Asu Officials See Promise In Payson Campus

Agreement termed ‘promising second date,’ with no wedding date set

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Arizona State University and Payson have definitely gotten hot and heavy — but no one has scheduled the wedding just yet, say university officials in the wake of the joint signing of a memorandum of understanding (MOU).

“I would describe this as a promising second date,” says Arizona Board of Regents member, Fred DuVall.

“We’ve taken enough of a look to see the promise and we’re coming back for a deeper conversation.”

“I think this is an important step in the process,” said ASU Vice President for Planning Richard Stanley.

“I’m not going to characterize likelihoods, but we wouldn’t be taking the time and effort to work on this at this level if we weren’t determined to try to make this work.”

The announcement this week that Payson and ASU have signed the MOU and will form a joint planning committee gave local backers heart, after a long process full of frustrating delays. ASU officials this week proved much more willing than ever before to discuss the details of the plan and the problems that remain.

Payson Mayor Kenny Evans in a round of speeches before anxious and hopeful local supporters put the odds that ASU will actually build a four-year campus at about “75 percent” — his most optimistic assessment to date.

However, while ASU officials this week said the Payson campus would fit perfectly into the university’s increasingly urgent search for a creative way to offer lower-cost university degrees, they veered away from odds-making or even setting a date on taking the next, legally binding step — signing a set of Intergovernmental Agreements (IGAs).

Stanley said one of the first tasks tasks for a joint Payson/ASU planning group will be establishing a timetable for critical tasks.

Payson’s working group has developed an elaborate schedule for building the proposed “green” campus on 300 acres of Forest Service land at the site of the Payson Ranger Station on Highway 260. That schedule envisions the campus opening by the fall of 2012 or 2013.

“I’m just not sure what the schedule might be before we sit down and talk” in the joint planning group, said Stanley.

He said that it will “certainly take months” to agree on the details of the IGA. “I wouldn’t want to go further than that” in predicting timetables.

DuVall said the planning for the Payson campus fits in perfectly with the university system’s recently adopted 10-year strategic plan.

That plan envisions a dramatic increase in the number of university degrees awarded in the state, which almost guarantees the state will have to develop a lower-cost option and new campuses.

Arizona already lags well behind the national average in the percentage of the work force with college degrees, high school graduation rates, college completion rates, and the percentage of college students who graduate with a degree within six years.

The Board of Regents’ strategic plan calls for increasing the number of students enrolled from the current 100,000 to 156,000 by 2020 — and the number of bachelor’s degrees awarded annually from 19,000 to 36,000.

However, the universities face severe financial problems in reaching that goal. Tuition at ASU and the two other public universities has spiraled in the past several years, as state support for the universities has plunged. ASU went from tuition rates in the bottom one-third nationally to rates in the top third in less than three years.

Still, enrollment has continued to rise. In the past two years, enrollment at ASU has risen 11 percent — even as state support plummeted 23 percent.

That makes Payson’s offer to build a campus at no cost to the state tempting, said ASU officials. Payson has developed a plan to create a Community Facilities District run by the town council, which would own the land and lease half of the 300 acres to ASU and the other half to various private developments, including a proposed conference hotel.

DuVall said that the three universities have entered into conversations with eight or 10 potential partners for campuses that would offer lower-cost degrees, but negotiations have gone furthest so far with Payson and Lake Havasu City.

“I don’t want to get too far out over our skis” in talking about the Payson campus, “but it’s extremely promising.

“Payson is at the top of our opportunity list,” said DuVall.

Stanley said that Lake Havasu City offered to buy and convert a shuttered school into a university campus. ASU has done engineering studies of the offered facilities and also done an initial marketing study in the area. The preliminary studies estimated that the campus would need to recruit 1,000 students in the first three years to pencil out.

“But we’re not ready to actually proceed to actually doing something in Lake Havasu at the moment,” said Stanley, mostly because of financial uncertainties.

He said that making a go of a campus like the one Payson has proposed rests on a financial “three-legged stool.”

First, local partners have to come up with money to provide the facility.

Payson seems solid on that count, with pledges totaling $500 million — including $100 million in donations and the rest in the form of promised loans and investments.

Second, the campus would have to be viable when charging 30 to 50 percent less tuition than ASU’s four campuses in the Valley — where tuition now totals about $8,400 annually.

Finally, the Legislature would have to agree to fund enrollment growth at the new campus — perhaps at about half the cost of enrollment growth at the Tempe campus.

Although the state would actually save money for every student that enrolled at the Payson campus, the state’s current budget mess might preclude even that level of support, said Stanley.

The Legislature has cut funding for ASU from $490 million two years ago to about $375 million, even in the face of still sharply rising enrollment, said Stanley.

“To put together a quality program (on the Payson campus) we need a small amount of investment by the state, much lower than on the existing campus, but still not zero,” said Stanley.

That uncertainty has stalled the discussions with Lake Havasu City, but could work in Payson’s favor — since even in the best-case scenario, students wouldn’t show up for two to four years.

“Hopefully, that takes us to a time when the state’s financial situation will be better than it is now,” said Stanley.

In the meantime, ASU will undertake extensive demographic and marketing studies to estimate how many students the campus might attract and what degrees ASU should offer.

“We have theories as to who are the people who would want to go school in Payson, but we need to get some objective data behind that,” said Stanley.

He said a similar study in Lake Havasu concluded the area had “just enough enrollment” to sustain a financially viable campus that would grow to at least 1,000 students in the first three years.

He said the Payson campus would probably offer bachelor’s degrees in a few core fields, like education, business and popular liberal arts majors, like political science, psychology and communications. In addition, the campus would likely offer certificates and degrees in key fields of local interest, like rural health and sustainability.

“That’s what we’re going to work on now,” said Stanley, “to try to determine what would work.”

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