State School Bond Authority approves campus leases, $56 million Tennessee Tech housing request and delegates up-to-$250 million bond sale

The Tennessee State School Bond Authority on March 24 approved multiple lease-related financings for public universities, agreed to $56,000,000 in bond funding for a Tennessee Tech residence hall phase and authorized the staff to proceed with a supplemental bond resolution allowing an up-to-$250,000,000 sale in April.

The actions, taken by roll-call votes with all members recorded as voting aye, included: (1) approval of minutes from the authority’s Dec. 16, 2024 meeting; (2) approval of a five-year corporate-quarters lease for the University of Tennessee Health Sciences Center to house students on clinical rotations in Chattanooga; (3) approval of an amendment to Middle Tennessee State University’s lease with the city of Shelbyville adding 4.8 acres for an aerospace campus; (4) approval of $56,000,000 in bond funding for a Tennessee Tech 400-bed residence hall (part of a larger $72,560,000 project); and (5) approval of a supplemental resolution authorizing the issuance and sale of higher education facilities bonds not to exceed $250,000,000, with the sale scheduled for April 9.

Why it matters: The authority’s actions clear near-term financing and real property steps that universities say are intended to support student housing and program expansion. The delegated bond authorization enables staff to finalize sale details for a multi-institution bond issue that will supply capital across campuses.

University of Tennessee Health Sciences Center lease Austin Oaks, representing the University of Tennessee, presented a request that the authority approve borrowing by another method in the form of a corporate-quarters lease on behalf of the University of Tennessee Health Sciences Center. "This request is to support the college of medicine and the college of dentistry students that are in Chattanooga as they're on clinical rotations," Austin Oaks said. The lease covers 11 two-bedroom units for a five-year period, with an average annual effective cost presented as $508,728. The board moved, seconded and approved the lease by roll call.

Middle Tennessee State University lease amendment Bill Waits, architect, and Alan Thomas, vice president for business and finance at Middle Tennessee State University, asked for approval of an amendment to a previously approved lease between MTSU and the city of Shelbyville. The amendment exercises an existing option adding 4.8 acres to the lease, increasing the leased acreage from 16 acres to 20.8 acres while leaving the total lease term unchanged at 40 years. MTSU said the additional acreage will support the university’s aerospace campus project, including an initial phase focused on the professional pilot concentration, a flight briefing/debriefing space and a 30,000-square-foot hangar to maintain an aviation fleet the presenter said comprises about 50 aircraft. The Shelbyville City Council approved the lease amendment on Feb. 13, 2025. The authority approved the amendment by roll call.

Tennessee Tech residence-hall bond request Jim Cobb, director of capital projects and planning for Tennessee Tech, and Dr. Claire Stinson, vice president of planning and finance for Tennessee Tech, presented a phased project for the JJ Oakley Innovation Center and an associated residence hall. Cobb said the authority was being asked to approve $56,000,000 of bond funding for the residence-hall portion of a project with a total phase budget of $72,560,000. The residence hall is described as about 98,000 square feet and a 400-bed facility; the innovation-center portion will be paid with institutional plant funds, the presenters said. Cobb stated the debt financing was estimated at $4,640,000 and that feasibility work had been done; the presenters said projected revenues would cover the debt. The authority approved the bond request by roll call.

Supplemental resolution for 2025 program bonds Sandy Thompson, Director of State Government Finance in the Comptroller’s Office, presented a supplemental resolution authorizing and providing for the issuance and sale of higher education facilities second program bonds for the 2025 series and asked the board to delegate authority to sell and set bond details. Thompson said the recommendation from the authority’s financial advisor was to proceed with a bond sale not to exceed $250,000,000 and noted members had received and reviewed the preliminary official statement. Thompson said the bonds are scheduled to be sold on April 9. The authority approved the supplemental resolution by roll call.

Votes at a glance - Approval of minutes (Dec. 16, 2024): motion moved and seconded; roll-call vote recorded as all ayes; outcome: approved. - University of Tennessee Health Sciences Center — borrowing by another method (corporate-quarters lease): motion moved and seconded; roll-call vote recorded as all ayes; outcome: approved. Key terms presented: 11 two-bedroom units, 5-year term, average annual effective cost $508,728. - Middle Tennessee State University — amendment to lease with city of Shelbyville: motion moved and seconded; roll-call vote recorded as all ayes; outcome: approved. Key terms presented: add 4.8 acres (lease acreage increases to 20.8 acres), 40-year term unchanged; Shelbyville City Council approved amendment 02/13/2025. - Tennessee Tech — bond funding request (residence hall portion): motion moved and seconded; roll-call vote recorded as all ayes; outcome: approved. Key terms presented: request $56,000,000 of bond funding; total phase budget $72,560,000; 98,000 sq ft, 400 beds; innovation center funded by plant funds; feasibility analysis conducted per presenter. - Supplemental resolution — issuance and sale of Higher Educational Facilities Second Program Bonds, 2025 series: motion moved and seconded; roll-call vote recorded as all ayes; outcome: approved. Not-to-exceed amount: $250,000,000; sale date stated as April 9.

Meeting context and next steps Board members recorded no opposition on roll-call votes taken during the meeting. Presenters said required local approvals (for example, Shelbyville City Council’s Feb. 13, 2025 action on the MTSU lease amendment) and feasibility work (for the Tennessee Tech residence-hall financing) had been completed. The Comptroller’s Office will proceed with preparatory steps for the April 9 bond sale.

The authority adjourned after members moved and seconded adjournment.