Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, September 4, 1993 TAG: 9309040196
SECTION: VIRGINIA PAGE: C2 EDITION: STATE
SOURCE: Associated Press
DATELINE: HARRISONBURG LENGTH: Long
Without seeing it assembled, JMU signed a lease in May for the 33,000-square-foot, modular building. Harrisonburg developer Bill Neff bought it at auction last fall after proposing the lease agreement to the university.
By entering the unusual agreement, JMU avoids state regulations that cover the purchase and construction of state buildings. It also allows the university to proceed with a planned expansion at least two years ahead of schedule.
Eager to quickly find a home for its new College of Integrated Science and Technology, the state-funded university didn't check prices of leasing other modular buildings, said Linwood Rose, JMU senior vice president. The school briefly considered renting space off campus but jumped at Neff's offer, which was about half the price, Rose said.
"The notion of getting something right on campus at a very attractive price appealed to us," Rose said. "It's about as simple as that."
The building was taken apart, its 50 units wrapped in plastic and stored outdoors before Neff bought it. Last winter, it became waterlogged, destroying walls, carpets, floors, ceilings and electrical fixtures.
JMU officials knew there was some damage when they signed the lease but hadn't made a full inspection, Rose said Friday.
"That's his [Neff's] responsibility as far as I'm concerned. I take his word for it" that Neff will deliver a satisfactory building, Rose said.
He contends Neff is responsible for reconstructing the building as JMU wants; Neff says JMU will have to pay for the many changes school officials requested from the original floor plan.
University officials said they are withholding rent until repairs are made.
Asked why JMU would buy a building without seeing it assembled, Rose said, "Our contract with him is to deliver a finished product. I don't know that I particularly care a whole lot what that product looked like beforehand."
Instead of simply hooking the metal building's modular pieces together as planned, workers must replace much of the structure's fittings. The building also has several broken windows and the roof beams are visible through holes in the siding.
State engineering officials ordered construction work stopped at the site last month because the university had failed to submit detailed plans for the project.
JMU will pay Neff $145,000 annually in taxpayer money for the building for at least five years. The university could renew the lease for another five years, after which it would own the building.
The building would be worth about $34,500 at the end of the 10-year lease, said Terry Klosky, director of construction at Scotsman Buildings in Baltimore, which built the building in 1985.
Neff declined to say what he paid for the building, which was used for office space by IBM Corp. in Manassas. However, two sources familiar with the transaction said Neff purchased it last year for $33,000. The building was worth about $2.1 million new, according to the manufacturer.
"I got a good buy on it," Neff said. "I wasn't looking to make a bunch of money on it. I was looking to get the school started."
Neff said he knew the building was damaged when he purchased it.
Dismantling and moving modular buildings costs $7 to $9 a square foot, said Klosky. That would mean a cost to Neff of between $231,000 and $297,000, plus the price of repairs, which Neff said has not been determined.
Neff described himself as a "sizable" JMU donor but wouldn't be more specific. University records show Neff gave at least $5,000 during the 1988-1989 school year and smaller amounts in other recent years. Some years Neff did not contribute.
Neff's donations and a longstanding acquaintance with JMU President Ronald Carrier were not factors in the decision to take the lease offer, university officials said.
"We needed a building and this was a good way to get one," said university spokesman Fred Hilton. "In a town this size you have long ties to all key people, and he is certainly a key person."
Neff owns a large, undeveloped tract next to the site of the new building and said he hopes to tie development to JMU's planned campus expansion.
"Sure, I want it to succeed. I have a vested interest, but I also have a big heart for the university," Neff said.
The building will be temporary classroom space for JMU's science and technology program, a $190 million campus expansion that JMU hopes to fund largely through state bonds. University officials hope to have the first permanent building by 1996.
The lease agreement appears to be unique among Virginia state colleges.
"Leasing of buildings goes on all the time and that is not unusual. I am not familiar with a case where someone built a building on campus and then leased it to them," said Mike McDowell, spokesman for the State Council of Higher Education.
State building officials assume prefabricated buildings meet safety codes and do not require inspections until the building is completely erected, said Bill Scott, capital outlay review manager for the state Department of Engineering and Buildings.
Scott's office became involved in the JMU project because a local fire inspector reported demolition work under way, he said.
Neff has hired a contractor to draw up detailed design plans and submit them to Scott, probably next week.
Despite the delay, JMU plans to open the building in October, Rose said.
The new school's 85 students are using other classroom space until the temporary building is ready.
Memo: shorter version ran in the Metro edition.