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Expansion of Sioux Falls research center becomes budget priority for state regents

PIERRE — The state Board of Regents ended its two-year experiment of discounting basic courses at the University Center in Sioux Falls on Thursday because enrollments still lagged.

But space is so full at the GEAR research hub across the street from the center that the regents want a two-story addition at GEAR.

The regents voted Thursday to ask the governor to recommend $7 million in one-time funding from the Legislature for the GEAR project, with another $7 million to be raised from private sources.

The regents also gave the green light to the University of South Dakota to proceed with a preliminary facility statement and approved USD spending up to $50,000 to develop the plan.

The concept calls for adding nearly 24,000 square feet of space. The expansion would allow the biomedical engineering program to grow, provide more manufacturing space and offer laboratory and office space for companies partnering with researchers.

Monte Kramer, the regents' vice president for finance and administration, said Gov. Dennis Daugaard has toured GEAR several times and appears interested in the expansion project.

There wasn't any public discussion, however, regarding the board's decision Thursday to scrap the tuition-discount program that was started in 2012.

The item was on the board's consent calendar, meaning it was handled without any debate or mention.

The original hope for the $100 discounts per foundation-level course was that enrollments would rise 18 percent over the four-year life of the experiment.

Instead of projected growth of 3.1 and 5.6 percent in the first two years, enrollment dropped 4.4 and 6.4 percent.

The revenue losses became too much for the discounts to continue, the regents decided. Students have been notified the discounts will end after the fall 2014 semester.

The current tuition rate of $204.90 per credit hour will increase to $312.90 for spring 2015 classes.

USD president Jim Abbott said GEAR should expand. Abbott said his original request was for bonding and an annual payment.

"It appears the governor isn't interested in borrowing money. There is some support for one-time dollars," Abbott told the regents Wednesday during a budget presentation.

South Dakota State University president David Chicoine spoke in support of the GEAR expansion.

"These are big ticket items," Chicoine said about research centers. He said it's easier for campus personnel to raise money from donors if there is state funding guaranteed.

"It's a real shift in policy," Chicoine said. SDSU has been working three years on a laboratory project and universities need new space for research, he said.

"I really support aggressively talking about this," Chicoine said.

The somewhat opposite directions at University Center and GEAR reflect the strong competition from private higher-education campuses in Sioux Falls and South Dakota's largest cities' growth in public university-level research.

There was fear when the university centers opened in Sioux Falls, Rapid City and Pierre.

Critics said they would drain resources and students from the traditional state university campuses and from the private schools.

Pierre and Sioux Falls appear to have peaked in the 2010 and 2011 period and have shown declines since.