Tristan Wood
The Florida State University Board of Trustees approved a resolution to authorize the FSU Research Foundation to take a $44 million loan to help finance the construction of its $88 million Interdisciplinary Research and Commercialization Building.
The university broke ground on the building in August. It will serve as a collaborative space for researchers from various fields focused on creating and advancing new materials. University officials believe financing the construction — instead of paying for it now — could save the university money.
FSU issued a request for proposal for the financing on Jan. 14. TD Bank offered the university a 15-year loan with a taxable interest rate of 2.51%.
FSU has enough cash on hand in its Research Endowment, said FSU Vice President for Finance and Administration Kyle Clark. However, the potential loan’s interest rate is lower than the rate of return the university expects to collect if the Endowment invests the money over the next 15 years rather than spending it now. Therefore, financing the money would save the university money spent on the building in the long run.
Board Chair Peter Collins enthusiastically backed the financing.
“The Research Foundation raises money to do buildings like this,” he said, “but if we can create opportunities like this and not have to do 100% equity, but that money is still there, it’s not like it’s not there, then I don’t think there is any risk to the university whatsoever.”
Nevertheless, the financing has not been finalized. The Florida Board of Governors, which oversees the state university system, will need to approve the loan before it is implemented, according to the Board of Governors Debt Management Guidelines.
