ASUCLA banks on redesigned Ackerman for financial revival

Tuesday, January 14, 1997

FINANCE:

New student union allows association to project small profit for
1997-98By Frances Lee

Daily Bruin Contributor

Keeping their fingers crossed in hopes of a financial turnaround
brought about by the reopening of Ackerman Union, the Associated
Students of UCLA (ASUCLA) finally had a chance to pat themselves on
the back Monday.

With the completion of the UCLA Store, the financially strapped
students’ association is hoping that revenues from the store will
meet, or hopefully exceed, their expectations.

The store "is the key to our financial plan," said ASUCLA
Finance Director Rich Delia.

Of ASUCLA’s $80 million yearly revenues, $60 million is
generated by the store alone, he added.

According to the five-year financial turnaround plan, ASUCLA
projected a small profit of $115,000 in the 1997-98 academic year
and planned to eventually break even in 1999-2000. At the end of
the 1995-96 year, the UCLA Store posted a loss of 7.9 percent.

So far the association is operating in the black, generating 3.6
percent more profit than planned for the first two weeks of
January.

Association officials, though optimistic, are cautiously guarded
about pinning all their hopes on the store. The financial viability
and health of the association is dependent on the store generating
enough revenue to take it out of the red.

While the store’s prospects are promising, Delia cautioned,
"It’s too soon to tell. Retail is a tough business, but the signs
are positive so far."

High ranking officials aren’t kidding themselves about the
store’s importance to the association’s financial health. ASUCLA
Executive Director Patricia Eastman even called the store "the
engine that’s going to drive our recovery."

But Eastman said this with a note of hesitancy because "we
haven’t finalized the loan agreements (with the regents) yet."

The total cost of the Ackerman Union renovation project finished
at $18.9 million ­ $2.5 million over budget. Those figures do
not take into account the recently announced and unexpected $3.2
million in cost overruns.

If the association is forced to take in the additional $3.2
million, it would "jeopardize the viability of the five-year plan,"
said Delia. "It was a horrible surprise. We can’t absorb it, and
the university knows it."

But since the matter is being disputed between Capital Programs
and ASUCLA over how much each department is responsible for, the
overrun has not yet impacted the financial plan.

ASUCLA’s financial plan must be presented to the Board of
Regents at their March meeting in order to have their loan for $5.3
million approved. If they cannot meet the deadline for the March
meeting, the association will not have the money to make their
first interest payment on their original $13.6 million loan.

Although the association is hesitant to pin all their hopes on
the store without a proven track record, the store was "the No. 1
source of revenue for the association," said Carol Anne Smart,
chief operating officer and director of retail operations for the
store.

"The ability to turn around the financial condition of the
association is (dependent upon) the newly remodeled store."

So far, the store is exceeding the expectations of the financial
plan, but a more complete picture of the association’s recovery
will have to wait until March.

"I think we’re going to do better than planned," said Eastman.
"By the end of year five, I think we’ll be right on target. I feel
very positive."