University administration announced plans to halt the public-private partnership (P3) at the Dec. 2, 2022 Board of Regents meeting, citing inflation and labor shortages.

President Bob Jackson said COVID-19 led to a number of issues, ultimately leading to the decision to halt the project. 

Vice President of Finance Jackie Dudley said some risk factors are involved, including supply and labor chain issues and interest rates. 

Dudley said the University and its partners quickly learned the cost of construction would be more than anticipated, as interest rates have increased dramatically. 

According to CNBC, interest rates and inflation often move in the same direction, whether it is up or down. In July 2022, the economy saw the inflation rate increase as the prices of goods and services went up. 

The rise in inflation and interest rates was caused by several factors, including the war in Ukraine. 

“The war in Ukraine led to a spike in energy prices, while supply chain shortages affected the prices of other goods, such as cars,” according to CNBC. “In other words, high prices are being caused by having too little of a supply of goods and services and, at the same time, having too much of a demand for them.”

The current inflation and interest rates have led some development companies to reevaluate projects with their business partners. 

Rise Development LLC, the company approved to execute predevelopment plans, has requested the board extend its predevelopment agreement from June 30 to Dec. 30. 

Dudley said the administration plans to monitor the project and meet regularly with Rise to determine when it would make sense to advertise bids again.

The next quarterly Board of Regents meeting will be held on Friday, Feb. 24.

Stay tuned into The News as we follow this story for updates.