UND has accounts with the Bank of North Dakota, but its money is separate from the rest of the state money. They aren't even on the same accounting system.
Please link the press release where UND said it won't be serving students on campus in the future.
Most of the buildings being torn down are dumpy old apartments. As for the academic buildings, it's likely cheaper to build new than to refurbish several of them. Also, the campus added 325,000 square feet with the new med school and opened up a lot of space in the old med school for consolidating several older buildings.