Gov. Lee budget includes no funding for proposed $57.68 million expansion of UTC’s Rollins School of Business

Staff Photo by Robin Rudd /  Tennessee higher education officials are proposing a major $57.68 million addition and renovation proposal for the University of Tennessee at Chattanooga's Fletcher Hall, seen Tuesday, where the school's Rollins College of Business is located.
Staff Photo by Robin Rudd / Tennessee higher education officials are proposing a major $57.68 million addition and renovation proposal for the University of Tennessee at Chattanooga's Fletcher Hall, seen Tuesday, where the school's Rollins College of Business is located.


NASHVILLE -- It was the University of Tennessee System's top building project request in the state budget as well as state higher education's No. 2 ask.

But Gov. Bill Lee's proposed $55.6 billion spending plan for fiscal year 2023-24 makes no mention of a $57.68 million state appropriation for the proposed renovation and addition for the University of Tennessee at Chattanooga's Rollins College of Business.

The total project is $87.68 million, with Gary W. Rollins, the vice chairman and CEO of the company that runs Orkin Pest Control, among other companies, having agreed to give $30 million in his second major donation to the university, where he obtained his business degree from UTC's predecessor, the University of Chattanooga, in 1967.

The UTC project is not the only one being left out.

Lee didn't include any of the Tennessee Higher Education Commission's new major capital project recommendations for four-year universities in his proposed capital building project list. He did, however, recommend lawmakers approve $51 million to cover rising inflation costs at two state universities in Middle Tennessee.

However, Lee, who prior to becoming governor was president and CEO of a family-owned home services and construction company, is recommending lawmakers plow nearly $1 billion into one area: the state's 24 Tennessee Colleges of Applied Technologies, which offer technical training geared to employers' needs.

The list includes $386.17 million for new buildings, additions and improvements as well as $370.75 million for replacement campuses for seven outdated facilities and $147.5 million for six new campus locations with a goal of training 10,000 new workers annually.

"The governor and General Assembly have generously funded higher education over the past four years, and this year, we have the opportunity to prepare Tennessee's workforce for the future with an historic $1 billion investment in our state's colleges of applied technology," Lee Press Secretary Jade Byers said in an email to the Chattanooga Times Free Press.

Byers added that the "pathways to success look different for every Tennessean, and this record funding will complete the TCAT master plan to ensure 10,000 new workers per year can skill up with the tools needed to secure a high-paying job and provide for their families while accommodating the state's continued growth."

Last year, Lee won approval for some $900 million for higher education building projects and renovations, many of them targeting four-year schools, including $60.8 million for a new UTC health science building for the university's School of Nursing. The state is picking up $55.93 million of the tab on that, with remaining funds coming from university sources and/or donor gifts.

Some senior members of the Hamilton County legislative delegation last week told the Times Free Press during in-person or phone interviews that they believe UTC should focus on the health science building at this juncture, with other concerns being galloping cost increases in current state building projects.

UT President Boyd: $30 million donor commitment for UTC

As the House Finance Committee began digging into the higher education portion of the budget last week, University of Tennessee System President Randy Boyd told Chairwoman Patsy Hazlewood, R-Signal Mountain, and other committee members that "No. 1 on our list" was the new business building at UTC.

"We have a donor that's going to donate $30 million for that building," Boyd said, alluding to Rollins.

Rollins in 2018 gave UTC $40 million to help overhaul Fletcher Hall, the home of its business college, fund a $10 million scholarship program and provide a second business college facility. UTC envisions more work with an additional building.

"It's going to be a challenge for us," Boyd told Finance Committee members. "It's great when we get those kind of commitments, but donors kind of expect to have a match. That's going to be a challenge for us with that one. I don't need probably to belabor this, but business is a high-demand degree."

Hazlewood cited current inflation problems as well as other challenges in processes referenced by a prior presenter she said are leading to cost overruns on projects.

