West Virginia University

Good money from not-so-good benefactors: Part i

13 September 2009

On Friday West Virginia University announced a $1 million gift for energy research from Robert and Brenda Murray. The gift will be matched by $1 million from the Legislature’s $50 million Research Trust Fund. According to WVU’s press release, the funds will be used for a good purpose: “research on safer, more efficient and cost effective ways to use fossil fuels.”

Bob Murray is the President of Murray Energy Corporation. Murray Energy owns Utah’s Crandall Canyon mine, where nine people lost their lives in August 2007. You may remember that Mr. Murray initially came across as a sympathetic character in media broadcasts, but opinions changed as the investigation unfolded and it became clear that the accident was the result of serious safety violations and $1.6 million in fines were imposed against the mine operator.

As you would expect, WVU accepted the money and said nothing about Mr. Murray’s controversial past. I think they did the right thing.

Beer: It really won’t slow you down

8 September 2009

There continues to be little for West Virginia University to cheer about in terms of college rankings.

U.S. News and World Report places WVU in the third tier (of four) among national universities and its law school in the third tier among all law schools. (WVU’s law school was in the fourth tier a few years ago, so this is progress.)
The Princeton Review ranks WVU sixth nationally in terms of partying and eighth in terms of beer affinity. Apparently seeking to add a little humor to the discussion of partying and beer affinity, the Quick and the Ed blog recently published the graduation rates of the Princeton Review’s beer-loving and beer-hating schools and found that students at beer-loving institutions had an average six-year graduation rate of 77.5 percent, while those at beer-hating institutions had a 63 percent graduation rate. The one anomaly among the beer-loving schools: WVU with a 55 percent graduation rate. (Partying schools, by contrast, had lower graduation rates than non-partying schools thanks in part to WVU’s lower-than-average graduation rate.)
The Washington Monthly ranks schools in terms of their contribution to the public good: (1) Social Mobility: How well do colleges perform at recruiting and graduating low-income students?; (2) Research: How well do colleges do at producing cutting-edge scholarship and Ph.Ds?; and (3) Service: Do colleges encourage students to give back to their country? Where does West Virginia University rank among national universities? 162 out of 258. Interestingly, WVU does a slightly better-than-average job of graduating students when one considers the percentage of students receiving Pell grants. Where does West Virginia University do really badly? In federal work-study funds spent on service and in faculty both receiving significant research awards and in the National Academies.

So how will West Virginia University rank in the soon-to-be-released National Research Council (National Academies) rankings of various graduate programs, which are widely considered to be the most statistically rigorous and credible rankings around? You don’t have to wait for the results. I provided the answer on 26 June 2009.

Tagged with: Higher Education • Research • West Virginia University

Lessons from the i.v. league: Part i

16 August 2009

The August issue of Vanity Fair contains a must-read article for all higher education trustees and institution and foundation administrators about Harvard University’s endowment implosion. Although Harvard is a a great distance both geographically and academically from most West Virginia higher education institutions, there is much to be learned from the Harvard experience.

Lesson No. 1: If investment returns sound too good to be true, they are.

Harvard University got used to double-digit endowment investment returns throughout the early part of this decade and believed they would continue forever. But at one point last year, Harvard reported an $8 billion, or 22 percent, loss in the value of its endowment over a four month period. To put that number in perspective, it’s more than 40 percent of West Virginia’s ENTIRE state budget if you include everything from federal revenue to special revenue like West Virginia higher education’s total tuition and fees. Why did Harvard go from doing so well to doing so badly so quickly? It was investing significant amounts in high-risk/high-return activities (e.g., high-tech start-ups, credit default swaps, cross-currency swaps, venture capital funds, junk bonds). What has Harvard had to do to address this crisis? Sell off parts of its investment portfolio at bargain basement prices and seek bonding at the worst possible time financially – December 2008. One commenter characterizes the situation in which Harvard finds itself now as a “death spiral.”

In Senate Bill No. 603 (2005), the West Virginia Legislature gave West Virginia University and Marshall University authority to invest a portion of their state funds through their foundations instead of through the Treasurer’s low-risk, low-return options. Both institutions were slow to take advantage of this flexibility, but ultimately did so – and, I’m pretty sure, have lost money as a result. The greater flexibility couldn’t have been given at a worse time for those two institutions.

Lesson No. 2: Build what you can afford.

Harvard University initiated an overly ambitious building program, which included construction of a $1.2 billion science complex, that had to be halted. To put this last amount in perspective, the proposed cost is about twice the ENTIRE annual state appropriation for West Virginia’s higher education system.

Have any West Virginia schools engaged in an ambitious building program that has proven difficult to pay for? Yes – Fairmont State University. The debt was undertaken assuming that more students would enroll and thus help shoulder the increased debt. Shortly after the debt was incurred, enrollment began to drop – stretching the University’s resources.

Tagged with: Fairmont State University • Marshall University • West Virginia University

Chemical peel, anyone?

28 July 2009

Last week I wrote about the struggles of Kinetic Park in Huntington with its dermatologist anchor-tenant and indicated that I would write about the struggles of two other research/technology parks in the new future: the Dow Technology Center in South Charleston and the West Virginia University Research Park in Morgantown.

On Sunday, Charleston Gazette reporter Eric Eyre wrote about the Dow Technology Center. The article was titled “Supporters try to save South Charleston Tech Park,” which says about all that needs to be said about the current status of the Tech Center.

