Winthrop votes to seek bond for up to $21 million. What this means for Rock Hill
A lot of money soon will be pumped into an important Rock Hill entity.
The Winthrop University Board of Trustees unanimously voted late last week to seek a bond issue worth up to $21 million. The money, according to a news release from the school, will be used to replace the Phelps Residence Hall roof and renovate Lee Wicker Residence Hall. It’ll also pay to update the Thomson Eatery (the university’s main dining facility) or, if cost effective, to build a new dining hall.
The decision is clearly a significant one for Winthrop, whose 100-plus-year-old campus needs to be preserved if it is to effectively carry out its business model, which is centered on attracting and retaining students. (The pandemic has caused a drop in enrollment and pushed Winthrop to institute a furlough plan.)
But it’s also a noteworthy decision for the Rock Hill community. Winthrop is a cultural center, an institution for research, and an economic anchor that draws people and revenue to York County.
“(The bond plan) ensures that Winthrop is able to attract students to its campus, which means students are in Rock Hill from August through May, spending money in Rock Hill — investing in Rock Hill, so to speak,” Justin Oates, Winthrop’s vice president for finance and business, told The Herald earlier this week.
The university will approach the bond market itself, Oates said. And the school will be on the hook to repay the bond over a period of time at an agreed-upon interest rate.
In other words, there will be no bond referendum on any local or state ballots; taxes will not increase; and tuition will not rise (outside of the already set annual housing increase).
Winthrop President George Hynd told The Herald the decision effectively gave the university “the green light” to move forward with the project. In the next year, Winthrop will coordinate with two state committees (the State Fiscal Accountability Authority and the Joint Bond Review Committee) and later work with an architecture and engineering agency that’ll provide a more precise figure for how much the proposed renovations will cost.
Once that amount is established, the bond proposal will go back to the board for approval before construction begins. That vote will happen around March 2022, Oates said.
“The good news is that we’re well-positioned to make some of those decisions,” Hynd said. “But because we’re a state entity, it may take some time for us to finally make a decision. And this is an important point: Since we’re a state agency, we have to make sure the state is OK with us moving forward in our finance plan. So there is still some administrative work that needs to be done.”
3 reasons Winthrop pursued issuing a bond
Pursuing a bond, over other types of loans, appears to be advantageous for Winthrop for three reasons.
1. Bond interest rates are at historic lows. During COVID, according to a report from Reuters, universities have been issuing bonds like never before. By August, global bond sales by universities and colleges were at $11.4 billion — which nearly equaled all the bond sales in the three years before 2020.
2. Some Winthrop debt will “roll off.” Oates said the outstanding debt that Winthrop has on its auxiliary portfolio — its housing and dining portfolio — will “roll off” in 2023-24. In other words, the university is paying off that existing debt in the next three years.
“It’s not like we’re adding new debt, we’re just replacing it, so to speak,” Oates said.
3. Winthrop has urgent facility needs. The Board of Trustees and the university have been talking about whether they should pursue capital to deal with Winthrop’s “deferred maintenance” for over a year.
“The fact of the matter is that even with (state) support, we wanted to go ahead and make some renovations that really are necessary. It’s kind of like a home loan. If you own a home, you want to keep it up. You don’t want to let things fall apart because eventually you may want to sell it,” Hynd said. “We won’t sell anything. But we don’t want things to get so out of control that we’re going to have to demolish buildings because they’re in such poor condition.
“So we decided that we’re going to go ahead, after really well over a year of consideration, and pursue a bond.”
What else happened at the board meeting?
▪ Board members also voted Friday to keep the discounted fee structure for summer session 2021. With the discount, and then by expanding online course offerings, Winthrop saw “significant increases in enrollment” last year, a news release states.
Undergraduate in-state students will see the largest discount of a 29.5% reduction over fall and spring tuition fee rates if they enroll in summer classes, the release states. For more details, see the 2021 Summer Schedule of Fees on Winthrop’s website.
This story was originally published February 24, 2021 at 9:40 AM.
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