UT System Board of Regents approves downtown administrative building

Alexa Ura

The UT System Board of Regents approved $102.4 million for a new administrative building slated for completion in 2016 that will consolidate its current five-building complex in downtown Austin.

The new 16-story administrative building will be built on the site of the System’s existing Lavaca and Colorado Buildings on Seventh Street and will have capacity for a parking garage for more than 650 vehicles.

During their regular meeting Wednesday, the regents unanimously voted to amend the 2013-2018 Capital Improvement Program, a long-term System plan to improve and maintain facilities, to allow construction of the new building.

The System projects the consolidation of its downtown offices will save between $2 million and $5 million annually that will be allocated to existing student success initiatives.

The building would encompass 258,500 square feet for System offices, meeting space and a central eating space. Scott Kelley, executive vice chancellor for business affairs, said 60,000 square feet of the building will be available for lease or for further expansion of System operations.

During the meeting, regent Robert Stillwell said funding System institutions should be the board’s first priority and said he was concerned about spending money internally while asking campuses to tighten budgets.

“I would not feel comfortable, or we should be concerned, about approving stuff for ourselves in the System while not for campuses,” Stillwell said. “Let’s be careful and thoughtful of where we spend.”

Stillwell said he supports the new administrative building, but he would have preferred to review the proposal for the new building after deciding on funding requests from various campuses.

He eventually voted in support of the new administrative building.

Kelley said the System would spend between $4 million and $8 million annually in maintenance costs for existing buildings if the new building plan was not implemented.

“It’s a clearly fiscally responsible response to our space utilization needs,” Kelley said. “I can tell you with great confidence that this activity will save the System money.”

The System will issue debt through its revenue financing system to pay for the building, Kelley said. The System will eventually repay the debt through the Available University Fund, which includes funds from a state land endowment, and with income from office space leases.

The System plans to vacate and lease its three remaining buildings, Ashbel Smith Hall, O. Henry Hall and Claudia Taylor Johnson Hall when the new building is complete.

Kelley said the System hopes the University of Texas Investment Management Company, the System’s nonprofit investment company, will lease office space in the building.

Chancellor Francisco Cigarroa said discussions for the new administrative building have been taking place for more than a year and the idea was part of an organizational review he completed in 2009.

“Every year the deferred maintenance cost continues to increase,” Cigarroa said. “This will be a real cost-saving and will provide dollars that can be reinvested in line with the productivity and efficiency goals in the [Framework for Advancing Excellence].”

Adopted in 2011, the Framework for Advancing Excellence is Cigarroa’s long-term plan to improve System institutions.

Kelley said the Facilities Planning and Construction Committee will move forward with a design development to be presented to the regents in early 2013 and will begin demolition next fall. During demolition of the two buildings where the new facility will be constructed, staff will work in the remaining three buildings.