2/5/2016: Kilkenny Towers sold for $30M. Elon Glucklich has the story in the RG here.
2/21/2012: ODE reporter Deborah Bloom teams up with investigative reporter Jeff Manning from the Oregonian to produce a fascinating story on how UO’s former Athletic Director Pat Kilkenny developed the Courtside and Skybox apartments next to Matt Court, while he was on the UO payroll. He started working on the deal summer of 2009, and didn’t tell Lariviere until construction was well underway, summer of 2010. ODE link here, Oregonian here:
Cody and Kilkenny’s 2009 gamble now seems ahead of its time. Both Courtside and the larger, adjacent Skybox complex are 100 percent occupied, marketing themselves as “anchors of the up-and-coming Arena District.” Rents range from $625 to $1,250 per bedroom per month, making them some of the more expensive student housing units in the city. As 50 percent owner, Kilkenny figures that he could eventually earn $7 million to $10 million.
There’s nothing wrong or illegal about a public employee making a profitable investment, even a hugely profitable one. Ron Bersin, executive director of the Oregon Ethics Commission, said state law allows public employees to participate in private ventures. What would constitute a violation is if Kilkenny made decisions in his public role from which he benefited. Kilkenny was no longer athletic director when the buildings were erected. But he remained employed until March 2011 as special assistant to the athletic director.
Kilkenny stepped down as AD in July 2009, when Frohnmayer left. But then the string of new AD’s – Mike Belotti, Lorraine Davis, and Rob Mullens, all kept him on the payroll at 0.50 FTE. This let him get UO health insurance. Guy with a private jet gets the state to pay for his health insurance? Too bad UO won’t give that same deal to the 0.49 FTE NTTF’s getting paid $25,000. (By very rough count, about 100 NTTF’s are at exactly 49%, so no benefits.)
Meanwhile the athletic department is still stuck with a $10 million ten year balloon loan on the baseball park Kilkenny built for us. And we’re still stuck subsidizing athletics’s overhead, thanks to the secret deal Kilkenny cut with Frohnmayer.
We should note that the Courtside scandal was first brought to light by Camilla Mortensen in the Eugene Weekly last year, here. UO finally took Kilkenny off the payroll 2 months later. At the time we wrote a little bit about how Kilkenny came to be hired by Frohnmayer as AD, here. Apparently this is the first in a series of investigative stories that the Oregonian and Emerald will cooperate on. Great idea. Obviously there is plenty of material to work with.
Here’s the bottom line: Even the appearance of impropriety is intolerable.
This was a beautiful deal.
First Kilkenny and Frohnmayer got UO to max out our borrowing capacity with the state by selling $230 million in bonds for Matt Court. That meant UO couldn’t borrow to build our own dorms.
Then Kilkenny put together his own deal to build private student apartments, and made ~$10 million.
And he did it all while on the UO payroll. The guy is a fucking financial genius. Let’s give him an honorary B-School degree.
I wonder what Frohnmayer got out of it?
kilkenny took no pay, so he wasn’t really on the payroll. He actually is a financial genius. Frown got nothing out of it except a free Athletic Director
I know you just mentioned the .49ers as a comparison – but I really think some serious light should get shined on that practice.
As scandalous as this is, hiring huge numbers of people .1 FTE away from receiving benefits is an embarrassingly awful practice.
I certainly never knew about it until a friend who was in my wife’s graduate program started teaching for OSU in Bend at .49 FTE, while in reality working 40+ hours a week.
That a guy with a private jet got the extra .1 for health insurance just makes it all the more insulting.
oops – .01 away from receiving benefits.
Incidentally, that’s 24 minutes per week.
Thanks for counting – I guess .49 isn’t huge, but it’s too many. Did you just count by paging through the pdf? Is that data available in a more raw format?
I agree entirely with the first comment. What kind of message does this send to our students? You oversee the building of a public facility, then make money off the buildings next to it. Doesn’t Kilkenny have enough money?
Pat:
“Why would I spend three years of my life (as athletic director) trying to make things better, only to act as a profiteer for nickels and dimes on a commercial real estate project?”
I don’t know. You tell us.
Kilkenny considers the seven to ten million dollars he will make on this deal “nickels and dimes”. I believe this is more than CAS has raised for all the humanities over the last twenty years.
Do not disagree with spirit of this comment, but the funds raised for use in the humanities are well in excess of rhe amount in question.
