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Construction of a new engineering hall on Iowa State University’s campus will continue as designed, but at a significantly higher cost than originally expected.
The Iowa Board of Regents on Thursday approved a new budget for construction of the Therkildsen Industrial Engineering Building — now at a cost of more than $73 million instead of the $54 million approved early in the summer.
The regents on June 2 approved the new four-story building for the industrial and manufacturing systems engineering departments. It will be located northwest of Beyer Hall, 2625 Union Drive.
At the time of approval, $42 million had been donated by two class of 1959 alumni, C.G. “Turk” and Joyce A. McEwen Therkildsen, whom the building is named after.
The rest was to be covered by university funds.
More:Iowa State releases new 30-year plan for its buildings, including demolitions, new construction
Heather Paris, the university’s interim senior vice president for operations and finance, told the regents’ property committee this week that when construction proposals were received in August, the projected costs were much higher, reflecting current regional trends.
The original budget predicted a 10% cost increase compared to 2021 prices. But proposals came back last month with a 25% increase, with construction costs alone raising from $39 million to $59 million.
Iowa State officials are now determining how to make up the shortfall.
“Fundraising efforts are ongoing, which will determine how much of the increase will come from private gifts and university funds,” said university spokesperson Angie Hunt.
Construction prices across the US have been rising for years for a number of reasons, including demand, inflation, pandemic-related restrictions, supply chain disruptions, labor shortages and the war in Ukraine, according to CBRE, which tracks the market.
Its construction cost index forecasts a 14.1% year-over-year increase in construction costs by the end of 2022.
Steel did get cheaper in August but concrete continues to be more expensive, according to the latest Producer Price Indexes report from the Bureau of Labor Statistics.
Public and private projects across central Iowa have been feeling the effects of rising construction costs, including schools — with a planned elementary school in Waukee seeing a 50% cost increase compared to another school built with a similar design there just over two years earlier.
Iowa State, the University of Iowa and the University of Northern Iowa have together asked the Board of Regents for an additional $32 million in appropriations for the next fiscal year, citing record inflation and seeking to pay for more support for first-generation college students and workforce expansion, among other programs.
Regents approved the appropriations request on Thursday, with an amendment that added $1 million in funding to the board office to allocate to the universities for expanded mental health services.
More:Citing inflation, Iowa’s universities ask for $32 million more from Board of Regents
Phillip Sitter covers education for the Ames Tribune, including Iowa State University and PreK-12 schools in Ames and elsewhere in Story County. Phillip can be reached via email at psitter@gannett.com. He is on Twitter @pslifeisabeauty.
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