Board authorizes issuance of bonds for series of construction projects
KALAMAZOO—At its June 12 meeting, the Western Michigan University Board of Trustees authorized the administration to issue two series of bonds, each series not to exceed $72 million—for approximately $144 million in proceeds—to be used for future and ongoing campus construction.
The board approved one resolution authorizing issuance of special obligation lease rental revenue bonds to finance a portion of the renovation costs for a building donated to WMU in late 2011 to be the home of the Western Michigan University School of Medicine. Located at 300 Portage St. in Kalamazoo and now known as the medical school's W.E. Upjohn Campus, the renovation began last fall and is slated for completion in summer 2014, just in time for the school's first class of medical students.
When the nearly $70 million renovation project is completed, the improved building and its contents will be leased by the School of Medicine from the University in a long-term lease agreement. The principal and the interest on these bonds will be payable from and secured by the rental payments received from the School of Medicine. The special obligation lease rental revenue bonds may be issued as taxable rather than tax-exempt debt.
In a separate resolution, the board authorized the University administration to issue a series of tax-exempt 2013 general revenue bonds. This series of bonds will be used to finance a portion of the constructions costs for the Western View II residential housing complex on campus, a new main campus residence hall and renovation of East Hall into the WMU Alumni Center.
If market conditions are favorable, the new general revenue bonds may also be issued to refund some currently outstanding bonds, allowing the University to realize savings.
For both series of bonds, the president and the vice president for business and finance were authorized to negotiate, execute and deliver on behalf of the trustees, the borrowing that was recommended by bond counsel.