CHAMPAIGN – As the University of Illinois prepares to choose a developer for a major expansion of the UI Research Park, faculty are asking questions about money spent so far – and if it's the right time to invest more, given the school's budget challenges.

Leaders of the Campus Faculty Association first wrote to top UI administrators last December asking for a "transparent and full accounting" of the UI's economic development efforts. Specifically, it asked for "all costs and benefits to the Urbana campus" of those activities, including the UI Research Park, the I Hotel and Conference Center, the proposed redevelopment of Orchard Downs, the transfer of university properties, rental agreements and administrative costs.

A decade ago, with the support of then-Gov. George Ryan and the General Assembly, the university adopted economic development as a fourth mission. State legislation at the time formally allowed the UI to expand its traditional three-part mission of teaching, research and public service.

"Now, as very different economic times from those that existed 10 years ago seriously threaten the campus and the university, the Campus Faculty Association believes it is appropriate to review how well this change in mission is serving our institution," the letter said, noting that undergraduate tuition and fees had risen significantly in that period. It was sent to interim Chancellor Robert Easter and interim President Stanley Ikenberry and copied to the UI Board of Trustees.

Kathy Oberdeck, president of the Campus Faculty Association, said the group has not yet received a response from administrators. A follow-up letter was sent to UI trustees last week by Professor Emeritus Stephen Kaufman, urging the board to respond.

"As far as I can tell we haven't received any information from the university about whether the research park is earning money, losing money, or breaking even, despite several requests," Oberdeck said.

A News-Gazette analysis last fall found the university has spent about $19 million on the park, including infrastructure such as utilities, relocating research fish ponds and other programs and building the Conference Center attached to the I Hotel, which is run by current research park developer Fox/Atkins.

In addition, ongoing expenses for the park's operations are about $1 million annually, The News-Gazette learned. The research park does generate lease income, fees and other revenue, but about half of the expenses this year were covered by university or state funding, according to UI documents. And the UI pays about $1 million a year to rent office space for some of its units located in the park.

"We are concerned about whether it's possibly a drain of university funds at a critical time of fiscal crisis," Oberdeck said.

"They're making lots of decisions not only about the research park but about this continuing fourth mission, and I just thought those were fair questions to ask," Kaufman said. "The university community, the students, the faculty, the staff, really deserve an answer and an inquiry as to how this is making the university better."

The park's benefits, supporters have said, include the $20 million in federal small business grants that research park companies have received, as well as property tax revenue, conference center income, support for researchers and internships, and contributions to the area's payroll.

"From my perspective the park has been a valuable asset for us, in ways I didn't expect," said Easter.

The park was created to support faculty members with business ventures and to help create more job opportunities locally, particularly for spouses of faculty members being recruited by the university. But it has also provided hundreds of internships for UI students, Easter said.

The interim chancellor declined to take a position on the two developer proposals before the research park's board of managers. Easter did not attend the board of managers meeting earlier this spring during which developers presented their proposals for the expansion. Administration of the research park, Easter said, does not fall under the office of the Urbana campus chancellor. Several years ago the university's Office of the Vice President for Technology and Economic Development took over the management of the park.

This spring the vice president, Avijit Ghosh, met with leaders of the campus senate to share some information about the park.

The research park isn't "a front-burner issue" for the senate, given everything else going on at the university, said Senate Executive Committee Chair and UI professor Joyce Tolliver. But it fits in with the overall review of university budget priorities, she said.

And faculty generally are curious about the park because of its complicated financial relationship to the university, said William Maher, who also sits on the Senate Executive Committee. The UI owns the land but leases it to Fox/Atkins, which builds the buildings and then rents space to companies.

A separate limited liability corporation, the UI Research Park LLC, which is a subsidiary of the university, oversees park operations.

"The university's name is associated with it, and yet private developers are using the space and renting it out. It automatically seems to raise questions about wanting to see where all the money goes and what's come out of it," Maher said.

"Especially in a time when everything is being looked at from a budgetary point if view, we thought it would be useful to at least have some basic knowledge about what the research park is, what it does, and what is its financial status," Tolliver said.

Ghosh's presentation to the committee included information about research under way at the park and who works there, she said. Ghosh told faculty he sees the park as both an academic enterprise and a tool for economic development, she said.

The vice president "made a very good case for the university's position" and alleviated some of Maher's concerns, he said. But Maher said he'd still like to see a "full accounting" of park finances, in the form of an audit report.

He thinks there's also lingering controversy about the original development of the park 10 years ago. A campus selection committee initially favored a Chicago-based developer but was overruled by top UI administrators.

"The question which is in the back of everybody's minds," he said, "is this a sweetheart deal that developers worked with the university to get? Is the university getting the short end of the stick to the benefit of developers or not?"

The flip side, of course, is the "synergies" created between the corporations in the park and science and technology research at the university – the companies incubated at the park, the jobs and internships created for UI students and recent graduates. Those things are "much harder to quantify," he said.

Tolliver believes many faculty are closely following news on the selection of a developer for the park's next phase.

The university's 10-year developer agreement with Fox/Atkins expired last month. Fox/Atkins will continue to manage the first phase of the park, which was built on land south of St. Mary's Road and west of First Street, as well as the I Hotel and Conference Center east of First Street. The firm chosen for the expansion will be responsible for developing land east of First Street to Fourth Street extended, and south to Windsor Road.

The UI issued a request for proposals last fall and invited the two finalists – Fox/Atkins and the Atlanta, Ga. firm Carter – to present their proposals to the UI Research Park Board of Managers in March.

The board could forward its recommendation to the UI Board of Trustees, which has final say on the selection of a developer, by August, according to Ghosh and UI Trustee Edward McMillan, who also chairs the research park board. Both men told The News-Gazette earlier this month that the UI's budget difficulties have not affected the timetable for the selection. The goal with the next phase is to "create a way for the university to get something back in return," Ghosh said.

McMillan said faculty members are asking good questions, and raising the same issues he and other board members are grappling with as they negotiate a new development agreement.

He suspects the UI could provide a report on the park's finances, as long as it doesn't get in the way of negotiations with the two development firms.

"I would think that would be a fair question to say, we're going on to Phase 2, let's do a post-mortem on Phase 1 and what's both the tangible and intangible benefits of the research park. I think that's very fair. That should be done, and I'm pretty optimistic about what we'll see," he said.

McMillan said the park's expenses, revenue and other financial information are reported publicly at research park board meetings.

He said the university's chief contribution was providing the land, and infrastructure and utility costs that are being repaid in part through connection fees.

The board foresees no further capital investment on the university's part in the next phase, McMillan said. There are plans for an extension of Fourth Street down to Windsor, paid for with a $6 million federal grant and matching funds from the university ($100,000) and the city ($30,000). But "that's about it," he said.

"The capital that's to be invested otherwise is developer capital, if the agreement is going to be negotiated the way we think it's going to be," McMillan said.

Asked if the UI's cost would be zero, McMillan said, "It depends upon the agreement and how it's written."

The board earlier this month agreed to extend the budget for the park's operations into the next fiscal year, then "come back and adjust the numbers after we have an agreement," he said in response to whether the university had projected the costs for the next phase of the park.

Tolliver said the board's stated goal of keeping the UI's costs down, and having the developer shoulder more of the financial risk in the next phase, is "prudent."

"I know that a lot of faculty have questioned to what extent the university is subsidizing the research park, and whether or not that is a good investment. And I think the real question is what we'll be doing in the future, and not what we've already done in the past," Tolliver said.