President John Hennessy delivered his annual address to the Academic Council on Thursday afternoon at the Jen-Hsun Huang Engineering Center. At the meeting, the president touched upon the state of finances and development on the Farm before launching an hour-long discussion on Stanford’s proposed New York City Applied Sciences Research and Educational Campus.

Hennessy addressed finances first, stating that the late-2000s economic crisis served as the catalyst for a series of budgetary changes. After the onset of the financial downturn, the University set a new baseline budget, reduced expenses and lowered its payout.

“This reduced payout has allowed our endowment to recover more quickly,” Hennessy said.

Fiscal Year 2010 saw the University successfully steer its endowment toward a 10-percent increase in value. This improvement notwithstanding, the president advocated vigilance and cautioned that “past performance is not necessarily an indicator of future results.”

“The economic climate and reduced federal research funding remain significant concerns,” he said.

Hennessy lauded the Stanford Challenge, now entering its final six months, for its success in fostering excellence and leadership — the five-year campaign has raised more than $5 billion, comfortably exceeding its initial goal of $4.3 billion. The Stanford Challenge has enabled the University to “provide cutting-edge facilities in support of the pioneering work” for which Stanford is known, he said.

The president also gave the Academic Council a preview of construction projects that are set to reach completion over the next few years. Construction of the Bing Concert Hall will wrap up over the next year and a half, with the first performances scheduled for January 2013. The department of Art and Art History will have a new home in the McMurtry Building, set to be designed by Diller Scofidio + Renfro (DSR). The biology building, currently on the docket to replace Herrin Labs, will be built between the Gates Computer Science and Mudd Chemistry buildings.

Hennessy quipped that he was still waiting for an alumnus to finance a restoration of the Old Chemistry Building.

The Apple of Stanford’s Eye

In late March, the University formally submitted an expression of interest to New York City Mayor Michael Bloomberg for the development of an engineering and technology research and graduate education campus there. The city is scheduled to make a final decision by the end of the year.

“Like many other institutions, we have received many invitations to consider setting up campuses and programs throughout parts of the world, especially in Asia,” Hennessy said. “While we are engaged as consultants and partners with a number of institutions around the world, we have so far chosen not to set up another full-fledged Stanford campus, primarily because we were concerned that we could not establish a permanent presence with a cohort of faculty and students whose quality matched that of our home campus.”

But New York City, he said, is different.

One potential advantage of a NYC campus is having increased visibility on the East Coast. A satellite campus could also connect the University with new philanthropic sources. Some Stanford researchers and alumni already have a presence in the Big Apple. And companies such as Google, Yahoo, Hewlett-Packard, Cisco, Sun Microsystems, Netflix and eBay have established branches there.

“New York has its own culture and strengths, which are quite different from those of our present location, and fusing that culture with the technical capabilities and entrepreneurial culture of Stanford could produce a remarkable new center for research, education and innovation,” Hennessy said.

For administrators, the opportunity to build a multi-site campus is enticing in and of itself. While Stanford already is on the cutting edge of distance education, Hennessy said universities with a presence at multiple locations are the way of the future.

The first phase of the NYC campus involves a 25-member faculty, 150 doctoral students and 300 master’s students. Information technology — namely, electrical engineering and computer science — would serve as the program’s anchor. Hennessy emphasized that the School of Engineering, the Graduate School of Business, the Hasso Plattner Institute of Design and the Stanford Technology Ventures Program would play a role at the campus from its initial stages.

Subsequent phases would see the East Coast campus expanding to take in 100 faculty members and 2,000 students. There is also the possibility of establishing an academic quarter in New York for undergraduates, much like the current Stanford in Washington program.

Hennessy’s address was followed by a panel featuring School of Engineering Dean Jim Plummer, Computer Science Chair Jennifer Widom and Robert Reidy, vice president for land, buildings and real estate.

According to Plummer, there are three questions to address at present: whether a 21st century university can have multiple locations, whether telepresence systems work well enough and whether Stanford’s entrepreneurial spirit can be replicated elsewhere.

There is one challenge, however, that seems to take precedence.

“The biggest part will be making the New York campus look, feel and be part of us,” Plummer said.

Widom noted that it would take her department “a while to ramp up” for the transition to NYC, especially with respect to hiring additional faculty members. She said the computer science department “will not lower its threshold to hire faculty” for the Big Apple center and that many CS professors have expressed interest in teaching there.

Reidy took the Academic Council on a “visual journey” of the potential Roosevelt Island site for the NYC campus. The other sites offered by the city of New York were located in Staten Island, Governors Island and the Brooklyn Naval Yard.

“It is a special place in that is oddly a place apart to the city but closely adjacent,” Reidy said of the 10-acre Roosevelt Island location.

He added that the University was “quietly trying to pursue a Manhattan location” for an alternative site. The process of “comparing and contrasting opportunities” is important, Reidy said.

According to Hennessy, the opportunity to try to recreate Silicon Valley in New York is one that cannot be passed up.

“New York is the cultural capital of the United States,” he said. But there’s more to the city, too.

“As a native New Yorker, I’m looking forward to the pizza,” Hennessy added.