By Zac Ezzone, staff writer for Triangle Business Journal

University of North Carolina students began classes in Chapel Hill this week with a money manager, Duke graduate and former state budget director now officially in charge of the elite school.

Lee Roberts, after serving on an interim basis in the spring semester, this month was named the next chancellor for the state’s flagship university. Roberts stepped into the role on Jan. 12 after Kevin Guskiewicz left to lead Michigan State University.

Roberts did not take the typical route to the chancellor position — he came to UNC with no past experience in higher education administration. Instead, Roberts has spent much of his career in finance in the private sector, aside from his time at the North Carolina Office of State Budget and Management under Gov. Pat McCrory.

New UNC chancellor learning on the job

While he may not have the typical experience, Roberts said he’s had conversations with other new university presidents and chancellors across the country and found everybody has something to learn.

“If you are a provost, which is a pretty common path, then you’re having to learn how the state budget works, what it means to manage a large real estate operation,” Roberts said. “I’ve had exposure to all those areas, just as examples. So, while I don’t have traditional experience, I do think I have fairly relevant experience.”

Before coming to UNC, Roberts was a managing partner and co-founder of SharpVue Capital in Raleigh, which manages private real estate assets along with private credit and equity funds on behalf of both institutional investors and qualified individuals. The firm is trying to acquire the Bald Head Island ferry system, but the deal has been held up by litigation.

Earlier in his career, Roberts spent time at Morgan Stanley (NYSE: MS), where he focused on real estate investment banking, and was a managing director of Triangle-based Piedmont Community Bank Holdings.

He was state budget director from 2014 to 2016. He was appointed to the UNC system Board of Governors in 2021 where he chaired the budget committee.

Those experiences help shape how he approaches challenges around higher education financing, a big deal when you’re leading an institution that’s a $4 billion operation.

“I do think everything ultimately comes back to the budget,” Roberts said. “The budgets are statements of priorities that are where the rubber hits the road in terms of putting resources against those priorities. And that’s an area where I feel pretty comfortable.”

During his time on the board of governors, Roberts was involved with revising the UNC system’s funding model, used when developing requests for the state budget. The model ultimately adopted is intended to better align the incentives of state funding with the strategic objectives of elected officials and the UNC system.

“Previously, UNC system schools were incentivized simply to grow enrollment in the disciplines in which it was most expensive to offer classes,” Roberts said. “The new model is much more strategic.”

Managing UNC’s assets

As chancellor, Roberts is grappling with topics he has past experience with: finance and real estate.

For example, the university, which was founded before 1800 and has its share of old, historic buildings, has significant capital project needs. This includes new construction, such as a translational research building that will create additional laboratory and research space or the university’s porthole alley project, which aims to create a new front door to the campus from Franklin Street. The goal is to strengthen the campus connection with the town of Chapel Hill, Roberts said.

Chapel Hill is undergoing its own changes, with various development projects planned on Franklin Street to help the municipality expand beyond a student-centric economy. Roberts said the university and town have a longstanding relationship that he plans to build on.

“It’s hard to think of a more historic, closer, more interdependent relationship between any municipality and any institution than the one between Carolina and the Town of Chapel Hill,” he said.

Roberts said UNC also has an ever-present list of improvement projects.

“This beautiful, historic campus comes with a longer list of repair and renovation needs than we will ever have the funding to tackle in any given year, and we need to make sure we’re doing a good job prioritizing those projects accordingly,” he said.

Developing a plan for the future of the Smith Center is part of those considerations around infrastructure. The university earlier this year began its search for a consultant to evaluate locations for a potential new arena.

“We’ve actually played in the Smith Center almost twice as long as we played in Carmichael, which is hard for some people to believe,” Roberts said. “But it’s now an older building with a lot of repair needs, and we have to decide the best strategy there.”

Guiding UNC’s growth

Tied to the infrastructure challenges are discussions about whether, and to what extent, the university should try to grow. While North Carolina is a fast-growing state, the university has not grown its enrollment much in recent years. The school had under 21,000 undergraduate students for Fall 2023, about 1,300 more than in Fall 2020. Graduate student numbers increased by about 800 during the same period to 9,000 overall.

The result has been that a shrinking percentage of UNC-Chapel Hill students come from high schools in the state. That number will likely continue to drop if the university does not make changes, Roberts said.

“If we don’t do anything that (percentage) will continue to drop,” Roberts said. “So, we need to decide, should that continue or should we look at measured growth? And if we do grow, by how much and over what time period? And what are the implications for our campus, for our faculty workload, for our infrastructure, our dining halls, our dormitories, our student support services?”

Without significant growth in enrollment, it’s likely that at some point tuition, which has remained flat for years, will have to increase to keep up with funding expenses.

The preceding article originally appeared on August 23, 2024 at The Triangle Business Journal’s website and is made available here for educational purposes only. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 106A-117 of the U.S. Copyright Law. Photo above: UNC-Chapel Hill Chancellor Lee Roberts by John Hansen Photography