Leaders of Pennsylvania's 14 state universities have authorized $34 million in debt to complete a partially built sports and convention center at Indiana University of Pennsylvania that remains tens of millions of dollars short in fundraising.

Campus President Tony Atwater said the State System of Higher Education's decision to approve bond financing for the nearly $80 million project was "very good news" for IUP and the surrounding community.

The development will have a 4,000- to 6,000-seat arena and is named for the Kovalchick family of Indiana, who gave $2 million toward the development being built next to the university.

But some on campus, noting the bonds may have to be paid off with university operating funds, questioned why officials let a project with at least 40 percent of its funding not yet identified break ground in November 2008 amid a worsening economy.

"Folks, to quote a friend of mine, to get out of a hole, the first rule is to stop digging," Robert Mutchnick, an IUP professor and president of the faculty union's campus chapter, wrote in a campus e-mail.

In an interview Friday, he warned that a university already stressed by the recession could be on the hook for $2 million a year in debt service payments, on top of $800,000 in annual building operating costs, if fundraising for the project does not pick up. "They are mortgaging the future of the university," he said.

Early on, the state pledged about $21 million toward the Kovalchick Convention and Athletic Complex. The rest of the construction was to be paid for by IUP through its foundation, officials said.

But with only $15 million in hand as of December, campus officials said they had begun exploring other unspecified ways to find the roughly $32 million still needed for the complex. It is expected to be substantially complete in December.

Michelle Fryling, an IUP spokeswoman, said the university doesn't yet know what interest rates will be attached to the bonds. She said IUP respects Dr. Mutchnick's opinion but disagrees with his criticisms of the project.

She said IUP remains optimistic about fundraising and said the center will provide hundreds of millions of dollars in economic growth for surrounding communities and enhance the campus. She said a separately financed hotel will be built next to the development.

"It gives us the opportunity to bring in performing arts and events that enrich the academic experience of our students," she said.

The financing will occur over 25 years, officials said. Documents prepared for the State System board of governors' vote Thursday to approve the financing said the recession's impact on philanthropy made it necessary "to bridge the gap in fundraising and meet the cash flow required for project construction."

Kenn Marshall, a State System spokesman, said it's not unusual for the system to finance campus projects, and he noted the Kovalchick financing was part of $143 million in bonds approved Thursday. He and others could not say whether the funding shortfall's magnitude was unusual for a project nearing completion.

State Rep. Dave Reed, R-Indiana, said there was never any intention to issue bonds for the Kovalchick, whose early planning dating back to the mid-1990s was long before the recession. Saying the foundation overestimated what it could raise, he said the financing had become necessary.

But it's not the good news some on campus are calling it.

"The building is three-quarters of the way built," he said. "I don't think you can just leave it there."

The State System says IUP expects that debt service will be handled "with annual gift receipts and backed with operating funds for any shortfalls."

Officials said some of the $15 million raised may not be available when bills come due because some of the commitments are "amortized over time or in the form of a bequest."

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