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UPDATE: Wichita State to use financial aid money to lease from private company

The+Flats+at+Wichita+State+University+is+a+private-owned+apartment+complex+on+Innovation+Campus.+Aug.+14%2C+Wichita+State+announced+about+300+students+would+be+moved+from+Fairmount+Towers+to+the+complex.
The Flats at Wichita State University is a private-owned apartment complex on Innovation Campus. Aug. 14, Wichita State announced about 300 students would be moved from Fairmount Towers to the complex.

The Flats at Wichita State University is a private-owned apartment complex on Innovation Campus. Aug. 14, Wichita State announced about 300 students would be moved from Fairmount Towers to the complex.

Matt Crow

Matt Crow

The Flats at Wichita State University is a private-owned apartment complex on Innovation Campus. Aug. 14, Wichita State announced about 300 students would be moved from Fairmount Towers to the complex.

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Without state approval, Wichita State has entered an agreement to allow the use of students’ federal financial aid money to help pay for a lease on The Flats, a private apartment complex partially owned by the chair of the board of regents.

According to Vice President of Student Affairs Teri Hall, Wichita State will lease The Flats, which is a privately-owned building on Innovation Campus, from MWCB LLC, a company owned in part by David Murfin, the chair of the board of regents. Hall said that will allow students who receive financial aid to use that money to pay rent at the apartment complex. Wichita State will then use students’ rent to pay the lease to MWCB LLC. Any money collected that surpasses the lease price will be “profit for the university,” Hall said.

Murfin, the chairman of the board of regents — which will ultimately determine whether Wichita State can lease The Flats — owns 25 percent of the private developer MWCB, LLC, which owns The Flats. Murfin’s company has also been awarded contracts by the university-affiliated nonprofit Wichita State Innovation Alliance for other major projects on Innovation Campus.

“I assume something’s been signed, but I haven’t seen it yet,” Hall said Friday. Hall said aspects of the agreement had been reached while she was on vacation the week before.

Details of the agreement have not been disclosed to the public.

The university will move more than 300 students from university-owned Fairmount Towers to The Flats, a new private apartment complex on Innovation Campus that was struggling to attract students.

Kansas Board of Regents policy states public universities must receive board approval before they “enter into agreements, written or verbal or implied relating to private housing; give preference to any owner or operator of private housing; guarantee occupancy in or payments for private housing; or provide public funds for the supervision, maintenance or operation of private housing.”

In response to The Sunflower’s Kansas Open Records Act records request for any “documents related to authorization of operation of a private housing facility at Wichita State University by the Kansas Board of Regents,” the board of regents did not provide any documents approving Wichita State’s agreement to lease the complex from MWCB.

The board regents did send approval of the building The Flats on Innovation Campus from 2016, but under that agreement the apartment complex would be run like a private apartment complex. Now, Wichita State will run The Flats as if it’s a dormitory — and guarantee occupancy for the private building.

In June 2016, Wichita State requested authorization “to lease property to the Wichita State Innovation Alliance (WSIA) who will in turn enter into a 40-year ground sublease agreement with MWCB, L.L.C. to construct apartments with approximately 200 beds for upper level students.” The board authorized that agreement.

This June, the board of regents approved a campus master plan that included The Flats. The documents included no mention of Wichita State leasing the building from MWCB.

Wichita State has not responded to a similar request made by The Sunflower from the university.

The Flats was originally to become a private apartment complex on Innovation Campus. Hall said 48 — out of 280 — students had signed up to rent rooms from The Flats. The university announced Friday it would be moving 300 students from university-owned Fairmount Towers to The Flats.

Placing 300 students into a planned 280 student housing area will be accomplished by doubling the number of beds in certain rooms, Hall said.

Hall said students who signed up for The Flats will pay their agreed upon rates for rooms and all of the included amenities (such as underground parking and a full-sized bed). The students who were moved from Fairmount Towers will pay their agreed rate.

Fairmount Towers costs $4,380 to $5,900 for a school year. Nine months at The Flats would cost from $7,200 to $8,460 at its listed rates.

Announced rates at The Flats were criticised vehemently by several students, including by a February column in The Sunflower.

Brian Hayes
John Tomblin, vice president for research and technology transfer, speaks at a student government association meeting. Tomblin is the president of the nonprofit organization that manages Innovation Campus. (File photo; Mar. 1, 2017)

“I think your article’s wrong, and I don’t mind telling you,” John Tomblin said at a Feb. 23 Wichita State Innovation Alliance, Inc. board meeting of an opinion piece by The Sunflower that called the rent at the $938-a-unit apartments “too damn high.”

At that time, the university was not leasing the apartment complex from MWCB.

“One of the important things is we’re not on the hook if it doesn’t rent,” Wichita State President John Bardo said at the Innovation Alliance meeting. “If Shocker Hall doesn’t rent, we’re on the hook. If this doesn’t rent, the developers are.”

