Central building planned on sound financial basis

November 1, 2011 – Independent expert opinion attests to sound financial planning – financial cushion even bigger than expected

Lüneburg. In an expert opinion presented today, independent auditors have attested to the sound financial planning of the new central building by Leuphana University of Lüneburg. The new building at a cost of 57.7 million euros, which has been designed by Daniel Libeskind, American architect and Professor at Leuphana, is funded primarily by the European Union, the Federal State of Lower Saxony, the German Government as well as by the City and District of Lüneburg. The auditors carefully examined the various parts of the financial plan and came to the conclusion that “the new building has been planned on a sound financial basis.” The expert opinion also confirms that the University has made allowance for its financial reserve in the amount of 2.6 million euros and refers to other potential revenues.

In the past, the complex finance structure of the highly sustainable and energy-efficient building repeatedly gave rise to lively discussion. In particular, grave doubts were cast on the envisaged possibility of making pre-tax deductions and selling property. This is why the Executive Board of the University engaged the independent auditing company BRL Treuhand GmbH in Hamburg to carefully review all elements of the financial plan. The expert auditors came to the conclusion that “within the scope of our review, there are no indications suggesting that the funding requirement of 60.3 million euros cannot be fulfilled through the intended financing components.”
Since the University intends to lease certain space in the new building at weekends and during lecture-free periods, i.e. to use the space in an economic manner, it is entitled to a turnover tax refund for the leased premises. This has always been confirmed by the tax office in charge. The auditors pointed out once again that the prospective tax refund in the amount of 3.06 million euros was a solid component of the project’s financing. According to their calculations, this refund will even exceed the amount initially recognized by 0.4 million euros.

The auditors also looked at the revenues from selling University property. They found that the amounts recognized were plausible. According to the expert opinion, leasing large space at the campus in Volgershall—this is what the University intends to do before selling the property—will not pose any risk to the financial concept. The auditors pointed out that additional revenues could be received from leasing additional space at Volgershall and in the central building. These items have not been included in the financial plan, because Leuphana pursues a conservative financing strategy taking into account only secured income.

“For this independent audit, we intentionally selected an auditing company which has had no relations with Leuphana before. In reviewing the funding concept, we attached great importance to taking an external perspective”, explained Dr. Volker Meyer-Guckel, Chairman of Leuphana’s Board of Trustees. This way the necessary objectivity of the audit could be maintained. And “the audit results confirm once again the current financial plan. This gives us and hence the taxpayer even more certainty.”