Maintaining the Lion’s share: Ripple effect from Penn State brings thousands into area to shop, dine

mdawson@centredaily.comFebruary 9, 2013 

When the Bryce Jordan Center on Penn State’s campus opened in 1996, the Nittany Lions’ basketball teams had a much larger and state-of-the-art place to play. The arena’s opening also brought with it thousands of people who came to see musical acts, NBA pre-season games, and circuses, among other events, along with the dollars in their wallets they would spend in local restaurants and shops.

That phenomenon was not new to the area, of course. Long before the $55 million BJC opened on a cold January day, tens of thousands of people converged on State College and Penn State’s campus for Nittany Lions football games. Fans stayed in hotels and went out to dinner. They bought tailgating foods at the local supermarkets, and shopped for souvenirs at the local stores.

The economic ripple effect from football games is one of the ways the university impacts the county economically. The university is by far the county’s largest employer, and as the economic engine here, it has shielded the area from hard times other parts of the state or country have seen.

“Penn State is a major and responsible economic enterprise here in central Pennsylvania and everybody understands that as Penn State goes, so goes Centre County and the surrounding communities that are part of it,” said the university’s senior vice president for finance and business, David Gray, who is also on the board of the Chamber of Business and Industry of Centre County. “I think we understand and respect that and take that both with a measure of pride and humility.”

Penn State employs 27,400 people — more than 13 times No. 2 on the list of the county’s largest employers, the Mount Nittany Health System and hospital.

The work comes in all shapes and sizes — such as tenured faculty, administrative assistants, researchers, librarians, student staffers, janitors, or Beaver Stadium ushers.

Starting small

Penn State wasn’t always this big. Maps from the 1930s show a campus with much more open space between buildings. The engineering unit buildings behind the Hammond Building housed GIs, and trains brought coal onto campus to the steam plant on College Avenue at Burrowes Road.

When Gray was an undergraduate student at Penn State in the 1970s, the campus had 12,000 fewer students than it does now.

Gray attributed the growing up Penn State did — onto the national scene as an academic powerhouse — to former university President Bryce Jordan, the namesake of the on-campus arena.

“Dr. Jordan realized that for Penn State to become an absolutely top-ranked, national university, it had to rely on more than the generosity of state government to get us there,” Gray said.

A $200 million fundraising campaign was launched in 1986, and by two years, the university had secured $300 million. The university created 111 endowments for faculty considered leaders in their field, and the university had $10 million gifts secured from the Smeal and Eberly families, whose surnames are part of the names of two colleges on campus.

“It made believers out of a lot of people that weren’t really sure or convinced that PSU could successfully engage in philanthropy,” Gray said.

The Nittany Lions football team also captured its second national title in January 1987, further boosting the university’s profile.

Successor Joab Thomas oversaw a major building and renovation project that saw new facilities such as what is now the Innovation Park business complex off Interstate 99, the Palmer Museum of Art, and Applied Research Laboratory and the groundbreaking for the Bryce Jordan Center.

Thomas’ successor, Graham Spanier, continued the building campaign that saw the facilities including the Information Sciences Technology Building that goes across North Atherton Street.

“Very clearly, those presidential tenures witnessed just dramatic growth of the university, and along with it, its national prominence and reputation grew with it proportionally,” Gray said.

As the university grew in size, it grew in students and employees. More parents making trips here, more students to eat, shop and drink downtown.

But one thing that has not grown is the amount of funding from the university receives in the governor’s budget. In early 2011, Gov. Tom Corbett proposed slicing in half the university’s, which was a cut of $182 million.

The university averted that cut, as lawmakers helped reach an agreement with the governor that put its funding at $279 million, a level it has been for the past two years and the governor has proposed for 2013-14, too.

Gray said university officials do not think the state will ever restore the funding to levels in the past.

“Quite frankly, as we project out into the future, we don’t foresee any in growth or rebound in state appropriations,” said Gray, who noted the officials are hopeful to “hold the line” on the funding stream they do get.

The effect the state funding will have on the university this year is not known, as the dollar amount the governor put forth will require approval from the state legislature. The lion’s share of the state funding goes toward subsidizing the cost of in-state tuition for state residents.

Tuition has skyrocketed over the years, and some fear the tuition will price Pennsylvanians out of being able to go to college here.

“With a soft economy, we have to be concerned about our ability to maintain an affordable educational experience that is also a high quality educational experience,” Gray said. “We are very pressured to keep tuition within reach of common citizens of Pennsylvania.”

In the past few years, the university froze employees’ pay and pared down academic programs to save costs. Some folks lost their jobs.

World Campus

However, despite the rising cost of tuition, there is good news.

