Soaring steel and concrete prices mean Northwestern will have to rely even more on donations to construct new buildings and make much-needed renovations, according to Ron Nayler, vice president for facilities and management.

“Prices have gone up substantially,” he said. “It’s a phenomenon of the industry that even the best estimators today are having a hard time of keeping up with where prices are going and why.”

As “world-wide competition for materials” increases demand for goods such as steel, concrete and copper, the supply hasn’t been able to keep up, he added.

Today’s heightened prices are the residual effect of major cost increases in 2004. That year, for example, USA Today reported prices for hot-rolled coil steel jumped 66 percent to $482. In January 2005 prices topped $650 and by the end of the year leveled at $518, according to Meps International, a company that surveys steel prices.

During that period, NU project manager Susan Budinsky was overseeing construction of the Ron Burton Academic Advising Center in Arthur Anderson Hall when her contractor told her the building costs were increasing because of steel prices. Ultimately, NU did not have to pay the additional overhead because the costs were already contracted, but Budinsky said the increase impacted future construction projects.

“Steel prices did escalate and that was reflected in the bids that came out,” Budinsky said.

Rising costs increase the “critical mass” of funds needed to start construction projects, meaning NU has to work harder to get donations, Nayler said. Without those extra donations, projects will be delayed.

“We rely on, to a large extent, private donations that actually make construction projects viable,” Nayler said. “If our endowment was five times the size it is that might not be an issue.”

The administration is in various stages of three major construction proposals, one of which will likely proceed without a lead donor.

This September NU plans to renovate Annie May Swift Hall. Nayler has said there will be no major changes to the structure, but the interior will be completely altered. Costs had not yet been finalized.

“At this point, we’re not going to rely on a donor in order to move the Annie May Swift project forward,” Nayler said. “The money will come from the central budget.”

Lack of a lead donor halted plans to revamp the School of Music buildings, Bienen said. He estimated that the project would cost about $30 million.

“We’ve always felt the music facilities are not adequate,” Bienen said. “You get good students and good faculty, but they’re not what they should be.” But the president added that rather than starting construction the University won’t be able to finish, he thinks it is better to “go on stumbling with what we have.”

The university is also planning the construction of the 140,000-square-foot Proteomics and Nanobiotechnology Building, a science research facility, on North Campus. The $75 million project will be connected to both Pancoe Life Sciences Pavilion and the Center for Nanofabrication and Molecular Self-Assembly via a pedestrian walkway.

Estimating construction costs is a difficult process for all universities, said Jim Hansen, director of campus planning and maintenance for Pomona College in Claremont, Calif. Pomona hired three estimators to work together to predict construction prices, Hansen said. Pomona finished its projects on time, but the university felt the financial constraints, he added.

“The difficulty that we have is assigning enough contingency to counter escalation (in prices),” Hansen said.

Right now prices are at their “peak,” Bienen said.

“You are at the mercy of donors and the economy,” Bienen said. “I can’t print money.”

Reach Deepa Seetharaman at [email protected].