photo by: Shawn Valverde/Special to the Journal-World

The University of Kansas campus is pictured in this aerial photo from September 2023.

KU is seeking approval to add $135 million in debt for projects as far away as a cancer center in Kansas City and as near as an apartment complex on the edge of the Lawrence campus.

The Kansas Board of Regents at its Wednesday meeting will consider approval of a resolution authorizing new debt for the University of Kansas.

The largest chunk of the new debt will be to help construct a $330 million cancer research and treatment center on the KU Medical Center Campus in Kansas City, Kan.. KU is asking for authority to issue up to $100 million in bonds to help pay for the center. The remainder of the money for the building is expected to come from private donors, special grants from the Kansas Legislature, and federal research grants.

The cancer center building has been in the works for years, and took on added importance in 2022 when the National Cancer Institute designated KU as a Comprehensive Cancer Center, which is the same high-level designation that nationally-renowned treatment centers such as the Mayo Clinic and the M.D. Anderson Cancer Center. KU’s new cancer center building is expected to be a dual use facility that will house both researchers and doctors who provide care to patients.

“The new Cancer Center Research Building is expected to provide the necessary infrastructure to attract top-tier faculty, secure additional research funding, and drive advancements in cancer treatment and prevention,” Regents were told in a staff memo.

The building is expected to be completed by mid 2028.

Closer to the Lawrence campus, KU is seeking to issue up to $35 million in bonds to purchase the Hawker apartment complex, 1011 Missouri Street. The privately-constructed apartment complex is just northwest of the KU football stadium.

As the Journal-World reported in March 2024, the KU Endowment Association purchased the apartment complex from a group led by Lawrence businessman Thomas Fritzel. The Endowment Association purchased the property because KU leaders have become concerned that the university is running out of student dormitory space as KU has set a record high in enrollment.

KU Endowment immediately began leasing apartment space in Hawker to KU’s student housing department. Now, KU leaders are convinced they’ll need the extra housing for several more years, and have determined it would be a better deal for the university to own the property.

Documents provided to the Regents don’t specifically disclose the purchase price KU has agreed to pay KU Endowment, but rather state that KU is seeking authority to issue up to $35 million in bonds to “finance the purchase of the Hawker Apartments and retire KUEA’s loan.”

The Douglas County Appraiser’s Office currently lists the market value of the property at $17.7 million. The KU Endowment Association, which is a private entity, declined in 2024 to disclose how much it paid for the property. Under Regents policy, KU will have to go through an appraisal process before purchasing the property, and the Regents were told that process is yet to come.

The purchase of the apartment building — which can house more than 200 students — is in addition to a plan for about 400 student apartment bedrooms to be constructed as part of KU Gateway District that is developing around the football stadium.

Plans call for KU’s private development partner in the Gateway District to construct multiple apartment buildings on the east side of the stadium.

KU officials contend that both the new Gateway District apartments and the Hawker Apartments are needed, even though KU officials are not confident that KU’s record enrollment growth will continue. Universities across the country are expected to face enrollment headwinds due to lower numbers of new high school graduates in the coming years. Birth rates fell sharply after the 2008 recession, and now, 18 years later, that demographic trend is showing itself in the form of smaller high school graduating classes.

Despite that pending demographic challenge, KU leaders say they need the additional housing because existing units are full, and KU believes it will be necessary to demolish some older dormitory buildings due to rising maintenance costs. KU leaders have said they are exploring demolishing the remaining Jayhawker Tower buildings, which are just east of the Daisy Hill dormitory district.

In addition to seeking approval to issue up to $135 million in bonds for the two projects, KU also is seeking approval to refinance $276 million of existing bonds that were used to construct new classrooms, laboratories and student living space as part of Central District project in 2016. KU is expected to save about $27 million over the life of the bonds by refinancing them, according to a memo provided to the Regents.

A memo to Regents states that KU will have about $650 million in general debt after the new issuances. It is estimated that KU will be paying between 4% and 5% of its total revenues for principal and interest payments in the coming years. Regents were told via the memo that level was acceptable, as a general benchmark is that universities should keep the amount below 7% of revenues.

Under the proposed plan, KU would not technically issue the debt itself, but rather would used the Kansas Development Finance Authority, a state-created entity that issues debt for a variety of state projects. KU, however, will have to pledge to the KDFA to use any available university resources to make the debt payments in the future.

The Regents will consider the debt proposals at their 1:30 p.m. meeting on Wednesday in Topeka.