“With respect to the importance of Penn State to Centre County and citizens of the region, enrollment demand for a Penn State education here at (University Park) remains very strong,” Gray said. “We don’t see that changing anytime soon. We are working in earnest to find ways to be creative to balance our budget to both grow our resources at the same time we control our costs better.

“It’s going to become increasingly stressful for us in coming years.”

There is also a strong demand for the university’s World Campus, which is what it calls its online education program. Students do not have to be near a Penn State campus to take the course — all they need is a computer with Internet access.

Gray said the university will work hard to continue driving the rapid growth of the program, because it is “absolutely vital” to Penn State’s success.

According to university figures, some 8,500 students are enrolled in World Campus courses.

Gray said the university is also going to have to work hard in the face of another issue: a sharp decrease in the projected numbers of high school graduate populations in Pennsylvania and in the Northeast. Public school enrollments across the state are in decline, except for a few areas, including southcentral Pennsylvania and the Philadelphia area.

Gray said the university will have to improve its competitiveness and increase its market share to keep its enrollment figures the same.

The state saw its peak public school enrollment figure in the late 1970s and early 1980s, Gray said. As the enrollment started to go down, though, more and more students started going to college, so Penn State’s enrollment did not suffer.

“That is no small challenge for us,” Gray said. “It means we’re going to have think much more creatively about pricing our programs with market sensitivity and making sure that we’re doing the utmost we can to be an affordable option for Pennsylvanians and non-Pennsylvanians alike in terms of our programs because these demographic realities are pretty stark.”

Another area for growth is making revenue from generating licensing and royalties from the commercialization of research and intellectual property. One example, and likely every college and university’s dream, is the creation of Gatorade by the University of Florida.

Gray said the capabilities of the Penn State’s faculty are “truly remarkable” and that there will be an emphasis put on that.

“That’s something where I think we can stand to improve markedly,” Gray said.

Future renovations

When it comes to what Penn State will look like in the coming years, Gray said the focus will more be on renovating existing buildings than on new construction.

Gray said not to expect any aggressive expansion on the west campus in the next five years.

“We need to update our science and engineering labs very badly,” he said. “We need new facilities for anthropology and sociology.

The College of “Earth and Mineral Sciences is certainly an area that is overdue for modernization.”

In the short-term, the university is also going to renovate the Henderson Building along East College Avenue. The renovation will not add much new square footage to the building, but it will give it a much-needed facelift, he said.

Two on-campus residence areas will get upgrades, too.

Residence halls in East and Pollock will be renovated with brand new electrical work, new bathrooms, even air conditioning. The same kind of work is being done now to South Halls.

“We need to keep those buildings ready for the next generation of students,” Gray said. “The cornerstone may tell you that they’re 50-plus years old, but they’ll be like brand new buildings.”

Having air-conditioned residence halls will allow the university to host more summer camps, as the participants stay in the dorms.

The Intramural Building is slated for a renovation that will give it a brand new, glass-covered front.

The HUB-Robeson Center will be renovated, too, as the need for student activity space has increased.

Gray also points to the $90 million Pegula Ice Arena as a landmark move for the university.

“That whole move of our ice hockey programs to Division I status and building a first-class ice arena for our teams to compete, plus a restaurant that will be on premise,” he said, “will be a tremendous improvement to that side of campus.”

The hockey arena will be a draw for the hockey but also as a community attraction, Gray said. The arena will have two rinks, one for the teams, and another for the community that will be open 20 hours a week.

That will bring a lot more visitors to the area. Gray thinks it will put people in for camps, pulling in people from all over the area.

Sandusky scandal

As for the Jerry Sandusky child abuse scandal, Gray said the university has been able to withstand the impact. He cited the leadership of President Rodney Erickson, whose “voice of calm” helped guide the university through the storm that saw long-time coach Joe Paterno and former university president Graham Spanier fired.

The scandal also led the NCAA to impose harsh sanctions, including a postseason bowl ban, a reduction in scholarships and a $60 million fine.

Local officials were concerned about the impact to the local economy, and that was even one of the reasons Gov. Tom Corbett used in his lawsuit against the NCAA that sought to overturn the sanctions.

Gray said he understands the concern for the well-being of the football program because of its clearly defined impact on the community’s economy.

“We remain watchful of that, but the kind of success that we saw Coach (Bill) O’Brien enjoy this past season is very encouraging to us and demonstrated to me the great resiliency of Penn State University, its ability to withstand, learn from and grow out of a very difficult situation and rebound from it in an effective fashion.”

Mike Dawson can be reached at 231-4616. Follow him on Twitter @MikeDawsonCDT.

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