Carlson School's expansion is U's highest priority

A $39.9 million expansion of the undergraduate facilities at the University of Minnesota's Carlson School of Management is the priority of the university's two-year capital budget headed to the Legislature.

The second-highest-ranked project is expansion of the business school at the university's Duluth campus.

The nationally ranked Carlson School would be able to accommodate about 2,500 students, a 50 percent increase, after the expansion.

The university administration is requesting $26.6 million, or two-thirds of the cost for the Minneapolis campus expansion, from lawmakers. The other third of the $39.9 million is expected to come from alumni contributions.

Already, Herbert Hanson, a wealthy graduate of more than 50 years ago who lives in California, has pledged $10 million to the new school and related undergraduate programs.

Gov. Tim Pawlenty has included the undergraduate school expansion in his proposed capital budget for the 2007-08 biennium that he will submit to the Legislature this winter.

Jim Campbell, a retired executive of Wells Fargo Bank who is serving as interim dean of the Carlson School of Management, said in a recent interview that expansion of the undergraduate program would be a great investment for the state. The Carlson School now serves only about one of every eight students who apply for admission because of capacity constraints, he said.

And Carlson graduates, who tend to rank in the top 5 percent of their high school classes, often stay in Minnesota and start or expand businesses that collectively employ thousands and generate millions in tax revenue, according to recent graduate surveys the business school is circulating to help make its case.

"There's a ton of demand to get into the Carlson School from top students from Minnesota and other states," Campbell said. He pointed out that Minnesota graduates about 450 business students annually, compared with the Big Ten business-school average of 1,000.

"This long-term investment allows us to expand capacity, to admit more top students who will create more businesses and capital to be invested in Minnesota. ... Seventy-seven percent of our applicants are Minnesota residents. Nearly half of those who aren't admitted leave to go to school at Wisconsin, Notre Dame, Colorado or another college in another state."

The state contributes only about 10 percent of the $70 million operating budget of the entire business school, including undergraduate, graduate, seminars and other education programs. Tuition, scholarship revenue and earned income make up 80 percent of the school's budget.

Campbell said alumni donors also are being tapped to help raise a $25 million scholarship endowment, which will allow the school to triple the number of scholarships available to needy and high-achieving students.

The average cost for tuition and fees for a full-time undergraduate student is $8,820 this academic year, far less than what elite private universities charge.

More than half of the undergraduate students are women, and 14 percent are minorities.

The Carlson School has been ranked the 12th-best undergraduate program in the nation and seventh-best among public universities, according to the benchmark annual survey by U.S. News and World Report.

"But top-ranked should not be confused with elite," Campbell said. "Two key reasons we can attract and retain students who produce this kind of economic impact are that the Carlson School also strives to be affordable and accessible. Without the state as a partner, we will fail at these missions and become a school only for the Ivy League-caliber student. That would be a huge disservice to Minnesota and would force many of our future business and community leaders to go elsewhere."

If the appropriation is approved this year, the new building would open in 2008 and also would house the College of Liberal Arts' Department of Economics.

This would be a natural collaboration between management, finance and the "dismal science" in expanded quarters on the campus' West Bank and eliminate the need for about $18 million in renovations planned for East Bank buildings, the university said.

Neal St. Anthony • 612-673-7144 nstanthony@startribune.com