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Caption: Board of Trustees Minutes - 1936
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622 BOARD OF TRUSTEES [April 18 accept the payments of the grant to the Board and is directed to cause the proceeds of the grant to be deposited in the Construction Fund A, subject to the terms of the aforesaid Construction Fund Agreement. O. M. KARRAKER ATTEST: H. E. CUNNINGHAM President Secretary [SEAL] Mrs. Plumb seconded the foregoing resolution, and a discussion thereof ensued. The President of the Board announced that Dr. A. C. Willard, President of the University, who was present at the meeting, would explain and answer questions concerning the action proposed to be ratified. Mrs. Freeman inquired what the consideration had been for the conveyance of the site of the project to the University of Illinois Foundation as Trustee. President Willard replied that the Government was paying the sum of $196,879.35 to the Board in consideration solely of the conveyance of said title to the Foundation, as more fully provided in the Trust Agreement to which the government was a party. He further pointed out that the offer of the Government to make said grant to the Board has been conditioned upon the conveyance of this property in trust. Mrs. Freeman inquired if this money was to be used in the construction of the project. President Willard stated that the money received from the Government as a consideration for the conveyance of the property would be deposited in Construction Fund A and used to aid in the construction of the Medical and Dental College Building as provided in the Construction Fund Agreement. He added, however, that the Board would nevertheless derive the benefit from the expenditure of said moneys. Under the terms of the Trust Agreement, the Board had received an option to lease the completed Medical and Dental College Building on a year to year basis. President Willard stated that in the fixing of the rental under the proposed lease, the Board had been given full credit for the grant moneys to be used in the construction of the project. The rental was based on the cost of the project exclusive of the part of the cost to be financed with grant moneys. Assuming that the proposed lease would be entered into and not thereafter terminated by the Board, it was contemplated that over a period of twenty years the rental under the lease would be sufficient to pay for the cost of the project financed with moneys (including interest thereon) other than said grant moneys. In other words, the option to lease at a net rental of $86,000 per year had been given, to the Board as a consideration for the use of the grant moneys. This option to lease was a consideration of great value because the rental stipulated in the option was substantially less than the rental value of the project. Some discussion ensued as to the actual rental value of the project, and it was agreed by all that the rental value of the property was at least 45% higher than the rental stipulated in the option given to the Board.
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