Unlike Kinetic Park and the WVU Research Park, which have never succeeded in getting off the ground, the Dow Tech Center has a storied past. Located on a relatively flat area between I-64 and Corridor G in South Charleston, the Union Carbide Tech Center opened in 1949; employed as many as 3,500 chemists, technicians, researchers and engineers in its heyday; and produced more than 30,000 patents worth $18 billion, according to the article. Intriguingly, this was done in an area without a research university or a significant educational pipeline of science, technology, engineering and math (STEM) graduates. (Nearby West Virginia Tech produced engineering graduates, but not in the quantities or advanced degrees needed to support a major research facility.)

Over the last several decades, the South Charleston Tech Center has fallen on hard times. With the exception of the Mid-Atlantic Technology Research and Innovation Center (MATRIC), with about 150 employees, not much remains of the Tech Center. The article quotes a MATRIC employee as saying: “There’s a lot of intellectual capital left in the valley. This is an ideal place for technology development. It’s like Research Triangle Park in North Carolina.” I don’t think this assessment is correct. While Union Carbide invested millions, if not billions, of dollars in the Tech Center and brought smart people from all over the nation and world to the Kanawha Valley, it is very unlikely that another private sector entity would do the same. Why not?

Intellectual Capital. Unlike Research Triangle Park, which is surrounded by Duke University, the University of North Carolina and North Carolina State University, the Tech Center is surrounded by West Virginia State University and the University of Charleston, neither of which has the kinds of strong STEM programs needed to support the Tech Center, and West Virginia University Institute of Technology, which has some of the programs, but is struggling at best, dying at worst. Furthermore, WVU-Tech’s last foray in the direction of the Dow Tech Center was an unmitigated disaster; just ask the “Take Back Tech” folks.
Environmental Issues. Having been aware of at least two efforts to assess environmental conditions at the Center, I know there are widely divergent opinions. Clearly, there are serious environmental issues associated with a sediment pond on the property. Beyond that, some people think the site is quite habitable. Regardless, any time an environmental cloud hangs over a piece of property, it presents serious challenges for any marketer of that property.
The Owner. Dow Chemical, which owns the property, faces a financial dilemma. It has a series of old buildings on property that is of little use to it now, and there’s no single buyer on the horizon willing to take all the property off its hands. So rather than continue to maintain buildings that are partially occupied, Dow is beginning to level them to reduce maintenance costs. Additionally, Dow is not the easiest company with which to deal on property issues, I have been told.

Keeping with our dermatological theme, can West Virginia University and/or Marshall University provide the necessary chemical peel? No. Neither institution has the critical research mass needed on its home campus. If significant institutional resources were redirected to South Charleston, it probably would weaken both institutions’ current research-building efforts. Additionally, there is little likelihood of a new infusion of external resources at either institution to support such an endeavor.

Can West Virginia’s state government provide the necessary chemical peel? Not without taking an incredible risk. If the property ended up in the hands of the State, the State also would inherit a set of old facilities that need to be maintained and some serious environmental questions. Additionally, the State would have to find a significant number of new tenants for the site. All one has to do is tour facilities on the Capitol Complex to appreciate what a poor landlord the State historically has been.

What’s the best-case scenario? Create a consortium of educational and private sector organizations in addition to MATRIC to serve as anchor tenants at the Tech Center. On the education front, create a higher education center, much like the one in Beckley, which has the potential to thrive and grow, and locate the Kanawha Valley’s new Advanced Technology Center on the site. On the private sector front, market, market, market the Center to anyone and everyone who might have the slightest interest. It’s a long shot, but I think it’s probably the best shot we have.

Tagged with: Higher Education • Kanawha Valley • Marshall University • Research • University of Charleston • West Virginia State University • West Virginia University • West Virginia University Institute of Technology

Heartbreak of psoriasis

23 July 2009

Yesterday WSAZ-TV reported on Kinetic Park in Huntington. As originally envisioned, Kinetic Park was to be a technology park closely connected to Marshall University. Today only a dermatologist’s office and an accounting firm reside on the upper level of the site. Surrounding them is the West Virginia equivalent of sagebrush.

The strangest part of the WSAZ story concerned site infrastructure. Dr. Susan Touma, the on-site dermatologist (an anchor tenant for nerdy technology types?), told the reporter: “We had phone lines put in and a lot of different other things that weren’t in place.” WSAZ went on to report that contractors were just laying cable for TV and high speed internet access yesterday. How on earth can you claim to have a technology park when you don’t even have high speed internet access available on your site? I had always assumed that Kinetic Park had not succeeded because of the lack of needed entrepreneurial talent in Huntington. Now I learn it may have been the lack of internet?

Before anyone in Morgantown laughs about the plight of Huntington’s Kinetic Park, please take a tour of the West Virginia University Research Park on Route 705 in what otherwise is a booming area of Morgantown. According to a November 2002 WVU press release about the Research Park, then Vice President for Research John Weete said: “It is fully expected that the WVU Research Park will become a self-sufficient, cost-effective, world-class center of research, technology development, commercialization and business activity resulting from strong links between the park occupants and the intellectual capital of WVU” … in “multi-tenant buildings totaling approximately 650,000 square feet of space.” This quote is not intended to be a clue to help you locate the site. All I can say is: Look for the West Virginia equivalent of sagebrush. If any place has the sagebrush market cornered, it’s West Virginia University’s Research Park.

As someone will surely tell me, the heartbreak of psoriasis is no laughing matter. We need to figure out why Kinetic Park, WVU’s Research Park and the Dow Technology Center in South Charleston are in their present conditions and what, if anything, we might be able to do to change it.

Tagged with: Higher Education • Huntington • Marshall University • Morgantown • Research • West Virginia University • WVU Research Park

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Good money from not-so-good benefactors: Part i

Beer: It really won’t slow you down

Lessons from the i.v. league: Part i

Chemical peel, anyone?

Heartbreak of psoriasis

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