When The Sunflower was invited to ask questions about The Flats at the Innovation Alliance meeting, it asked about the agreement between the university and the developers to operate the private apartment complex. Wichita State President John Bardo shut the question down.

“We’ll stop here. This is a board meeting, not a question-and-answer session, so I think we’ll go forward with the agenda,” Bardo said.

“We have no risk,” Tomblin said after the board meeting. “So if it doesn’t fill and it’s a complete failure, I mean, we still own the ground and we’ll own what’s above the ground.”

Tomblin said the Flats being privately owned allowed the university to grow “without taxing the students, without taxing the state.” He said the university had no control of the prices set by the private company.

May 19, Wichita State announced rates at The Flats had changed in response to student concerns.

“No public or university funds or student fees are being used to finance the project. It is being developed by MWCB LLC. WSU is marketing the complex, and WSU Housing and Residence Life will operate the complex as a new option for on-campus living and to help streamline the application process for students,” the university announced in a May 19 statement about The Flats.

Now, depending on the details of the undisclosed lease agreement, it seems Wichita State is now “on the hook” for occupancy in The Flats.

Selena Favela
Teri Hall, Vice President of Student Affairs, poses with her Towson University Wordle.

The university also now controls rent prices for The Flats, Hall said.

“They’re kind of functioning as a landlord for us,” Hall said of MWCB’s role in the project.

“In most ways, we get to run it like a residence hall, without having to pay the bonds for it,” Hall said.

“It truly is better for students who receive financial aid to be able to have the property leased by the university so that their financial aid can be used there,” Hall said. “Because, otherwise, if it’s not leased by the university, it’s seen as an off-campus property, even though it’s truly not, and they can’t use financial aid, so this agreement really benefits more students.”

When questioned if that meant she thought students taking on more loan debt was a good thing, Hall said she was talking about students who receive grants and other forms of financial aid.

“My point is, if we didn’t lease this property, students couldn’t use that money in The Flats,” Hall said.

“We’re going to try to make this as smooth a transition as possible and try to make people as happy as we can,” Hall said.

Hall said this wasn’t simply a one-year deal that would disappear after closing Fairmount Towers.

“We’re committed to being able to offer reduced housing cost,” Hall said. “The guarantee is that we’re going to have these kinds of tiered levels so that students who want to double-up and save money are going to be able to do that.”

Murfin’s company has been awarded contracts for The Flats, Airbus, and a partnership building set to begin construction this summer. Murfin’s company was also awarded the city-county law enforcement training center through an agreement between the university-affiliated nonprofit, the City of Wichita and Sedgwick County, a process the county questioned as not going through the proper competitive bidding process required of city and state law.

A report from KBOR said that Murfin also owns three companies — Executive AirShare, LLC; Gladiators, LLC; and Air Capital Flight Line, LLC — that “have one or more working relationships with the University of Kansas, Kansas State University and Wichita State University or their affiliated corporations.”

A Jan. 4 article from the Executive AirShare, LLC website acknowledges its involvement with Wichita State Men’s Basketball recruiting, including an endorsement by men’s basketball coach Gregg Marshall.

Fairmount Towers is the third lower-cost student housing building to be closed under Bardo since 2012.

16 Comments
  • salty student

    Oh so many things wrong! Lets build dorms no one can afford. Oh darn, no one signed up. So lets preform some black magic so you can now afford it with financial aid.. student loans.

    STUDENT LOANS ARE NOT FINANCIAL AID NOR EVER WILL BE!

    What about the loss of income for WSU to pay back the bonds it already has??
    What if I want to use financial aid at other private apartments that are cheaper?

    I think Tomblin is too chicken to see the new private dorms fail!

    [Reply]

  • Risky Business

    It seems WSU now has ALL the risk with this. Next year if only 40 of the 285 leases are signed it would seem WSU is on the hook and not MWCB, LLC. If they weren’t signed last year, then why would they next year?

    How can Hall say it will be run like a residence hall without having to pay the bonds for it? The lease with MWCB, LLC is the same a the bond payment. Paying the $830,000 each year on the Fairmount Towers bond was like paying a lease for it.

    Can you get an interview with Tomblin now to discuss the past thought he had that your article was wrong? It would be interesting to see if he thinks a 13% lease rate proved the Sunflower right. It will probably be hard to get that interview.

    How can WSU say no public funds were used on marketing The Flats when the salary of the staff in Strategic Communications who helped market the private apartments were paid by public funds?

    [Reply]

  • Mr. Money

    Students need to band together to make sure football is not the next financial mistake to happen! With Fairmont towers out of the picture emporer Bardo can build a practice football field.

