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UW–Madison authorized to lease—and possibly buy—two parcels to relocate fleet, waste operations
Summary
The UW System Board of Regents approved a request from UW–Madison to enter two long-term leases with options to purchase parcels that would house campus fleet services and the campus waste and recycling operation, with appraisals to be refreshed before any acquisition is presented to the State Building Commission.
The University of Wisconsin System Board of Regents on a voice vote approved a request from UW–Madison to execute two leases, with an option to purchase, to relocate campus fleet services and the university’s waste and recycling operation.
Senior Associate Vice President Alex Breaux presented the request on behalf of UW–Madison, saying the moves are part of the campus long-range master plan to free up a Mill Street site for academic, student-support buildings and parking. Breaux said the two identified parcels are near each other, allowing the university to consolidate administrative functions for parking and transportation, garage storage and vehicle maintenance, a park-and-ride lot, and a new home for waste and recycling.
The regents were given details about the lease structure and the university’s acquisition plan. Paula Veltham, head of real estate at UW–Madison, said the parcels were marketed for sale, appraisals were completed and “the purchase price is under the appraised value.” She said the leases will be structured to allow for purchase before the end of year three and that the State Building Commission (SBC) approval would be required if the university proceeds with acquisition. Breaux added that the landlords will perform the necessary tenant improvements on the university’s behalf.
Regent Ashok Rai asked about the relative cost of leasing versus purchasing now. Veltham said the university obtained appraisals and that any acquisition taken to the SBC would require refreshed appraisals (appraisals not older than six months). Regents also noted the sites are in a corridor targeted for future redevelopment and that the university has locked a three-year purchase price in the lease structure to limit short-term price exposure.
The board recorded a motion to adopt the resolution (mover and seconder not specified in the public record) and approved it by voice vote. The action authorizes UW–Madison to execute the two leases and pursue acquisition only if the university determines purchase is financially prudent and obtains SBC approval as required.
Under the terms presented: one site with an existing building will be leased for 15 years with two five-year renewals; the other parcel will be a 10-year lease with two five-year renewals. The leases include an option to purchase within the first three years; the university will refresh appraisals before seeking SBC authorization to acquire.
