The new Berkeley Aquatic Center

At least every few months, the Intercollegiate Athletics (IA) enterprise at my school gives us something new to be ashamed of.  This fall, it’s the opening of a new aquatic center, for about 120 letter athletes only, that commits a whole catalog of the typical sins of that firm [sic: it has it’s own .com website], and the injuries it inflicts on the university.

To start with, it’s in the wrong place, a large lot on a corner close to downtown that badly needs street activation, across the street from land uses (a track stadium and the existing aquatic center) that also don’t generate any foot traffic. The city fathers are furious that the university used this valuable lot for something that could have gone anywhere. For more on the location mistake, see Sam Davis’ takedown.

It has been touted, at a time when the cost of the IA program is attracting serious criticism, as being completely funded (about $15m) by the generous donors, and here we confront one of the most persistent qualities of IA, which is its insouciant, arrogant, mendacity, especially about money.  A building like this needs to be cleaned, heated, repaired and maintained.  It is actually rather expensive to keep a great big pool of water warm enough to swim in, outdoors in the climate of the Bay Area, and there are light bulbs to change, etc. A rule of thumb some institutions use for planning this is that maintaining a building requires an endowment approximately equal to the cost of the building itself.  At 5% return on such an endowment,  the new pool will cost the campus about $750K per year to keep the lights on and the doors open, or about four full professors.  Those light bulbs and gas bills will be paid for with real money.  You might think IA would pay for this, but that operation is already costing us about $30m a year in net subsidy, so even the part they might pay for directly just comes right back to the campus.

Completely funded by the donors? Let’s look at this again:

Donors gift (thank you)                           $7.5m

State and federal funds*                            7.5m

Campus gift of land                                     (10m)

Operation and maintenance                      (15m)

Total net                                                           ( $10m)

So “completely funded” actually means “paid less than a fifth of the cost, reached into our pocket and the taxpayers’ for about $17.5 million, and put a $750k/year tapeworm in our lunch.” Talk about leverage! Don’t you wish you could muscle your public agencies to house your hobbies at better than 5:1?

Just to add insult to injury, IA is going to give about a third of their exclusive time at our existing pool back to the other 40,000 citizens of the university for recreational use and physical education.

*the gift is a charitable deduction against state and federal income, and the donors are certainly in top brackets.




Author: Michael O'Hare

Professor of Public Policy at the Goldman School of Public Policy, University of California, Berkeley, Michael O'Hare was raised in New York City and trained at Harvard as an architect and structural engineer. Diverted from an honest career designing buildings by the offer of a job in which he could think about anything he wanted to and spend his time with very smart and curious young people, he fell among economists and such like, and continues to benefit from their generosity with on-the-job social science training. He has followed the process and principles of design into "nonphysical environments" such as production processes in organizations, regulation, and information management and published a variety of research in environmental policy, government policy towards the arts, and management, with special interests in energy, facility siting, information and perceptions in public choice and work environments, and policy design. His current research is focused on transportation biofuels and their effects on global land use, food security, and international trade; regulatory policy in the face of scientific uncertainty; and, after a three-decade hiatus, on NIMBY conflicts afflicting high speed rail right-of-way and nuclear waste disposal sites. He is also a regular writer on pedagogy, especially teaching in professional education, and co-edited the "Curriculum and Case Notes" section of the Journal of Policy Analysis and Management. Between faculty appointments at the MIT Department of Urban Studies and Planning and the John F. Kennedy School of Government at Harvard, he was director of policy analysis at the Massachusetts Executive Office of Environmental Affairs. He has had visiting appointments at Università Bocconi in Milan and the National University of Singapore and teaches regularly in the Goldman School's executive (mid-career) programs. At GSPP, O'Hare has taught a studio course in Program and Policy Design, Arts and Cultural Policy, Public Management, the pedagogy course for graduate student instructors, Quantitative Methods, Environmental Policy, and the introduction to public policy for its undergraduate minor, which he supervises. Generally, he considers himself the school's resident expert in any subject in which there is no such thing as real expertise (a recent project concerned the governance and design of California county fairs), but is secure in the distinction of being the only faculty member with a metal lathe in his basement and a 4×5 Ebony view camera. At the moment, he would rather be making something with his hands than writing this blurb.

8 thoughts on “The new Berkeley Aquatic Center”

  1. I think the total net should be $40m.

    "Changing the light bulbs" has become an obsolete example of maintenance costs, as LED lamps last for 100,000 hours or so.

    The new Terminal 5 at Heathrow offered a fine example of architects not joining up their thinking on maintenance. After a couple of years, the CFL or halogen lights needed replacing – on the underside of a large span of soaring curved roof. The airport had to hire a team of advanced mountain climbers to do the work, replacing the bulbs with LEDs.

      1. That's incomplete. The proper equation should be:

        $15m received – $15m construction costs – $10m value of land – $15m NPV of future maintenance costs = -$25m

          1. It is, but you have to include both the revenue and the expense in order to arrive at the net cost to the university. You have $40m on both sides:

            Donors: $7.5m
            State and Feds: $7.5m
            Value of land: $10m
            NPV for Operation: $15m

            Expenses and capital creation:
            Building construction: $15m
            Land: $10m
            NPV for Operation: $15m

            That gives you a net cost of $25m to the university. You can't ignore the $15m that was spent to build the building.

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