CORRECTIONS APPENDED SEE BOTTOMThe University's fundraising efforts to make up $89 million in projected gifts for the construction of the new Carl J. Shapiro Science Center and the new Ridgewood Quad have been slowed by the recent economic downturn, Executive Vice President and Chief Operating Officer Peter French said at a press conference for campus media last Thursday.

French said that the University planned to take out $100 million in debt over three years to accompany the fundraising used to finance the Science Center and Ridgewood. The Board of Trustees approved the plan in November 2005. This plan anticipated $80 million in debt and $74 million needed in gifts to fund the construction of the new Shapiro Science Center, along with $20 million in debt and $15 million in gifts to fund the construction of the new Ridgewood Quad.

In accordance with this plan, the University took out $60 million in debt in 2006 and $40 million last August to fund both construction projects, French said. According to Vice President for Financial Affairs and Treasurer Maureen Murphy, an additional $5 million in "project costs" was incurred along with each of these loans.

The University currently has $65 million in gifts and future commitments intended for the Science Complex Renewal project, Vice President for Capital Projects Dan Feldman said, adding that the University is still in the process of fundraising for the new residence quad. The University has, however, paid all the bills for the construction, he said.

The downturn in the economy has slowed the University's plan to make up the projected $74 million in gifts for the Science Center and $15 million for Ridgewood Quad, as the school has received less than it predicted in fundraising and grants due to the troubled economy, French said. "The economy has also impacted the amount of money that we're having to allocate for financial aid, and it is putting pressure on the budget," he said. "As part of the plan, we had made assumptions about gifts that would support the operating budget, and we've seen donors impacted in terms of their ability to meet those obligations."

However, Murphy explained, "There's not a direct correlation between the budgeting gap and the debt that we took out." She later noted, "If you had known four years ago what could have happened today, would we have planned differently? Maybe."

French said the University had reduced its projection of gifts from $14 million down to $10 million for this year. "We've also had an assumption that we would have about $15 million a year in money that would go into the endowment to help build the endowment, and it's been very, very difficult . to expect that we'll meet that, and that's going to impact how much revenue we have," French said. He said at last Thursday's campus media conference that the debt, endowment and gift revenue funds are interconnected and affect each other in University finances.

"Debt has not been used in anticipation of gifts," French stressed. "The debt has been used to finance capital projects pursuant to a plan that included both debt and gifts." He said the University had been working on bringing that debt down. Repayment of the debt is part of the University's plan to balance its budget as a whole, Murphy said, and includes all sources of revenue for the University. "There's not a one-to-one source," she said.

Murphy said the University's scheduled debt payments have not been directly affected by the economy because the University took out fixed-rate debt, whose payments had been planned far in advance of the economic downturn. "It was actually hugely to our benefit that the rate didn't increase," Feldman said. "It hasn't become a burden by virtue of the economic downturn," Feldman said, adding that many colleges and institutions were adversely affected.

-Hannah Kirsch and Mike Prada contributed reporting.

Editor's Note: A new version of this story and a new headline have been posted due to factual errors regarding the economy's effect on the University's debt. The University is in the process of paying back its debt, and the economy is affecting the fundraising efforts for the projected gifts. The article is how it appears in the print edition. The Justice regrets the error.