The story we like best (told to us by Peter Benedict in the mid-1970's) involves Governor Nelson Rockefeller, who made the decision that there would be a University Center campus of the State University system in the state capital city. He goes to have lunch in New York City with his friend Edward Durrell Stone, and asks him if he would be interested in doing the design. Stone invites Rockefeller back to his office after the lunch, opens a drawing file cabinet full of the completed design, pulls out the perspective overview drawing, and asks Nelson if that would suit. Rockefeller, particularly liking the monumental and grandiose aspect, accepts it immediately, and soon after directs his minions to see to it that it gets built on the chosen site, formerly the property of the Albany Country Club (and, no doubt, the members being his friends too, they were also very adequately compensated for their trouble).
Now, for whom did Stone originally do the design? The University of Shiraz, in Iran, where the architecture would have been better-suited to the climate, is the candidate suggested* here. Why wasn't it built there? Because, the story continues, the Shah of Iran (he of the Peacock throne and multifarious extravagances), rejected it as being too expensive a design!! But Rockefeller, in the flush days of the early 1960's, was of course quite happy to spend the New York taxpayers' money on it. (Well, at least we got something tangible and distinctive for the money, for a change).
*The other candidates, all of them in hot or at least non-snowy winter climates - University of Arizona, Tucson; a university in Japan (Osaka?); other suggestions?

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The official university history; construction pictures