Chancellor OKs Westmoreland sale.

Byline: Greg Bolt The Register-Guard

The proposed sale of the University of Oregon's Westmoreland student housing project has a green light from the chancellor of the Oregon University System, who is recommending that the state higher education board approve the $18.5 million deal.

The evaluation by Chancellor George Pernsteiner will be taken up at the board's meeting next week in Portland. If the board approves, the sale to Eugene real estate broker Michael O'Connell Sr. will close on Aug. 31.

Pernsteiner, who conducted two public hearings in Eugene last month in which dozens spoke against the sale, concluded that despite community objections, the proposed deal is justifiable. He acknowledged that others might see the issue differently but said the sale is within UO President Dave Frohnmayer's authority and will benefit the university.

"The president of the University of Oregon has made a proposal that, despite criticism from many on campus and in the community, has merit," Pernsteiner said in a staff report to the board. "It might not be the same proposal that community leaders, the chancellor or members of the board might make; however, it is a well-conceived proposal and one that fits with a long-term vision of the university and its future."

Frohnmayer proposed selling the 404-unit apartment complex last October, touching off a wave of objections from students, faculty and state legislators. But he has stood by the decision, saying the realities of higher education funding make it imperative that the university get the most value from all of its investments.

Opponents remain unconvinced. Brett Rowlett, a student body senator fighting the sale, said he doesn't understand why Pernsteiner or the OUS board would go along with a sale that has generated so many objections.

"I would say students definitely feel frustrated at the fact we have shown campus and community opposition to the sale," he said. "It leaves us wondering why the Oregon University System that is supposed to work for the people would recommend something it was obvious the community in Eugene opposes."

Rowlett said student government, the UO Senate, several state legislators, Eugene neighborhood groups and area housing organizations have questioned or opposed the sale. He said students plan to make a last-ditch appeal to the board next week and said one community organi- zation is exploring the possibility of legal action if the sale goes forward.

By selling Westmoreland, which Frohnmayer has said needs too many repairs and is too far from campus, the UO will be able to accomplish several goals.

It would pay off $10 million in pooled debt owed to the OUS that was used to finance student housing around the state but little at the UO; it would purchase the former Romania car lot east of campus for $5 million from the UO Foundation; and it may use remaining funds to purchase state highway department property that also lies in the east campus area.

That would free up annual debt payments of approximately $1.5 million, which would allow the university to issue new bonds of approximately $20 million to finance student housing projects, such as the renovation of the aging residence halls on campus or construction of new housing closer to campus.

Also, the east campus property would allow the university to be a player in new mixed-use projects in a part of town that soon could see significant redevelopment. The UO hopes to build a new basketball arena on the Williams' Bakery site and an alumni center nearby. With the coming of a bus rapid transit line along Franklin Boulevard and what is being called the Walnut Station nodal development plan, the east campus property could be developed to create a substantial revenue stream for the university.

But that has prompted opponents to charge that the university is insensitive to the needs of students with families and nontraditional students, who typically don't use on-campus housing. They say Westmoreland not only offers very low rents but also has a community atmosphere that helps attract top graduate students and provides a welcoming environment for nontraditional students and students with families.

"From the beginning, the university has given different plans on what they would like to use the money for, but they haven't explained why it is absolutely necessary to eliminate 50 percent of the family housing at the university," Rowlett said. "There are other ways to pay for what the university wants to do. They're taking an easy way out to move forward on some projects that in the long term benefit the administration more than the students."

O'Connell has said he plans to keep rents low at Westmoreland but that increases of 10 percent to 12 percent - about $50 a month - will be needed. He also plans to put $1 million into refurbishments and hopes to have a day care center on site.

In addition, the UO expects to spend $500,000 from the Westmoreland proceeds to help students affected by the sale.

The university is pledging to cover any rent increases through 2008 for students who stay at Westmoreland, pay $150 to help with moving expenses for students who moved after the sale proposal was announced last year and waive the $100 move-out fee. Room is available in other university housing for all remaining Westmoreland student families who want to move. An addition to the Vivian Olum Child Development Center will provide space for children who had attended the day care center at Westmoreland.

Pernsteiner said the UO's efforts to help current and former Westmoreland residents, the relatively high vacancy rate in other university-owned family housing and the opportunity to make low-cost housing at Westmoreland available to the community at large convinced him that the sale has merit. And the new owner wants students to stay, so the atmosphere they value there won't be lost.

"Because they can stay there, it appeared that the community could remain intact for as long as the residents wish it to," he said.

In his report, Pernsteiner also addressed most of the other arguments opponents have raised to the sale. He said seeking donor support for housing is questionable and said with a total annual net income of $2 million, the UO housing department can handle the loss of $578,000 a year net from Westmoreland.

Also, Pernsteiner's report said that needed plumbing and sewer upgrades, computer connections and other repairs would exhaust housing's reserve funds and probably result in higher rents if the university kept the complex.