Brenau University is prepared to move forward with $8 million in campus construction projects after the Gainesville and Hall County Development Authority on Monday approved issuing revenue bonds to pay for the developments.
Brenau will demolish and rebuild four sorority row houses on Prior Street; construct a 72-bed, three-story residence hall in the same area; build an anatomy lab to support nursing, occupational and physical therapy programs; and construct a field house at the university’s burgeoning athletics complex on Jesse Jewell Parkway.
Demolition of the existing sorority houses should be complete by the end of June, according to David Barnett, senior vice president for administration. And a January or February 2015 timeline has been set for completing construction of the new homes.
Construction of the anatomy lab, meanwhile, is scheduled for completion by December, and the residence hall is expected to open between August and December 2015.
“During the construction phase, it will provide opportunities for local contractors and local employees to work on a project that’s significant in size over a period of two years,” Barnett said.
The university Board of Trustees approved the construction projects and financing in late March.
BB&T bank is buying the bonds and Brenau, which is ponying up its assets as collateral, will pay them off with revenue generated from the new developments. No tax dollars are involved in the private university’s project.
The 26-year bond can be called in seven years, at which time Brenau can sell it to another bank, if necessary.
The bonds are tax-exempt and Brenau will pay an interest rate of 3.04 percent, the motivating factor in financing the projects through revenue bonds.
“For institutions that are nonprofit, it provides an opportunity for them to do projects at a cost for capital that otherwise they might not be able to do,” Barnett said.
He added that conventional loan programs typically have higher interest rates, meaning the costs of capital would likely reduce the size of projects.
The same is true, Barnett said, if the university dipped into its operational expenses to pay for the projects.
The Development Authority — a partnership between Gainesville, Hall County and the Greater Hall Chamber of Commerce that works to attract new businesses and expand existing private industry, often using its power to issue bonds to finance construction projects — has no financial obligation.
Development Authority officials said a bond validation hearing in Hall County Superior Court will be held in the coming weeks, a final formality before the bonds can be issued.
Barnett said he hopes the projects will enhance the university’s campus life and ultimately spur new growth in the city’s downtown core.
“Anything we can do to solidify the resident population brings activity to the Gainesville community that otherwise wouldn’t be present,” he added.
Gainesville Mayor Danny Dunagan, a member of the Development Authority, said he expects the projects to boost the city and the university.
“I think it’s going to bring a lot to the city,” he said. “It’s going to raise Brenau to the next level.”