    We already pay $700/year for a basketball team from each student that takes 30 credits per year. WE WILL NOT PAY FOR YOUR ENTERTAINMENT!

    If the alumni want a football team then they will have to foot 100% of the bill for the eternity of the team.

    [Reply]

  • Turd burglar

    Wouldn’t this lower the value of the flats? What kind of self respecting 21+ year old would want to move BACK into the dorms? If anything this seems like plan B if no one moved into the Flats. It’s 320-450$ a month to live in a nice house in Bel Air or 450 to live a mile off campus at the 2909. Not 980 to be in pissing distance of a campus where you can’t even have a smoke at.

    [Reply]

    This is the worst administration ever. Reply:

    Every new bad decision made by the people making all the decisions at WSU makes me so angry. Why are they so powerful? There has got to be a way for everyone else (more of us) to take back the power.

    I’m getting really sick of this. What can be done? How do we stop them? How do these people ever get fired?

    This is disturbing…

    [Reply]

  • Steve

    Can anyone explain Bardo’s fetish for football? His obsession with it is a form of mental illness IMO. And why would anyone believe him when he says that it is the magic needed to grow enrollment. None of Bardo’s ideas have produced any tangible results. When will the media start calling him out on his BS? I also don’t understand why King Bardo didn’t get a job at a university that is more to his liking. He is clearly hellbent on transforming WSU, when many current students and alums don’t feel like it needs the changes he is demanding. WSU will never become what Bardo wants so he should just go work for a school with a football team and students from wealthy families living in overpriced dorms, happily paying hundreds of dollars per year for sports, private gyms and many other non-essential luxury items. Bardo is going to kill WSU with his attempts to make it into a cut rate version of an SEC school. I wish he would just leave and take his horrible ideas, bigoted point of view and dictatorial mindset with him. Why can’t the university hire a President that grew up in Wichita, comes from a middle class family that is typical for the area, understands the commuter nature of the school and the importance of keeping costs as low as possible to allow access for the many first -generation and low income students that choose to attend WSU?

    [Reply]

    The math man Reply:

    Some things you may not know, a lot of scholarships that used to be available have run out of money to make room for the merit based scholarships that give out of state students more financial aid than students who grew up in Kansas. I personally received letters from scholarships I used to get from the university saying that they ran out of money and I would no longer be receiving them. I’d bet a good percentage of Bardo’s supports are out of state students who are on this new merit scholarship system.

    Truth be told, I couldn’t find any advising help my senior year and I refused to just graduate from WSU to become a home depot cashier , so I left WSU for Kstate. I spent a several months at work asking customers: where they went to school, what degree they got to become “successful”, and would they recommend going back. I received an overwhelming response from K-State graduates, not so much from WSU graduates. So, I went to K-state and completely redid an undergraduate degree (graduation set for may 2018, 7 years and estimated $46,000 loans borrowed including interest by the time I graduate) so I can have a shot of being apart of middle class society with a really bright future in power engineering. I really would like to see WSU improve, but this is not it.

    I know of other Wichita families sending their kids to Kstate because of better financial aid and cheaper on campus living. That’s not to mention that KU and K-State have tremendously better advising and help for first generation students. (K-State is still considerably cheaper than KU). Graduation statistics show first generation students are more likely to drop out/leave WSU than graduate in 6 years. The opposite is true for K-State and KU.

    In the mean time, I sit back and watch as some of my friends who started out with me in the dorms struggle to find advisors/ professors on campus to help them do something useful with their degree, or even tell them alternative routes such as a trade.

    I had “STEM” professor confidentially tell me that a decision came from administration to intentionally keep class sizes low in order to make students take other classes that cost the university less money to teach (i.e think freshman-early junior science classes that require a lab). This way students end up staying longer.
    Academically speaking, WSU is not the shining beacon on a hill.

    [Reply]

  • Steve

    I suggest to anyone that asks that they avoid WSU and go to school somewhere else. Butler CC offers the same quality of academics for a fraction of the cost and the hassle factor is substantially less. Do your two years at Butler and transfer to a university like KU or K State to finish your degree. With the ever increasing cost of attending WSU, there simply is no longer a place for WSU in the market. Despite what Bardo and his Executive Team seem to believe, the majority of students at WSU will always be commuters looking for a low-cost option to obtain a degree close to home. Instead of wasting millions on new buildings, unaffordable housing and sports teams, WSU should be adding massive amounts of parking and looking for ways to reduce tuition and fees. WSU’s niche is as the low cost leader in state university education. Once it costs as much to attend WSU as KU or KState, it is just a matter of time until WSU fails completely. Pretty much the only reason people attend WSU is so they can live at home and spend the least amount of money possible for their degree.

    [Reply]

  • Financial Aid???

    The comments about use of financial aid do not make any sense. Students can always use financial aid to pay for housing.

