence that the State’s contribution is firm through 2014.

A key reason for the size of the two most recent Capital Plans is the Campaign for Fiscal Equity lawsuit against the State of New York which, in 2004, resulted in a court-ordered mandate that the State provide more than $9 billion in capital funding to New York City schools. This mandate will have been met at the end of the current capital program. However, the need for strong State support will continue after that mandate expires, so it is important for the building industry to continue making the case for educational investment with the incoming Governor and State legislators.

CUNY

The City University of New York continues unprecedented levels of investment in its program of new facility construction and rigorous maintenance.  Over the preceding five years, CUNY spent more than $1.7 billion in City and State bond proceeds.  Last year, CUNY requested $5.3 billion from the State and City for Fiscal Years 2010-11 through 2014-15.  This represents the balance of CUNY’s request from a capital campaign that began in Fiscal Year 2008-09.

In response, the State provided $284 million in additional senior college critical maintenance appropriations and $35 million in State appropriations to match City appropriations allocated to community colleges, mostly for critical maintenance work.  The City’s FY 2011 budget provided $57 million in new appropriations, of which $34 million went to community colleges.

Among the major ongoing construction projects funded under the Capital Plan are Phase I of the Advanced Science Research Center at City College, John Jay College’s Building Expansion project, the new Science Building at Lehman College, and the new Academic Building at Medgar Evers College.

CUNY has also successfully used alternative models to fund capital projects, particularly through public private partnerships. This has allowed CUNY to reduce its reliance on traditional funding sources. For example, the $131 million Hunter College School of Social Work now under construction in East Harlem is partly financed through a creative arrangement that leveraged the sale of the school’s current site on the Upper East Side to build a state-of-the-art facility in a new neighborhood that will benefit from a new academic center.

In addition, CUNY has initiated a program to provide residence halls for students on senior college campuses or at other accessible locations using the public private partnership model.  Each facility is self-supporting and no tuition or tax levy sources are used.

CUNY successfully added dormitory space at its Queens College campus and housing is being constructed adjacent to the new Hunter School of Social Work.   CUNY is also pursuing student housing on the College of Staten Island campus, and recently issued an RFP to solicit developers to provide a turnkey residence facility for students at Baruch, Hunter and John Jay Colleges.

However, the fiscal downturn which has hit local and State government appears finally to be affecting CUNY’s longer-term budgeting – slowing down the start of some new projects.  Unlike other government entities, CUNY did not receive any stimulus funds for its capital program and therefore relies on traditional State and City funding sources.

Major projects in the capital plan that are wholly or nearly construction ready but need additional funding include the new Academic Building One at New York City College of Technology, the replacement of the 100-year-old façade at LaGuardia Community College, future phases of Campus-wide Utility Upgrades at Bronx Community College, and renovations to Baruch College’s Field Building.

The funding picture for CUNY becomes increasingly cloudy as the State is forecasting another multi-billion dollar budget hole next year, while the City’s approved 2011 Capital Plan forecasts no additional capital commitments for CUNY in 2012.  The building industry must be prepared to lobby State and City elected officials aggressively to ensure CUNY benefits from the capital funding it needs.

WHAT YOU CAN DO:

Contact the following elected officials to urge the State and the City ensure new allocations necessary to fund CUNY’s $8 billion capital campaign originally proposed in 2008-2009:

Mayor Michael Bloomberg

Assembly Speaker Sheldon Silver

Senate Democratic Conference Leader John Sampson

Attend the Building Congress Public Building Committee October 27 with Acting SCA President Lorraine Grillo at the New York Building Congress. For more info, click here.