Campus property economics

Computer rendering of the new Missouri City campus, which will open March 2017.

Computer rendering of the new Missouri City campus, which will open March 2017.

Alyssa Foley, Editor in Chief

“The fact that our campus there was flat in enrollment was an indicator of problems with access,” said Houston Community College Chancellor Cesar Maldonado. Fort Bend County is the fourth fastest growing county in the U.S., yet the Missouri City campus in Sienna Plantation hasn’t grown with it.

The new Missouri City campus being built off Texas Parkway will be a far more visible location. The chancellor stated that by all indications there is still a demand for a campus in that area, and that “the relocation of the campus is justified.”

“We have a property that’s bought and paid for. The fact is, we haven’t been able to utilize it to what its potential should have been,” said Trustee Robert Glaser.

Glaser has been making calls for more transparency within the administration, “I didn’t have any supporting evidence in writing in front of me prior to the vote…There was never any hard numbers done other than just macroeconomics saying, ‘Well, there’s growth in the area.’…we could have had a lot more supporting evidence to back up the commitment of that kind of money.”

“We expect a big jump in dual credit students there,” said Dr. Maldonado about the Missouri City campus. Recently the board of trustees voted to make it so that out-of-district dual credit students can now take college courses at HCC for free. Many dual credit students take dual credit courses at their high school, so it’s unclear how many will actually step foot on an HCC campus.

The new location will be only two miles away from the Stafford campus, but the chancellor insists that the neighboring campuses are “not going to be competing against each other.”

Dr. Maldonado explained that, “The plan for that location, in some areas overlaps with what we’re doing with Stafford, but it’s significantly different from what we’re doing at Stafford today.”

The plan is to make the new Missouri City campus a center for entrepreneurship and health sciences. Meanwhile, Stafford is set to be the center for manufacturing with the new workforce building about to be completed this May.

“These are two different communities,” adds Maldonado, “the Stafford campus is near capacity, it is growing strong still.” Many students who attend classes at Missouri City also attend classes at Stafford.

Recently, HCC was in the local news with headlines stating that the college lost $10 million in the Missouri City campus relocation. “That number is inaccurate,” stated Dr. Maldonado.

Exactly how much HCC lost depends on how you look at it.

The total book value of the existing location is about $22 million. Only about $10.5 million is being recovered by the recent sale of the land and building, and with a grant the college is receiving from the non-profit George Foundation, HCC is actually taking in nearly $12 million with the move.

On the surface, it does appear that HCC lost $10 million on the Missouri City campus move, because it’s taking in $12 million for a $22 million dollar campus. However, the number shifts depending on how you look at the details.

In a previous article in The Egalitarian, I explained how at least $5.5 million was lost on the Sienna location. I stuck with that generously low number because I view the rest as being debatable. Even if only five million was lost, that is five million too much. It’s borrowed money that’s collecting interest, which area taxpayers will have to repay.

Taking out the value of transferable assets (i.e., couches and equipment) that will be moved to the new location and the depreciated value—which is a sunk cost anyways—HCC is walking away from about $16 million that the college invested in the Sienna campus.

They sold a $16 million asset for $10.5 million. Therefore, the college lost $5.5 million. Receiving a gift from a non-profit doesn’t change how much tax money was lost, so I did not count the foundation grant.

“If you look at the economic transaction, we’re replacing money,” said Chancellor Maldonado, “I don’t understand the scenario where there is no value for that because we’re getting an improved facility where we’re going.”

According to numbers published by the college, the total book value loss is $4.4 million.

“There are sunk costs in the project,” Chancellor Maldonado admits, but “When we look at the infrastructure where we’re moving, it’s in excess of what we’ve invested in the current location.”

With $21 million in bond funds flowing into the project, asset sales, and grant money, the project is well funded. The administration expects a zero sum loss, with excess funds being returned to the George Foundation.

“This is part of a long-range plan to service the needs of those taxpayers,” said Dr. Maldonado.

When Missouri City joined the HCC taxing district, they were told that they would be given their own campus. The Texas Parkway location will be the third time HCC established a campus in the community; before Sienna location was built, HCC had a location off Cartwright Road beginning in 1997.

Trustee Glaser said perhaps leasing a facility would have been a better deal because the college could walk away without having made such a large investment. He hopes that in the future, a student base can be developed before so much money is dedicated to a new campus.

“Obviously, if I didn’t think it was a good project, I would not have recommended it to the board,” concluded Chancellor Maldonado.

“We don’t have such a good track record down there,” says Glaser, who is guardedly optimistic about the move, “I’m hoping that we can do better.”

Recently, the construction documents were completed and are being reviewed by Missouri City government for permitting. The next steps include reviewing the budget and the schedule, as well as receiving a permit from the municipal government.