Stark State College to spend more than $20 million acquired through two-year college enhancement program

Akron Beacon Journal, Tuesday, Aug 24, 2010

Stark State College is expanding its campus via a new state program that lowers construction costs. The college in Jackson Township is spending more than $20 million in two new academic buildings, new parking lots and renovations through an ”enhancement” program approved for two-year colleges by the General Assembly last year.

The new investment is the ”largest injection of capital into the campus at one time,” said Tom Chiappini, Stark State’s chief operating officer and treasurer.

”It’s a really good opportunity for the college and the perfect time, what with financial costs being low and construction costs being competitive,” he said.

This is the first time the rapidly growing two-year college has borrowed money. In the past, it financed construction through a $12 a credit hour facilities fee embedded in the credit-hour cost and also by state capital appropriations.  

This time, the college ”couldn’t generate enough money fast enough through the credit-hour fee,” which produces $3.3 million a year, Chiappini said.

Last week, Stark State became the first college in Ohio to take part in the state’s new intercept program, which Moody’s Investors Service has assigned a credit rating of Aa2, which is near the best.

 The Ohio Building Authority sold bonds on the college’s behalf last week. The college will pay back the debt with $1.6 million of the $3.3 million facilities fee it collects yearly from students.

If Stark State cannot meet its debt service payments, the program authorizes the chancellor of the Ohio Board of Regents to divert state payments from the institution to the bond trustee.

Because Stark State got a higher bond rating than it would have received on its own, its borrowing costs were lower. The Ohio Building Authority estimates it will save up to $1.4 million.

The college already has broken ground for both buildings — a 40,000-square-foot Business and Entrepreneurial Center, which will open in January 2012, and the 46,450-square-foot North Academic Building, which will open next fall.  The latter project will include a bridge that will cross a public street to a parking lot.  In addition, the atrium in Stark State’s main building and classrooms in existing buildings will be renovated.

Stark State has recorded double-digit enrollment annually for several years. Current enrollment, buoyed once more by double-digit growth on the opening day of classes on Monday, is more than 13,000.

Other two-year colleges are expected to apply for the state program now that Stark State ”successfully tested the waters,” OBA chairman Thomas L. Fries Sr. said in a media release.  ”There is a huge void we think we can fill. Many of our community colleges have significant capital needs,” he said.

Stark State is the sixth-largest of the 23 two-year public colleges in Ohio and one of the fastest growing nationwide.