It is 230 acres of some of the most valuable land in Louisville. Situated in the midst of commercial properties, new high end homes and prime real estate developments, three quarters of this property is green, undeveloped and a great place for people to walk their dogs. And it's owned by the University of Louisville. It's the Shelby Campus and while it has been a wonderful asset, it has been what we call "an underperforming asset" -- it hasn't been bringing in any revenue to UofL. Until now.
We're developing the Shelby Campus (calling the developed portion ShelbyHurst) as one of many strategies to generate income or cut costs to help pay for UofL's academic and research mission. As the state cut funding to UofL 14 times in the past 13 years, we've had to look for alternative ways to fund our programs and keep moving forward in a tough fiscal environment. We can no longer rely on state funding and tuition to pay the bills. In fact, state appropriations to UofL total $141 million, just 11 percent of UofL's total budget.
So we're being creative and using seven strategies to fill our financial needs:
• Utilizing underperforming assets like the Shelby Campus. The University of Louisville Foundation, in partnership with private developer NTS, has built and filled one new office building, is about to complete a second and has plans for at least one more.
• Increasing the value of intellectual property by putting money and other resources behind our faculty's discoveries and getting them to the marketplace
• Increasing clinical income through our medical faculty
• Utilizing private partnerships to operate our food service and build new student housing
• Using tax increment financing (TIFs) to spur development and generate income. In return for our investment in an area, TIFs send a portion of the new state and local taxes generated by jobs and new development to the university. The TIF around our downtown research park has been fully approved by Louisville Metro and the state of Kentucky governments. Its activation has resulted in payments totaling $11.4 million in the past two years. A second TIF district around our main campus has been approved but not activated and a third around the Shelby Campus is awaiting state approval. We expect these TIFs to generate hundreds of millions of dollars over their 30 year lives.
• Boosting fundraising with the completion of a seven year, one billion dollar capital campaign. UofL is just the 52nd public university to successfully complete a billion dollar campaign.
• Managing costs continues to be a top priority with $112 million in cumulative savings and efficiencies and more expected as we implement the recommendations from our 21st Century University initiative.
Some of these strategies will take time to pay dividends but we realize we must try new ways to pay for scholarships, support our faculty, fund our research enterprise and make infrastructure improvements.
The University of Louisville has been on an incredible trajectory the past 12 years - increasing our graduation rate more than 60 percent; graduating nearly 1,000 more students each year and more than doubling our research expenditures. We're not going to let financial limitations which are out of our control determine our future. We've taken matters into our own hands as we make the University of Louisville a "fully performing asset" to the benefit of our city, state and region.