Zillow’s $5M Gift Powers UW CSE Building Toward Construction Start
[Updated 1/11/17 10:18 am. See below.] Construction on the University of Washington’s second computer science building could start as soon as Friday if the university’s leadership approves a bridge loan of up to $25 million to finance the project while remaining anticipated private contributions materialize.
Those private contributions have come in large, highly-touted chunks, and lower-profile though still significant commitments from individuals and corporations that have so far kept themselves anonymous. The fundraising campaign for the building, so far referred to only as CSE II, got a major boost Tuesday when Seattle-based real estate technology company Zillow Group (NASDAQ: ZG) announced a $5 million contribution.
“I believe we’re in a strong position to gain approval” from the UW Board of Regents, says Ed Lazowska, the computer science professor working on the effort, via e-mail. “We’ve had wonderful fundraising progress, and the project appears to still be on-budget. If the Regents approve on Thursday, there should be action at the job site as soon as Friday.”
The $110 million, 135,000-square-foot building can’t come soon enough as the UW struggles to accommodate surging demand for the computer science major from incoming students, and from the region’s tech industry for trained graduates of the top-tier program. The additional capacity is expected to allow the UW to double the number of computer science graduates each year to more than 600.
The existing computer science building, the Paul G. Allen Center, named for the Microsoft co-founder who contributed $14 million in a similar fundraising campaign, was dedicated in 2003, two years before Zillow was founded by Rich Barton and Lloyd Frink. Hundreds of computer scientists have been educated in the Allen Center—just west of the planned location of CSE II and now often overflowing with students and instructors—and many alumni have gone on to work in the region’s tech industry.
“Having founded our company in Seattle, we have long benefitted from this wealth of talent and are proud to be able to support the expansion of such an extraordinary program,” says Zillow Group COO Amy Bohutinsky in a news release. “As Zillow Group’s first corporate donation, our hope is that this gift will help expand the education opportunities in our state and ensure more young people have access to high quality STEM education.”
Zillow’s $5 million pledge follows a $10 million commitment from Amazon (NASDAQ: AMZN) made last fall in one of the tech giant’s most significant local philanthropic moves, and from Microsoft (NASDAQ: MSFT), a stalwart supporter of the UW, which pledged $10 million to begin the funding campaign in 2015, and has since tacked on another $10 million, Lazowska says. Microsoft President Brad Smith chairs the fundraising campaign committee.
Lazowska noted the common thread running through these corporate donations, particularly the latest one from Zillow.
“Zillow, as it was growing, benefited from the companies that had come before—particularly from Microsoft, also from Amazon,” he says. “We have a wonderful ecosystem here.”
Barton and Frink worked at Microsoft, where they incubated Expedia and later took it public, in 1999—the first of a string of startup successes.
“Zillow, as a relatively young, relatively small public company, is making a remarkable statement by ‘giving back’ in a way that will benefit our region—its students and its companies,” Lazowska says.
More than 100 individual gifts have also been pledged for CSE II from alumni and friends, Lazowska says. These include seven pledges of $1 million or more, seven $500,000 pledges, and 10 pledges between $200,000 and $500,000. “People have been AMAZINGLY generous,” Lazowska says.
In all, $64 million is expected to be raised privately for the project, according to a Board of Regents briefing document (PDF), however Lazowska says the actual fundraising target is about $70 million. But while pledged money is great, it takes real dollars in the UW’s accounts to build. As of Dec. 31, $18 million of pledged private funds had been received, according to the document. Lazowska says counting state and university money for the project, roughly $60 million is in hand. [This paragraph was updated to clarify the private fundraising goal, and the cash on hand now.]
Current cash-flow projections, including some $32.5 million in state funding for the project, show a shortfall in spring 2018, necessitating the bridge loan. That funding would be called upon until pledged gifts trickle in, and would be paid back in full by Jan. 31, 2022.
An interesting side-note: The Regents’ briefing document lists the project’s costs per-square-foot—$779—compared with similar facilities at universities around the country. See if you can spot the pattern:
As part of its donation, Zillow will have its name on a 3,000-square-foot multi-use space in the new building. Naming rights for the building as a whole have not been announced.
The project’s budget and funding plan go before the Board of Regents on Thursday. If construction begins this month and remains on schedule, the building would be completed by the end of 2018.