University of Tennessee seeks approval for Oak Ridge National Security Prototype Center pre-development agreement

Austin Oaks, Associate Vice President for the University of Tennessee, told the State Building Commission that the university requests approval of a pre-development agreement with a waiver of advertisement to advance planning for the National Security Prototype Center in Oak Ridge. "Our request is on page 4, and this is for the approval of a pre development agreement with waiver of advertisement associated with the National Security Prototype Center project in Oak Ridge," Oaks said.

The presentation said the university and Consolidated Nuclear Security (CNS) have agreed to collaborate on the project and that a Roane County development entity would finance, own and lease space in the center. "The university's base rent in the ultimate agreement will cover 100% of the debt service required to construct the building," Oaks said, and added that the developer, Lawler/NSPC LLC, would build and operate the facility.

Commissioners asked whether the 20-year lease and associated borrowing would be fully amortized over that period. "So it's a 20 year lease. Do we anticipate that the 20 year lease will be fully paid off? You've got that amortized out to be able to do that?" one commissioner asked. Oaks replied, "Yes, sir. We plan to have a bank loan, that will be a 20 year loan with a 20 year amortization."

After brief discussion about regional economic benefits and potential startup activity in Oak Ridge, the commission moved, seconded and approved the pre-development agreement as presented. The commission did not provide an individual roll-call tally during the discussion; the item passed on a voice vote.

The university indicated it will later return with the full lease agreement and any related approvals needed from the Tennessee State School Bond Authority before final execution and occupancy decisions are made.