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Higher education leaders to testify on lab UND bought for $9.8M: Lawmakers to scrutinize deal, building occupancy

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GRAND FORKS — State higher education officials will testify to a legislative committee today regarding last year’s sale of a research facility to the University of North Dakota.

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The Research, Enterprise and Commercialization building, owned by the UND Research Foundation, was sold to the university for $9.8 million.

UND had asked lawmakers early last year to let it negotiate the purchase of REAC. Instead, the Legislature passed a law requiring the State Board of Higher Education to negotiate the building’s sale.

Sen. Ray Holmberg, R-Grand Forks, said it appears the board was not involved and the intent of the law was not followed.

Today’s hearing will be before the Government Finance Committee. According to the meeting agenda, the hearing will touch on broader issues regarding the financing and occupancy of REAC.

UND President Robert Kelley, State Board of Higher Education President Kirsten Diedrich and Murray Sagsveen, the North Dakota University System’s chief of staff, will testify today, according to University System spokeswoman Linda Donlin.

Questions

REAC was built at a cost of $16 million, with help coming from state, local and federal sources. Opened in 2009 with labs, offices and conference rooms for businesses and organizations involved in research, it was meant to be a “technology accelerator.”

By early 2013, UND was saying it would make more sense if the university ran the building.

“The ability to own and manage this facility within UND will create operating efficiencies, reduce costs, ensure ongoing stability in the operations of the facility, provide more seamless access and better enable partnerships,” Alice Brekke, UND’s vice president for finance and operations, testified before a Senate committee in February 2013.

The sale between UND and the Research Foundation took place in September.

Last month, University System Interim Chancellor Larry Skogen told Prairie Public Radio that “the state board had, in January 2013, delegated the authority to the chancellor to approve the process and any agreement UND came up with.”

“We have dotted all the I’s and crossed all the T’s on that,” he said.

Holmberg, who chairs the Interim Legislative Management Committee, shot back in an email to Government Finance Committee members, stating that Skogen “overlooks and ignores the facts.”

He asked the committee to look into the sale earlier this year.

The Legislature didn’t want UND to handle the purchase of REAC and passed the law to have the state board negotiate, he said.

Skogen approved the purchase terms and financing agreement in a letter to Kelley in late June, a few months before the sale was finalized, according to materials given to Holmberg by NDUS.

“It was a blank check authorization, absolutely contrary to good stewardship of public funds,” Holmberg wrote in the email to committee members.

UND spokesman Peter Johnson previously said UND paid market value for the building, as was determined in an appraisal completed in February 2013.

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John Hageman
John Hageman covers local business and Grand Forks' legislative delegation. Get more business news at aroundtown.areavoices.com. 
(701) 780-1244
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