Carnegie Mellon and Duquesne universities are on track to finance major construction projects through bonds issued by Allegheny County's Higher Education Building Authority.
County council's economic development committee has recommended approval of the borrowing, and final action by council is expected today.
Carnegie Mellon plans to sell up to $66 million in bonds through the authority to construct a 105,000-square-foot research building to be called Sherman and Joyce Bowie Scott Hall. The structure will be built between Hammerschlag and Wean halls on the CMU campus. Scott Hall will be home to departments doing research in nanotechnology, biomedical engineering and energy innovation.
CMU treasurer Jay Calhoun, who represented the university at the committee meeting, estimated the project would cost about $95 million. About $60 million would be borrowed.
By issuing bonds through the county's higher-education authority, CMU's borrowing costs will be lower because the interest paid to buyers will be tax-free. Responsibility for paying off the bonds remains with Carnegie Mellon and the county has no liability, council members were told.
The authority can issue such bonds if they "benefit the health and welfare of the citizens" of the county.
The bonds are likely to offer a 3.5 percent interest rate and have a term of between 20 and 30 years, Mr. Calhoun said.
The county's Department of Economic Development, which oversees the authority, will receive an upfront payment of $57,000 and annual payments of $16,500.
Duquesne is looking to borrow $17.1 million through the authority for renovations at two residence halls and a classroom and administration building.
Dave Grousosky, an associate vice president at the university, said the money would be used to make improvements at St. Ann Hall, Duquesne Towers and Liebermann Hall, an eight-story academic building at Fifth Avenue and Ross Street. Liebermann had formerly been part of Robert Morris University's Downtown campus.
The project represents phase two of a campus housing renewal plan, Mr, Grousosky said. Work will get under way in May when most students leave for the summer.
The county authority will collect a $25,000 upfront fee and $4,275 annually for issuing the Duquesne bonds.
Councilwoman Amanda Green Hawkins, who is head of the economic development committee, asked about participation by minority and woman-owned firms in both projects.
Duquesne has a goal of 15 percent of contracts going to minority firms and 5 percent going to women-owned businesses, Darnell Moses said. He oversees the authorities division of the county's economic development department.
Mr. Calhoun told council that CMU already had hired two minority- or woman-owned firms for the Scott Hall project. The Yuba Group was the financial adviser, and McElwee and Quinn provided financial printing services.
Len Barcousky: firstname.lastname@example.org or 412-263-1159.