WINONA, Minn. – Financing for a new Winona State dormitory would be through the university’s fund-raising arm – the corporately separate but closely controlled WSU Foundation. It’s novel financing model that was used for university’s three-building East Lake dorm complex a decade ago. The arrangement angered local by landlords who claimed the Foundation’s tax status created an unfair advantage over their private-market rentals. The landlords went to court. Although the university prevailed, memories of the lawsuit and bad publicity still sting. The university is stepping cautiously to avoid angering landlords again. In an interview with the Winona Post, the university’s vice president for public relations, Jon Olson, said the new dorm would attract students to Winona State and created a demand for local rentals overall. “We’re actually bringing in more students to help fill in the apartments and units landlords have,” Olson said.

Model for future? Winona State’s stylish three-building East Lake dorm complex is on a Belleview Street stub seven blocks off the main campus. It’s popular and fills up with juniors and seniors.

Olson. As he sees it, Winona landlords shouldn’t see a new dorm as competition.

An alternative to state funding

State universities traditionally look  to  tax dollars for construction projects. This means, in Winona State’s case, going to the Minnesota State system and compete for dollars with 36 other campuses — and then, if the System gives a project a priority, going to the Legislature. It’s a fraught way to go in these days of declining enrollment. Is putting state money into new and better facilities  a good investment of tax dollars? The Winona State alternative is to take WSU Foundation funding for a new dorm and, un effect, repay the money through student dorm fee collections. It’s a convoluted bypass that has raised eyebrows, in the past, but it worked for the East Lake dorm project a decade ago.

The tax base objection

A second landlord objection to Winona State’s larger footprint was that it hurt city’s tax base.  The university is tax-exempt. Every time the university bought a lot to expand the campus, the city lost a source of property tax revenue. This, noted landlords, shifted the burden for running city government and providing public services to the owners of non-exempt property owners.

A flipside

A counter-argument to “campus creep” objections was that campus expansion eliminated lots of substandard housing. Much in those days was slumlord stuff. There were landlords who let old houses deteriorate but still rented them to bargain-hunting students – despite, among other things, inadequate heating. It may have seemed a good deal to a bunch of naive 20-year-old in September when they agreed to share the rent on a failing house near campus. Not so in February when they would wake up shivering in the morning and see their beath in the air.