Office of the President
                                 June 14, 1994




                                 FCK 1+




Members, Board of Trustees:

GRANT OF MORTGAGE TO EDA ON SOUTHERN KENTUCKY RURAL ECONOMIC
            DEVELOPMENT CENTER. SOMERSET. KENTUCKY

Recommendation: that the President (or his designee) be
authorized to execute a mortgage to the United States
Department of Commerce, Economic Development Administration, on
property comprising the site of the Southern Kentucky Rural
Economic Development Center at Somerset, Kentucky, to secure a
grant in the amount of $2,000,000.
Background: As a condition of the grant from EDA, a mortgage
is required on the property comprising the site of the Center
at Somerset, Kentucky. This property was transferred to the
University exclusively for the Center and does not include the
original Community College property. This mortgage is to be
secondary to the lien of the bondholders and will provide that
the University will use the property for its intended purpose
during its useful life and if the University fails to so use
the property, the grant funds are obligated to be repaid by the
University to EDA. The proposed mortgage secures that
obligation.









Action taken:  Approved         Disapproved    _     Other_-



Date: June 14. 1994