If They Build It, U Will Pay

Flawed contracts. Cut corners. Inadequate inspections. Complaints about conflicts of interest. University of Minnesota president Mark Yudof might be getting out just in time.


On June 13, Mark Rotenberg and Gail Klatt delivered their department's findings at a joint meeting of the Board of Regents' audits and facilities committees. The presentation didn't cover all the recommendations. With some 75 separate proposals, Rotenberg noted, that couldn't be accomplished in the allotted time. But the call for "very significant improvements" in how the U handles its construction projects was hailed by some regents as both necessary and overdue.

"It was really clear to me in reading these reports that, frankly, there has been terrible mismanagement," said Regent Frank Berman. Berman, who is a Twin Cities attorney, expressed particular concern about conflicts of interest in the awarding of university contracts. He pointedly asked Rotenberg whether there was evidence of "personal relationships" between any university management and Armlin North Associates, the consulting firm hired by the U to help with Coffman and Riverbend. Rotenberg answered no, then reiterated a statement from earlier in the meeting, that his office's review of construction activity found "no evidence of criminal or civil misconduct by any University of Minnesota employee." (Rotenberg did acknowledge that a former associate interim vice president for University Services, Pamela Beader, had not cooperated with his inquiry. After leaving the university last June, Beader went to work briefly for Armlin North, then joined her former boss, Eric Kruse, at his startup consulting business, the Pegasus Group.)

As the meeting wore on, several regents questioned whether the U should discontinue its use of design-build altogether. Regent Anthony Barga said that after three years, he had grown "very skeptical" about the value of the approach. "The more I understand, the more hazards I see," agreed Berman.

The normally unflappable Yudof appeared vaguely miffed when the U's construction practices were characterized as problematic. On several occasions during the hourlong meeting, the outgoing president specifically defended the use of design-build. He pointed to the successful renovation of Murphy and Ford halls. He also pointed out that when the U resorted to design-build for Coffman and Riverbend, it was only because the projects were bid conventionally and came in over budget. "In my judgment, our experience has been pretty good with design-build," he said.

That Yudof might seek to temper criticisms is understandable. College presidents are often remembered largely for what they do or don't build. In 1988, for instance, university president Ken Keller was forced to resign in the wake of a scandal over excessive spending on renovations of Eastcliff, the presidential mansion. In his five years at the U, Yudof has never been accused of impropriety. To the contrary, his brick-and-mortar accomplishments have been the subject of innumerable public hosannas, just as his imminent departure has been widely lamented.

Now, however, his legacy has an added dimension. As he leaves for Texas, having presided over the biggest building boom in the U's history, the dismal task of overhauling the U's construction practices awaits his successor. And tough questions, once just muttered behind the scenes, are likely to be asked more and more: Did the University of Minnesota get a decent deal for its dollar? And if they didn't, who will pay the price?

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