WASHBURN UNIVERSITY OF TOPEKA
BOARD OF REGENTS
January 31, 1996
I. The meeting was called to order at 8:03 a.m. by Chairperson Roth.
II. Present were: Mr. Roth*, Mr. Dick*, Mr. Ferrell, Mr. Felker, Mr. Kimbrough, Mr. Maag,
and Mrs. Parks.
* indicates presence by teleconference call.
III. New Business
A. Student Housing Project
Chairperson Roth introduced the item, noting that the purpose of the meeting was
not to approve the proposed development management agreement; rather, that it was to
be an opportunity for members of the Board to ask questions of Mr. Jerry Wittmer and
his counsel, Ed Carpenter, about the proposed project.
Mr. Hackler reviewed in detail the revisions to the agreement, which he received late
Tuesday, January 30, 1996, made in the earlier agreement provided to members of the
Board. There was some discussion concerning the proposed changes in the mortgage and
assignment sections. Mr. Carpenter noted that with these changes he would have to
assume that approval of an additional mortgage or refinancing or an assignment would
not be given. That being so, he would have to reasonably address how to accrue
replacement cost so they can have sufficient resources to make those major renovations
and repairs. Mr. Carpenter noted that any mortgage proceeds would have to be used for
the project; that it is their goal not to refinance. He also said he felt that to take the
position that the project can never be mortgaged again is unreasonable. He indicated that
the tax exempt status of the project is not entirely certain but that, inasmuch as it is to
be used for student housing, it would appear to be reasonable to expect that the tax
exempt status could be gained.
Mr. Roth shared some of his initial thoughts concerning the "deal killers" mentioned
by Mr. Carpenter. He said his initial thought was that in the event the project were not
successful, the project would go into default and the University would be obliged to pay
the indebtedness on the project and that it was his thinking that the goal would be to
minimize the mortgage indebtedness on the project at least in terms of an initial term and
any additional mortgages or refinancing. Secondly, he referenced the assignment
provisions. He said that the University in doing the proposal is doing a project with Jerry
and Sandy Wittmer and not some other third party who, may be bound by the terms of
the development and management agreement but, would have a different perspective on
He also said that he had not understood in the context of the original presentation
that the University's current family student housing unit would be a part of this project.
Mr. Wittmer said he would be willing to include family housing for the University if the
University were to want that. He said the proposal, as discussed by the ad hoc Building
Committee had assumed that there would be significant cost in renovating the existing
family student housing units to upgrade them and that this would be a way to renovate
the existing housing. He said he could just build additional buildings for family housing
if the University would like them to do that. There was an expression on the part of Mr.
Dick and other Regents that they would really like to have some form of project-based
proforma in order to be able to better assess the project. There will be a meeting next
Tuesday morning, February 6, 1996, at 8:00 a.m. in Morgan Room 204 to continue
discussion of the proposal.
Vice Chairperson Parks asked whether there were persons in attendance at the
meeting who would like to be recognized. Mr. Pinegar, of Pinegar-Smith, requested to
He said he wanted the record to reflect, to dispel rumors that he had contacted
members of the Board of Regents, that he has had conversations with just two Regents.
He said they were Mayor Felker and Chairperson Roth. He reported that both of these
conversations were initiated by Regents, indicating Mayor Felker called him with respect
to the proposal from the Pinegar-Smith company concerning the 24-unit apartment
complex proposed for 19th Street and Washburn; and with Chairperson Roth who had
two or three very specific questions about Mr. Pinegar's letter to President Thompson.
He said he would like to join in applauding Jerry Wittmer and the project, that it is
a good idea. He said that the concerns he had developed a week ago when he learned
that the proposal differed from the impression which he had initially that Jerry and Sandy
Wittmer were providing housing for international students. He said that after reviewing
a draft of the proposed contract that he obtained from the Board Secretary last Friday and
reviewed with his attorney and accountant, it looked like a for-profit developer was
competing with his company and other existing projects. He said that what he had heard
this morning concerning revisions to the proposal resolved some of his concerns, but that
his opposition to the project is simple -- he believes that for-profit developers, if they
come in on the campus and operate housing, ought to do so on a free and competitive
basis, allowing all private developers interested to propose some housing project. He said
he would like to emphasize that it appears that the University lacks a long range plan, or
vision, for what it needs for housing. He suggested that the Board should sit down, along
with interested developers, on how all of us can get together to address the housing
needs of the campus.
Mr. Joe Christ, Jr. also was recognized. Mr. Christ indicated that he is the owner
of Washburn North apartments and a majority owner in the MacVicar 21 and 22
apartment complexes. He said he had some real problems with some aspects of the
project, namely that it was apparently being done on a non-competitive award basis and
that it was taking a big step using campus ground by a private developer. He said it was
his impression that the University was jumping off a cliff without knowing where it's
going. Specific concerns with the proposal which he mentioned in his remarks were the
life insurance policy, that it would be charged out as an expense; the possibility of the
ballooning out mortgage for a 20-year period over a 40-year lease; developer fees. He
said he didn't know about the background of First Financial Trust or about the level of
management fees that might be expected to be charged. He said the institution appears
to be being led into a fact that it's a big gifting deal but he doesn't see how it works and
that the project shouldn't be fast-tracked until all these answers are addressed.
The meeting adjourned at 9:17 a.m.
Kenneth P. Hackler
Secretary, Board of Regents