The Outstater

March 6, 2025

THE DECISION LAST WEEK by the trustees of Ball State University (BSU) to divert millions of education dollars to one of those public-private ventures is doubly sad. 

First, it is discouraging to see one of our public institutions fall into a bad deal. Yes, I understand that it is more fun to be a “developer” looking over blueprints and lunching with bankers than trying to manage a campus-full of pesky, intractable and largely uncooperative students. Still, passable administrators make inept capitalists.

That said, let’s hear about their project. It includes a new performing arts center, a boutique hotel, residential housing, retail and restaurants — all of them top drawer. Here are some budget items:

• Performing Arts Center — $69.9 million, featuring a main stage theater with 425 seats, a studio theater and various “supporting amenities.”
• Hotel Development — Plans include a 95-room hotel with restaurants and a rooftop bar-lounge.
• Residential Housing — The university plans to construct new townhomes and single-family houses with an estimated combined cost exceeding $30 million.
• Land Purchases — BSU has invested over $5.3 million so far in acquiring property to support these developments.

Although financial details are sparse, if the project follows the eco-devo pattern its “Investors” are attracted by a plan that allows them to be paid largely up front, that is, the profits they would expect to earn over the life of the notes and bonds. The finances will play out for 20 years or so until the elements of the project begin to go bankrupt (there never having been independent market studies).

At that point, silent partners among the initial investors step in to buy individual parts and parcels at fire sales, with the city and the university (taxpayers) making good any loss.

Again, the administrators may not know any of that, seeing themselves as visionary, progressive stewards. Their partners, the more savvy bankers, lawyers, engineers and architects, are unlikely to tell them otherwise.

We should mention that BSU is sort of a bank itself. As of June 30, 2023, its endowment was $341.3 million. This last year. the university achieved a record-breaking fundraising total of over $79 million, marking it the sixth consecutive year of raising more than $30 million in new private gifts (presumably given on the assumption that they would be spent on something educational).

Let us hope none of this becomes reality. But what is a public university doing in the eco-devo biz anyway? Or why if it is such a development opportunity isn’t it simply left to the private sector? And will private interests in Muncie be hurt by the university-driven competition?

If you can ignore the impressive architectural renderings for a moment, the project has a Potemkin vibe with hints of crony capitalism, pay-to-play and rent-seeking. Rather than a product of natural urban growth it appears to be a buffer shielding the university from Muncie proper. To be glib, it lacks only a moat. The city, you see, has become something of an embarrassment to the university in recent years.

Muncie’s combined violent and property crime rate is 33 per 1,000 residents, which is higher than 96 percent of U.S. communities. The chance there of being a victim of violent crime, which is a real enrollment discourager, is 1 in 227. Muncie residents face a 1 in 35 chance of experiencing property crime with the city having one of the highest rates of motor vehicle theft in the nation, with a 1 in 278 chance of losing your ride.

We said the trustees’ decision to approve all of this was doubly sad. That is because the university, as Muncie’s largest employer, has political clout that could have been used to provide constructive leadership and expertise, that could have braced the weak knees on a typical city council.

Particularly, instead of funding a boondoggle, it could have put forward proven crime-control strategies, more flexible zoning, relaxed regulation and lower taxes, all proven ways to attract real investment.

We know economists on campus who could have pointed them in the right direction. We doubt, however, they were consulted.

For sound urban policy requires an appreciation of the role of free markets and private property. The great number of faculty members and administrators have none. They are pledged instead to the all-demanding pursuit of social justice with its fanciful ideas of how the world should be rather than how it is — the perfect attitude for funding an imaginary city with other people’s money. — tcl

Our Site

Full use of this site, including access to the search function and the archive of past articles and journals, is now available to everyone.

Connect with Us

 

Our mission is to marshal the best thought on governmental, economic and educational issues at the state and municipal levels. We seek to accomplish this in ways that:

• Exalt the truths of the Declaration of Independence, especially as they apply to the interrelated freedoms of religion, property and speech.
• Emphasize the primacy of the individual in addressing public concerns.
• Recognize that equality of opportunity is sacrificed in pursuit of equality of results.

The Indiana Policy Review Foundation is a non-profit education foundation focused on state and municipal issues. It is free of outside control by any individual, organization or group. It exists solely to conduct and distribute research on Indiana issues. Nothing written here is to be construed as reflecting the views of the Indiana Policy Review Foundation or as an attempt to aid or hinder the passage of any bill before the legislature or to further any political campaign.

The foundation's white papers are intended to make scholarly research on Indiana issues more widely available to policy analysts and researchers. White Papers represent research in progress and are published to invite comment and discussion as preparation for their submission to academic journals and other professional publications. The authors are solely responsible for the content of their research and analysis.