    WSU creates different budgets for on and off campus housing living. Students’ aid packages are based on what is called full cost of attendance. It is what athletic scholarship amounts are based off of.

    If The Flats were still a private apartment complex, students could still use financial aid to pay rent. Students’ aid would be credited to their accounts and WSU would remove the tuition and fee amounts. Students would then get a refund check with the remaining amount of aid that they could use for rent, groceries, or miscellaneous expenses.

    This is just like athletic scholarships where part of the athletic scholarship covers tuition and fees and they get a check for the rest of their award. They then use that to pay rent at their off campus apartments.

    This is the same way academic scholarships work for those that are full rides.

    If the claim is that WSU had to lease the property from MWCB, LLC to use financial aid to pay rent, that is not accurate. It simply pays the university first before refund checks are sent to students to pay other costs of their education.

    Students living in other off campus apartments can use their financial aid refund checks to pay monthly rent. Using this as the excuse/reason to say WSU had to lease from MWCB doesn’t make sense.

    [Reply]

    Fake Pres. Bardo Reply:

    I want those students to get off my practice football field! Err I mean.. students to pay for my innovation campus. No wait… its to expose students to higher living standards so anyone with a scholarship that requires them to live on campus can have the most luxurious apartment.

    Ha! soon ill be able to use the flats as a recruitment resource to get a good quarter back and use football scholarships to rent out the flats. umm.. wait….. you didn’t hear that? If you repeat it anywhere on campus I will make sure you resign from campus. Got it?

    -As always
    Fake Pres. Bardo

    [Reply]

  • Steve

    The claim that WSU had to lease the property to use financial aid is the typical Bardo BS. Students have always been free to spend any financial aid that they receive beyond the cost of tuition on private housing. As the other poster said, they would get a refund check from WSU and be able to use it anywhere they choose. Teri Hall’s statement is misleading and deceptive. What she really means is that the only way to be sure that the financial aid would flow to the development company that built The Flats is for WSU to sign the lease. If they had simply closed Fairmount and given students the option to live at The Flats, a large amount of that financial aid money would have been spent at other apartment complexes that aren’t paying a kickback to Tomblin. This is all a huge scam designed to make sure that federal grant/loan funds end up flowing to the right people.. I think it was also planned this way from the very beginning. Nobody in their right mind thought students were going to fill that building up at those absurd lease rates. I think the WSU admin wanted the building to be empty so there would be less resistance when the real plan was rolled out.

    [Reply]

    Concern Reply:

    It is concerning that Teri Hall does not realize a contractual lease payment to MWCB is the same as a contractual bond payment. It is also concerning she does not know financial aid can be used to pay rent at private apartments. The benefit of using financial aid to pay at The Flats is all for the benefit of WSU and not students. By putting the housing bill on the student’s WSU account WSU is paid first AND they are paid for an entire semester all at once. How many people pay their mortgage or rent for a half year at a time instead of month to month? WSU is getting the rent a half year at a time by doing this and students lose the ability to pay monthly and control their funds.

    [Reply]

  • Fake Pres. Bardo

    Now students, I’m sorry that I moved you and all. Your room will probably be smaller at the flats than at Fairmont since you have to double up , on the bright side you will get a kitchen and your RA wont have much say so about what you do, so bring all the booze you want. CHEERS!

    Next we are going to play a game called “stuff the dorms”. In this game you will collect football equipment , put it in Fairmont Towers, and will donate it to needy universities err.. children. Ready? “Down. Set. Hik…” I mean Go!

    While you’re at it, make sure to buy some coffee to help out innovation campus!

    Thanks,
    -Fake Pres. Bardo

    [Reply]

  • Steve

    It seems like a lawsuit is inevitable at this point. The people that own other apartment buildings in town can’t be pleased that Bardo thinks he found a way to route a substantial amount of financial aid money straight into the pockets of his preferred developers and also get to keep a nice kickback for himself and Tomblin. The corruption was always evident in the way Innovation Campus was being built but this takes it to another level. Did anyone actually ever believe that Airbus moved their operations to campus because they love it so much and the 21st/Oliver area is so much nicer than where they were before? Follow the money, Tomblin and a member of the Board of Regents are making out like bandits while they drain taxpayer money into private hands and bribe businesses to sign leases with details that are not released to the public. All of this while tuition and fees are increasing, funds can’t be raised for academic facilities like a new building for the business school and enrollment continues to decline.

    [Reply]

  • Fake VP Heldman

    Steve,

    I am sorry you feel this way. We did other studies than the three official ones and the results said this would all work out. We did them at Starbucks at the drive through. We had to move students over so at least one building at Innovation Campus isn’t empty. AAC! AAC! Helmet tweet coming soon!

    [Reply]

  • Sarah

    Thanks for the information provided!

    [Reply]

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