What Makes Higher Ed Officials Think The REAC Building Will Succeed After Dumping It On The Taxpayers?


“In my 38 years in the legislature, this is one the most egregious examples of thumbing nose at a legislative directive. Period.”

That’s what state Senator Ray Holmberg, a Republican from Grand Forks, had to say about the North Dakota University System’s handling of the sale of the REAC Building from the now-defunct UND Research Foundation (controlled by UND administrators) to the University of North Dakota proper. The transaction was to be handled by the State Board of Higher Education per the Legislature’s direction, but it wasn’t. Instead UND officials were allowed to basically negotiate with themselves, and the taxpayers got the short end of the stick (while a major UND donor came out looking pretty good).

The REAC building has been a failure from day one. It opened in 2009, but to this day isn’t complete (there are still dirt floors in parts of the building), and it has never cash flowed. Not that you have to take my word for that. NDUS Chancellor Larry Skogen admitted as much to the State Board of Higher Education while apologizing for the way the transaction was handled.

Now Skogen and UND President Robert Kelly are telling UND’s hometown newspaper that they’ve got to make the REAC building a success.

Wile there is no plan for action, State Board of Higher Education Interim Chancellor Larry Skogen talked about the controversial purchase of UND’s biomedical research building and stressed the importance of “making it work” at an editorial board meeting Wednesday. …

UND President Robert Kelley said the facility, which has struggled to make a profit on UND’s campus since it opened in 2009, has hired a building director to attract enterprises, and there is a potential for one to move into the REAC in the near future, though nothing is final.

“That’s huge for us because they’ve got to pay the commercial rates for access to the facility for business development, which helps with cash flow,” Kelley said.

What makes Skogen and Kelly so sure REAC will be a success now that it’s under the taxpayer umbrella? Back when REAC was private (though you have to question whether or not any of these supposedly “private” spin-off foundations and corporations at the universities are ever really “private”), it didn’t cash flow. It left the UND Research Foundation with so much debt they were forced to unload the building on UND and fold.

You could argue that REAC won’t necessarily fail now that the taxpayers are obligated to prop it up, but it seems unlikely that it could ever be a success.

Which brings us to a larger point: When is anyone, anywhere, ever held accountable for these sorts of boondoggles?

It wasn’t just the dumping of the REAC building’s financial burdens on the taxpayers that was mishandled. This project has been an policy eyesore since day one, and it’s time people like Kelly took some responsibility for it.