• printer friendly
• mail this article
• iPod format
• digg

Thursday, October 31, 1996

ASUCLA:

Ackerman renovation, loss of revenue sends students' association back for more loansBy Frances Lee

Daily Bruin Contributor

Four years and several million dollars ago, the Associated Students of UCLA (ASUCLA) could not have predicted that their renovation of Ackerman Union would bear so heavily on their successors.

Confident that they had built up enough cash reserves to afford the project, ASUCLA assumed an estimated $2.8 million cost to remodel the interior of the new Ackerman Union in 1992.

Today, remodeling construction figures have ballooned to $5.3 million, along with the $13.6 million for the expansion, pushing the total cost of the project to $18.9 million.

But the problem is twofold. In addition to the increased price tag, "we have no cash to pay for it," said ASUCLA Executive Director Patricia Eastman.

The solution? Borrow it.

The figures are mind-numbing. Of the $5.3 million the association will need to borrow, $4.2 million is for the interior remodeling of Ackerman Union and another $1.1 million is for costs involved in accelerating the completion of the building.

An additional $1.5 million is being requested by ASUCLA to cover operating losses due to the delayed opening of the new student store, according to association Finance Director Rich Delia, and would come in the form of a line of credit which the association hopes to secure from the university.

Funds for the expansion have already been approved and disbursed by the UC Board of Regents through bond issues in 1991. The association is still negotiating the terms of the additional loans and credit with the university.

ASUCLA remains optimistic about its prospects for quick relief from this financial burden. "The organization should be proud. In the second year (of the five-year financial master plan), we will actually be in a positive cash flow," said Eastman.

Projected revenues for the third year of the plan should be positive enough that ASUCLA plans to pay off the $1.5 million line of credit, she added.

"The $3.3 million dollar loss this year (in the budget) is in significant part made up of the new debt of the new building and the increased operating cost of the new space," Eastman said. Also factored into the budget was a $676,000 payment ASUCLA will make to the university in March 1997 ­ the first payment made on the original $13.6 million loan.

Construction costs have skyrocketed due, in large part, to the unanticipated expenditures of "discovered conditions." As the renovation continued, older parts of the building had to be brought up to current building codes, something the association had not planned for and which delayed completion even further.

"We asked the contractor to work extra shifts to get the job done," Eastman said. "We felt it was important to get the store (opened by January)."

ASUCLA is pushing to open the store in January because revenues from Towell are starting to ebb off. "The first two periods of the fiscal year, we've done well, (even in Towell). Now, we're starting to hurt because Towell is off the beaten path, and we're feeling the effects of people not knowing where Towell is," Delia said.

"We're cautiously optimistic" about revenues from the new store, he continued. "(The success of the store) is contingent upon getting out of Towell and into Ackerman by the first week of January, and that everything is working."

Board members agree that the store's opening is a crucial indicator of how well ASUCLA will perform financially.

"The store is going to 'make' us. Our hope is that with this capital investment, we'll get a huge return," said Finance Committee Chair Levin Sy.

Comments

Post a comment