Don’t forget that Kilkenny used his influence to have the administration push the Towers on students, going so far as to make them unofficial University Housing. Those in positions to advise students on housing options were directed to persuade students specifically on signing leases at the Towers.
Unreported here is one fact I have UO Foundation files proving…..Nikes architect chose the Williams Bakery site. The architects liked that site because of the availability of surrounding parcels for other fat cat Ducks to cash in on. The news coverage states nothing about 10 years of the City of Eugene planning department wa$ting tons and propping up the whole “Walnut Station” concept. Free Duck game tickets were even distributed to City of Eugene planners even. At least the media has finally scratched the surface (after 3 or 4 years of bludgeoning mind you). The Walnut Station city planners put text in the “masterplan” for a indoor track along Franklin too. Gee that might lend added value to Courtside too. Welcome to the sustainable Duck clstrfk !
More from the Oregonian article:
“Kilkenny said he informed then-UO President Richard Lariviere of his involvement in the project in the summer of 2010. Time was of the essence.They needed to have the building ready for the 2010 academic year.”
Why? Isn’t this an old salesman trick: “I need your answer by 5:00 today.” Did Lariviere fall for this?
The UO relationship with Kilkinney stunk from the beginning. That it’s stink lingers on is no surprise. But let’s be clear, a divorce from public funding only makes things like this more likely. Money always has strings attached – the strings are just now attached to private fat cats rather than public fat cats.
In 1903, George Washington Plunkitt, a millionaire New York City alderman, explained how he had made his fortune. Somehow it reminded me of Kilkenny:
There’s an honest graft, and I’m an example of how it works. I might sum up the whole thing by sayin’: “I seen my opportunities and I took ‘em.”
Just let me explain by examples. My party’s in power in the city, and it’s goin’ to undertake a lot of public improvements. Well, I’m tipped off, say, that they’re going to lay out a new park at a certain place.
I see my opportunity and I take it. I go to that place and I buy up all the land I can in the neighborhood. Then the board of this or that makes its plan public, and there is a rush to get my land, which nobody cared particular for before.
Ain’t it perfectly honest to charge a good price and make a profit on my investment and foresight? Of course, it is. Well, that’s honest graft.
Or supposin’ it’s a new bridge they’re goin’ to build. I get tipped off and I buy as much property as I can that has to be taken for approaches. I sell at my own price later on and drop some more money in the bank.
Wouldn’t you? It’s just like lookin’ ahead in Wall Street or in the coffee or cotton market.
We need a Union to help shine a bright light on all of this Kilkenny-type corruption–that is what people like Bunsis do ( http://uauoregon.org/2012-financial-presentation-by-howard-bunsis-2 )–they figure this non-transparent accounting out and show us where the money goes. I wonder if Kilkenny was hired as some sort of “instructor” so this could appear to be an increase in instructional costs (as Frohnmayer did with his little leadership class, organized for about $80,000 by his secretary, I think I read here). A Union would also help us solve this Walmart-practice of hiring people for .49 FTE to avoid paying for health benefits. All of the anti-Union people who “buy local” to help support our local economy, and avoid Walmart because it does not provide “living wage” jobs to our local economy, should also realize that supporting a Union at the UO is necessary to make the UO provide “living wage” jobs. Ideally, the UO would re-orient some of its $88 million in profits this year to creating more world-class tenure track lines to better teach our greatly expanded student population.
I’m kind of obsessed with the .49 thing. Unlike other part time employees, when it’s 49% you kinda know they didn’t choose that number… and while I’m pro-union, I also don’t know if it’s something the union will be able to change.
For what it’s worth, “49%” shows up 531 times in the classified pay doc and 224 times in the unclassified doc.
…and just to keep it relevant, when you scan through the classified 49ers, you see no shortage from the athletic department.
Sure would be nice to have a csv of this.
Rutgers has a faculty union and has worse athletic scandals than UO.
Funny. I was attracted to and attended the UO in the late 70s because of its political advocacy (timber, civil rights, changing the future, etc). It has now become a corporate feed trough. Nike, Knight, Killkenny, Frohmeyer…. Shame on us/you.
After re-reading the article and reading the comments for the first time, I am astonished at the defensiveness of UO “fans.” They are saying “I don’t give a shit what you do as long as you win games and give me slight boost in my low self esteem while I wear regalia that is any color but UO school color (hint: green and yellow).” I hope these are not graduates commenting.