EWCHEC Still Seeking Investors
A year ago, banks were lined up to loan money to help build the East Williamson County Higher Education Center. Now there are only a few takers who are even entertaining the thought.

Plans for phase one of EWCHEC project — the construction of a $7.5 million, 25,000 square-foot statement building — are nearly done, but the market slump is preventing further action to build it.

“All the work is ready. We just need a lender to step up and say, ‘Here’s the terms,’ and to sign the contracts. Then we’re off to the races,” EWCHEC executive director Chuck McCarter said.

Each of EWCHEC’s financial partner institutions — Taylor ISD, Texas State Technical College, the Taylor Economic Development Corporation, the City of Taylor and the Temple College at Taylor Foundation — have signed on to contribute to the debt service after the facility is built, but banks are still hesitant to loan for the project.

The partners will pay their portion of the debt each year over a 20-year period following the date of the loan.

However, each of these partner institutions is managed by a board of directors, and some banks see the inevitable changes in personnel over the next 20 years a high risk for the $7.5 million principle, McCarter said.

“The majority of our financial partners need to reappropriate every year,” McCarter said. “You’ve got a board that says we’re committed to this every year for 20 years, but no board is going to remain intact that long. Some lenders are not as shy with that as others would be.”

In addition to this problem, EWCHEC directors are seeking their own specific terms to keep their investment affordable in the long run.

“What we’re looking for is a 20-year loan at 5 percent (interest) or less that’s tax exempt,” said John Nelson, consultant for the Temple College at Taylor Foundation. “There are those who are willing to lend us the money at 10 percent, but that’s not something we want to get into.”

Banks are hesitant to agree to EWCHEC’s terms and take the risk in the volatile market, Nelson said. Most banks are remaining conservative.

Once the facility is built, students taking classes at EWCHEC will pay to Temple College a “building use fee,” which will go to the TCAT Foundation to also help service the debt. This is a typical model to erect new educational facilities, Nelson said, and the same arrangement that was used to build TCAT 12 years ago.

The EWCHEC board attempted a bond offering last August to raise the $7.5 million, but they could not find any party interested in funding the bond. If the market strengthens, the board may consider selling bonds as another option, Nelson said.

The plan is on hold for now, with phase one projected to begin only after a lender is found. The second phase — an advanced technology center — is scheduled to begin in 2011 or 2012.

The total EWCHEC project will consist of seven or eight buildings across the campus south of Carlos Parker Boulevard.

“We’ve got a plan for growth, but we’ve got to get this first domino to fall,” McCarter said.