In a nod to the region's hemorrhaging real estate market, Drexel University officials announced this week that they are backing away from a plan to build an undergraduate campus west of Roseville.
Even as Drexel entered the picture in 2007 as a potential partner in developer Angelo K. Tsakopoulos' plan to fund construction of a university through the development of some land he would donate, the once white-hot real estate market was cooling off.
This week, with home prices still falling, officials of Philadelphia-based Drexel notified Tsakopoulos and Placer County that they don't see a way to build the campus in the foreseeable future.
"They understand what has happened to the real estate market," said Drexel Provost Mark Greenberg. He said the university's would-be partners agreed that "the original premises of the deal did not exist."
The plan, first floated in 2000, was for Tsakopoulos and his partners to donate 1,150 acres to a university, which could use the commercial and residential development of 550 of the acres to fund campus construction.
But current prospects are negligible for such large-scale developments in Placer County. In the first seven months of this year, 428 homes have been sold in Placer. At the market peak in 2002, 2,823 homes were sold over the comparable period, according to Andrew Le-Page, an analyst for research firm DataQuick.
Since 2007, banks have foreclosed on about 3,200 homes in Roseville alone, according to Foreclosures.com, a tracking firm.
Placer County Executive Tom Miller called news of Drexel's withdrawal unfortunate, but not surprising.
"It's clearly going to be some time out before it is going to be developable," Miller said.
Drexel's Greenberg said campus leaders recently reached that conclusion and decided to clear the way for another potential partner.
"We just decided it was better to let everyone know so they could move on looking for another partner," Greenberg said.
On Wednesday, Drexel formally notified Placer County.
"This decision was not taken lightly, and it does not detract from the remarkable vision of Angelo K. Tsakopoulos," wrote Drexel President John Fry.
Drexel officials said they remain committed to the university's existing graduate studies center in Sacramento and will be adding more staff and offerings.
Critics who opposed the approval of the university project said Tsakopoulos was just using the proposal to open more rural land for development. Tsakopoulos and his partners own hundreds of acres of land near the proposed campus.
Tsakopoulos insisted the plan was intended only to enhance higher education in the region.
The developer and his partners who spent hundreds of thousands of dollars and years of political battling getting the proposal through the planning process hope to find a new partner.
"We look forward to working with community and education leaders in the region to help identify another candidate to utilize this land donation in Placer County and further grow our educational offerings in our community," AKT project manager Julie Hanson said in a written statement.
The project was approved by the Placer County Board of Supervisors in 2008. Once a Sierra Club lawsuit opposing the project is resolved, the clock would start running on the project's five-year entitlements, Miller said.
Greenberg said the lawsuit had no impact on the decision to withdraw.
The acreage to be donated is in unincorporated Placer County and while the project is not contingent on the property being annexed, Roseville officials have a keen eye on it.
Megan MacPherson, a Roseville spokeswoman, said the development "could open some opportunities for us."
Earlier this year, Roseville formed a university task force to pave the way toward bringing a four-year university to town. In a May interview with The Bee, City Manager Ray Kerridge indicated the effort to annex the Tsakopoulos land was on the back burner.
On Friday, City Councilman Tim Herman said he was disappointed in Drexel's decision, but that efforts to find a university for that site and others will continue.
A university would strengthen and diversify the Roseville economy, Herman said. A 2004 study pegged the economic impact of a 6,000-student university employing 2,000 people at more than $105 million a year.
Greenberg was not optimistic that another university could step in and execute the plan in the near future.
"It is an extremely expensive endeavor developing an undergraduate campus," he said.