Asu, Payson Sign Agreement For College Here

Both sides sign key agreement, but delay official announcement


Payson and Arizona State University have signed a memorandum of understanding (MOU) to build a four-year college campus in Payson on 300 acres of land now owned by the Forest Service, the Roundup has learned.

However, the two sides have not agreed on the final wording of the announcement and on their plans to hold a press conference to announce the unusual agreement — which could offer a way for students to get a relatively low-cost, four-year degree.

As a result, neither side would officially confirm the signing prior to press time on Tuesday.

The MOU lays out the responsibilities each side will undertake so they can then sign a legally binding series of Intergovernmental Agreements (IGA) — sometime in the next few months.

A group of financial backers have already developed a construction plan for the campus geared for a fall 2012 opening. Privately, supporters say a fall of 2013 opening appears more likely at the moment.

Both sides say the agreement still faces challenges before either side can promise a campus. One big hurdle remains getting the Forest Service to quickly sell the land. In addition, major new ASU funding cuts could interject complications.

The agreement requires each side to get written approval from the other before releasing information. The two sides reportedly signed the agreement during the past few days, but haven’t yet decided precisely how to word the announcement.

Normally, the Roundup avoids basing stories on accounts by sources not named in the story. However, with rumors of a signing already rampant in town, the Roundup decided to report the signing, after confirming the broad details with sources at both Payson and ASU.

Signing the MOU represents the crucial next step in building a 1,500 to 6,000-student campus here, with tuition at least one-third lower than tuition on ASU’s Tempe campus – not set at nearly $9,000 annually.

Payson will reportedly agree to set up a Community Facilities District (CFD) to buy the 300 acres from the Forest Service and contract with developers to build classrooms and administrative buildings. The plans call for a “green campus” that would use innovative building design, solar cells and geothermal to actually sell electricity back to the grid.

The CFD would also contract with private developers, a hotel developer and others to build things like a conference hotel, a research park, some retail developments and other facilities to support the campus on about half of the 300 acres.

The MOU reportedly makes it clear that Payson, through the Community Facilities District, would be responsible for raising the money, then building the campus. That would include classrooms, dorms, administration buildings and the green energy facilities.

The money to repay the investors or pay off the bonds issued by the CFD would come from ASU’s lease payments and payments made by the other tenants. The CFD would also levy a property tax and collect sales taxes from the district — which would not affect taxes in the rest of the town.

Payson Mayor Kenny Evans has said previously that he has accumulated at least $500 million in commitments from financial partners, which includes about $100 million in donations.

Under the agreement, ASU would undertake a marketing and demographics study to determine the initial size of the campus. ASU would also develop a complete academic plan, which would determine what majors and degrees the campus would offer initially. ASU would not have to put up any money, except for the various studies and hiring the staff when the campus opens.

The students would pay tuition to ASU, which would hire all the faculty and staff — and basically lease the campus from the CDF on a long-term basis.

The current plans call for the other private business — like the hotel and industrial park — to also lease the land from the Community Facilities District, which would ensure that only businesses that dovetailed with the adjacent campus would operate there.

Payson officials have insisted on the use of the CDF to insulate Payson’s credit rating and taxpayers from any possible problem with the campus that would cause any of the partners or investors to suffer a financial loss.

The financial backers have been pushing hard to see the campus move forward, however, Payson and ASU have moved cautiously into the uncharted territory of the agreement.

The two sides had originally said they expected to sign the MOU back in March. However, state budget uncertainties and the legal complexities of the agreement between ASU and the legally innovative CDF resulted in additional delays.


Use the comment form below to begin a discussion about this content.

Requires free registration

Posting comments requires a free account and verification.