(Revised) The University of Pennsylvania, which has slowly paid down the towring hospital debt that stalled its construction projects in the late 1990s, earlier this year decided rates had fallen far enough to make it worthwhile to borrow $300 million through taxable 100-year bonds -- a rare vote of confidence by investors, who agreed to pay a rock-bottom 4.674% interest through 2113.
That's just about as cheap as 30-year bonds, and better than MIT and CalTech got on their own recent century bonds -- plus you don't have to worry about refinancing until everyone who approved the deal is dead, as Penn treasurer Stephen D. Golding told the Pennsylvania Gazette at the time.
What will Penn do with the money? The largest share, $200 milion, is earmarked for energy conservation projects. Penn hired Red Bank, NJ-based Torcon Inc., a construction firm with a local office at the Navy Yard, for this "unique project," says Torcon project executive John DeFazio: "We're going through and evaluating some 40 to 50 buildings for lighting and heating, ventilating and air conditionng improvements to their energy efficiency. This includes a lot of the older buildings, and most of the buildings in their core campus."
"It' a vast array of buildings," DeFazio told me. The Furness Library with its giddy brickwork and leaded stained-glass windows, and the hulking postwar Van Pelt Library across the commons. There's Victorian-era College and Logan Halls, built of crumbly Chester County serpentine stone, and the blocky classroom stacks of the social science departments; the medical and science and engineering labs with their chilled-water and hazardous-material and airflow issues; and the soaring blank atriums of the Wharton complex; all linked by steam loops as well as more ordinary utilities.
Torcon has already overseen upgrads at Arch Hall (the old Christian Association, from the days when Penn had a vigorous Protestant community, now a restaurant and student-group space), among other campus landmarks.
DeFazio's team will be tagging fat 20th Century-style flourescent bulbs and ballasts for replacement with more-efficient new inch-diameter bulbs and electronic ballasts, plus outdoor and hard-to-reach-area LED fixtures (though LED is still too expensive for unviersal installation.) Chemistry buildings will replace constant air circulation through lab hoods with variable air volume (VAV) systems that can be turned off when not in use. Similar controls should provide big savings for heating and air conditioning.
DeFazio, a 30-year engineering veteran who's overseen jobs at Villanova, Campbell's Soup and Penn State, among other places, since joining Torcon in 2005, loves the Penn campus: "One of the great things about the construction business, you'd be suprprised about how much you learn" from clients -- including professors and other veteran staff who are highly protective of old-fashioned woodwork and plaster and other architectual details that Torcon has learned to work around.
As a private firm, owned by the sons of founder Ben Torcivia Sr., who died earlier this fall, Torcon has the kind of "flexibility" needed to work with such specialized and complex clients, DeFazio said.