Debt concerns stall UVa's New Cabell Hall project

One of the University of Virginia’s top renovation priorities has been delayed over concerns that it and other projects might jeopardize the state’s AAA bond rating.

The state already has approved the long anticipated $80 million renovation of New Cabell Hall, but the project is on hold while Virginia’s secretary of finance investigates how much additional debt Virginia can take on before it begins to risk the state’s highest possible bond rating, which allows for lower interest rates.

“The project is ready to go,” said Leonard Sandridge, UVa’s executive vice president and chief operating officer. “The state wants to fund it. It’s approved. But they don’t want to negatively affect the AAA bond rating.”

Each of the three budget plans — proposed by the governor, House and Senate — under consideration in Richmond contains language instructing the governor and secretary of finance to determine when it is prudent for Virginia to issue additional debt and how much without hurting the AAA bond rating.

The secretary of finance is expected to conduct a study into the matter with input from the state’s Debt Capacity Advisory Committee before next year’s General Assembly session.

Colette Sheehy, UVa’s vice president for management and budget, said it is “hard to tell” how long it will be before the state authorizes taking on the debt to finance the renovation of New Cabell Hall, a 58-year-old facility that has 50 classrooms and 390 offices for faculty and staff.

UVa’s Board of Visitors received an update on the project Thursday during the first day of its two-day regular meeting.

In other business, the board’s finance committee authorized the transfer of $1.8 million to the UVa Foundation to pay for expenses occurred as part of the foundation’s work on the former Blue Ridge Hospital property across from Piedmont Virginia Community College off Route 20.

The property, which opened as a tuberculosis hospital in 1920 and closed long ago, is planned to become a new research park for UVa. UVa’s BOV allocated $3 million to the foundation in 2002 to pay for the foundation’s plans to demolish certain buildings, preserve others and work toward a rezoning of the property. The new money from the BOV is meant to cover the actual cost of the project above the initial allocation six years ago.

Sandridge said the new research park project would not move forward until the university’s Fontaine Research Park is completed.

The finance committee also endorsed a plan to renovate and expand the dining hall in Newcomb Hall, a project expected to cost between $16 million and $18 million. It will add up to 500 more seats to the popular dining venues on the first and second floor of Newcomb.

The project would be undertaken at the same time as a planned renovation of much of the rest of Newcomb Hall.

Finance committee members also approved a plan to accelerate a $30 million project to open a fifth new dorm in the Alderman Road area because of attractive construction prices now.

The board’s building and grounds committee, meanwhile, approved three historical markers to commemorate the Catherine “Kitty” Foster homestead and its surrounding area.

The site, located adjacent to UVa’s South Lawn Project on Jefferson Park Avenue, will be feature a memorial to Foster, a free black women who worked as a laundress and seamstress at UVa and died in 1863.

The three historical markers will be placed at and around a memorial and garden. The memorial will be a lightweight frame structure 12 feet tall. It will cast a shadow that outlines the original footprint of Foster’s home.

“This is a very significant move for the university to commemorate this site,” said David J. Neuman, UVa’s architect.