"Are there any ideas? Are there states out there that have invented a wheel that works better, that we might copy?" Hazlewood asked. "Because it does seem we have a long time, even if the project is funded that is just the beginning. That is the starting pistol for a very long race to the end when we can ribbon cut the project and put students in the building."

Boyd said officials have studied other states, and each one does things differently. He noted the House and Senate speakers have introduced a bill seeking to modernize operations of the State Building Commission that will "greatly speed up our ability" to deliver projects on time and on budget. For example, all projects with costs of $250,000 or more now go through the SBC process, he said. Among other things, the bill would exclude projects under $1 million.

Another plan is to allow a university to avoid going through the State Building Commission process if it has a donor or institutional funds to build an auxiliary building, residence hall or athletic facility and isn't using the state to borrow money. Yet another issue, Boyd said, is a disclosed projects list requirement that sometimes can add up to a year to the process.

The bill sponsored by the speakers, who served on the State Building Commission, says that institutions with governor-appointed boards that approve the project can go directly to the commission, shaving off yet more time. Other steps are being contemplated as well, Boyd said.

"Those sound like small things, but they have a dramatic impact on our ability to deliver projects on budget and on time," added Boyd, a successful businessman who served as then-Gov. Bill Haslam's economic and community developer prior to becoming UT System president.

Hazlewood said in a later phone interview that it remains possible approval would come, but that lawmakers do have concerns about inflation and other factors leading to accelerating expenses.

Other local lawmakers weigh in

Senate Finance Committee Chairman Bo Watson, R-Hixson, said in an interview at the Capitol that "I think UTC's first priority should be making sure they have the funding for their nursing school, which we put in $62 million last year.

"If you take into account cost increases on construction, $62 million may not be enough to do the project," Watson said. "They need to go back and make sure we've adequately funded that project before they start planning on another project. I do realize that they have a benefactor out there that wants to make a sizable contribution to the school."

But, added Watson, a physical therapist and director of sports medicine and therapy services at Parkridge Medical Center, "I would just say we have not heard a lot of discussion here in the job market about not having enough MBAs (Master of Business Administration). But we have heard a lot of discussion about not having enough nurses and other health care practitioners.

"So the focus needs to be on higher education in helping us supply the employees that we need and the job places where we have deficiencies," Watson said.

CBRE, the global commercial real estate services and investment firm, forecast a 14.1 percent year-over-year increase in U.S. construction costs in 2022 due to a litany of pressures, including labor shortages, inflation, supply chain disruptions, ongoing pandemic reverberations and the war in Ukraine. The company dialed back on cost increases in its 2023 forecast to 4.3% and 2.9% in 2024.

Sen. Todd Gardenhire, R-Chattanooga, a UTC business graduate, called the university's proposal a "pretty good idea" as well as a "very generous offer" from Rollins to put in an additional $30 million on top of the $40 million he previously donated.

"But -- here's the but -- the governor and the legislature have done almost $3 billion in capital (projects) to higher education, and some of these projects, as an example, like the new health center, haven't even been started," Gardenhire said. "And inflation has driven those costs up. This is a tacky statement, but it's a true statement, higher education is famous in my opinion ... they come with a grandiose and a great idea on a building and give it a price, and lo and behold, every year they come back and go, 'Oh, oh, God, inflation has driven it up. We need another $50 million.' But they reel us in with unrealistic amounts that we need to fund a building project."

He said his preference is UTC focus on the health science building funded last year.

Otherwise, the senator said, "If they have to come back -- and I'll make you a bet they will and say we need more money -- then what do we do? We've committed to another $58 million or whatever it is for the addition to the business school.

"I'm sure the delegation would be very glad to meet with Mr. Rollins and explain our position and see if there is a way to work it out.

"Believe me," Gardenhire added, "when a guy comes along and says I'm going to give you another $30 million on top of the $40 million, you don't want to disappoint him."

Contact Andy Sher at asher@timesfreepress.com.

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