The University of Calgary Students' Union didn't win the $366 million jackpot in last week's U.S. lottery, but instead secured a $10 million dollar loan. The SU received the news April 17 from the Royal Bank, which means the long-awaited expansion of MacEwan Hall will begin in July.
According to SU President Toby White, the main purpose of the expansion is to build a new ballroom.
"The ballroom will take up an entire floor of the expanded area," said White. "We'll compete with the large venues."
Expansion will include relocation of the Copy Centre, new club space and a new bar/restaurant. As well, a new tunnel will connect MacEwan Hall to Science B.
The SU experienced many problems regarding expansion, most recently in securing the loan. According to White, Royal Bank lawyers believed the SU wasn't an independent body and couldn't take out a loan.
"I believe the Universities Act gives explicit power to the university to borrow money," said SU Vice-president Operations and Finance Matt Lauzon. "Does that mean the Students' Union can't borrow money?"
According to Lauzon, many attempts were made, both through the university and the government to resolve the issues around the Royal Bank's interpretation of the act.
"The Royal Bank looked at it as a risk factor," said White. "But the Royal Bank took another look, which was surprising because it was the same lawyers."
On its second look, the Royal Bank decided to grant the loan, which will take 20 years to repay.
"For the duration of the time we're actually building until we've used up all the money, it's a prime-based loan," said Lauzon. "We pay interest on the money that we've used up to that point. Our payment will be roughly $900,000 a year."
As for the $7 per semester expansion levy, Lauzon believes it is still necessary and a referendum will not be held to remove it from the SU fees. He added that once business opportunities from the expansion generate enough revenue, the levy will be removed as soon as possible.
"If we can't make [the loan payments] up with a new ballroom, with a new restaurant, with a new copy centre, new retail opportunities... we shouldn't have done this [expansion] in the first place," said Lauzon. "It's guaranteed if we expand this centre to that extent,we will be able to cover that $900,000 payment."