Apparently they're afraid of those notorious Liberal Cooties:
At both the October committee meeting and November’s full board meeting, members discussed a perception that having the general administration staff in Chapel Hill confuses the UNC system and UNC-Chapel Hill. It also makes it look as though the Chapel Hill campus is superior to the other schools, they said.
“That’s a very minor part of this, but it’s still a consideration,” Kotis admits. “Are we the Board of Governors for the UNC Chapel Hill or the UNC system? What does it say about the link between UNCGA and Chapel Hill? Is it the favorite school? It’s like having your house near one kid’s house but not the other.”
Dude, it's the Flagship University. It was the first public University chartered by the NC Legislature in 1789, and the first public University in the *entire country* operating when it opened its doors in 1795. By contrast, it wasn't until 1931 that a "Board of Trustees" was formed to oversee the combination of three state-chartered universities (UNC-CH, UNC-G, NC State), and the BOG itself didn't materialize until 40 years after that. So yes, UNC Chapel Hill is the natural location for such a body. But this move may have a lot more to do with having an antsy real estate developer on the Board than even ideological considerations: