MCCC’s new geothermal heating/cooling project lost some steam this fall when the plan for financing fell through.
Bank of America, which had considered lending money for the $17 million project, backed out, said Jack Burns, MCCC’s director of Campus Planning and Facilities.
"There’s a few reasons why, and one of them is because we’re in Michigan and any kind of big investment in Michigan is seeming kind of risky right now because of Detroit," he said.
"Detroit has kind of given the state of Michigan a bad name as far as credit."
Burns added that MCCC has borrowed very little in the past, so it has little credit history, which is unsettling for larger investors.
When the Career Technology Center was built in 2013, for example, it was half financed by state money, with the rest coming from the college’s reserves and a capital campaign. As a result, the college never took on any debt, Burns said.
"And then our enrollment dropped," Burns said, giving financial institutions another reason to be nervous.
"Even though if you look at the way we’re funded, most of our budget comes from property taxes," he said. "The second biggest part of our budget is from student tuition and the third is from state appropriations."
Burns said banks were hesitant about our ability to pay back the money we borrow for the heating-cooling renovations, but this hasn’t affected his confidence in the project.
"It’ll get there, I’m confident. We’re just in a little delay," he said. "We will probably end up having to rent another temporary chiller next summer because of the delay, but other than that, we’ll be good."
Burns says the college is working with a smaller lending institution that would bring in other banks to share the financing, but this doesn’t really change anything for the college other than some additional paperwork.
"It’s good, because hopefully that way we can have more of a local presence," Burns said of working with a new lender.
The new system is needed because MCCC’s cooling system gave out last year, and the heating system is long past its normal lifespan. The MCCC Board of Trustees decided in July to replace both with a new system that will use geothermal energy.
Burns clarified the order of the planned renovation projects. He said work is scheduled to begin on the Administration building’s culinary hallway during the break between fall and winter semesters.
The project will halt during the Winter, but may pick up sooner depending on the weather. Indoor work will resume with the East and West technology buildings a week after commencement in May.
The air handling systems will be shut down while being replaced in Campbell and Administration buildings, so all business in these buildings will be relocated. The library, book store and copy center will have temporary cooling to protect the books, paper and general merchandise from the unconditioned air, Burns said.
As the crews become familiar with the process, time spent on each project may shorten, Burns said. Things might adjust in the timeline, so the schedule will remain flexible.
The first phase of the heating-cooling project will be drilling a well field for the geothermal system behind the solar panels east of campus. This is still planned for this year, but has been delayed past its initial Oct. 1 scheduled date, Burns said.
The plan is for the East and West Technology and Campbell buildings to be fully open before the 2016 Fall Semester. The Life Sciences and Administration buildings may finish a few weeks into the Fall Semester.