FAYETTEVILLE — The University of Arkansas athletic department is on the verge of closing on a $ 5 million loan for capital improvements, mostly for Bud Walton Arena, Athletic Director Jeff Long said this week.

“We’re hopeful and confident that this loan is going to go through in the next few days,” Long said. “I can’t believe that it’ll even go into next week, but I’m not certain about this.”

Documents regarding the loan proposal, including a capital projects budget plan, were obtained by the Arkansas Democrat-Gazette through a Freedom of Information Act request.

That Arkansas needs $ 5 million for facility improvements is standard fare, but the department normally goes through the Razorback Foundation, it’s private fund-raising arm.

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But Long said the Razorback Foundation is trying to build up its reserves after supporting numerous athletic department projects, notably work at John McDonnell Field, suites at Bud Walton and Baum Stadium and the Billingsley Tennis Center, in the past five years.

“What I think is important for people to know is when we fund raise for these projects, they haven’t all been completed using fund-raised dollars,” Long said. “There’s been Foundation reserve dollars used to do these facilities. Over time, they’ve spent down those reserves, and the Foundation has expressed an interest in wanting to build those reserves back up, understandably.”

Razorback Foundation President Chuck Dicus concurred.

“We have had discussions, and the athletic department is well aware of the situation,” Dicus said. “We’ve expressed an interest to try to have some time to build these reserves back to a level where we feel more comfortable with them.”

Long would not name the anticipated lending institution, which competed in a bidding process, saying he’d rather wait until the loan agreement is completed. The term of the loan is for five years, with an interest rate not to exceed 5 percent, according to an informational sheet prepared by the UA board of trustees.

The Razorback Foundation, Long said, was prepared to put forth funds toward the projects if the department had been unable to secure a loan. Some of the projects, such as the track offices, carpeting on the stairwells at the Broyles Center and protective padding on the walls of the football practice fields, have already been completed.

Many of the projects are under way, like renovations at Bud Walton Arena, and some have yet to be started.

Long said the athletic department is expecting to see an increase in revenues, starting this year, that could go toward servicing the loan.

“When we looked at all the finances of what we wanted to do... we felt it would be best at this point to take out the loan, because we know two things: One, we know the ISP / KATV contract results in... basically $ 1. 5 million beginning this year and going on each additional year, and, two, we anticipate the new SEC television contract, which comes into effect next year. We’ll see substantial increases in revenue from those.

“ Again, all things considered, looking at our financial picture, we felt it made the most sense to take out the loan now, do some of the projects sooner, rather than later, knowing that those additional funds are coming in the future. And those are guaranteed dollars, so we know they’re coming.”

A large part of the money is being used to install a retractable bleachers system and replace expensive lights at Walton Arena. Cost estimates for installing the bleachers have gone down from an original price tag of $ 2. 6 million to between $ 1. 5 million and $ 1. 6 million, Long said.

“When we had to provide all the paperwork, those were preliminary estimates,” Long said. “Once they got in and did the architectural engineering and design, it wasn’t as difficult as they thought, so an entire million dollars came off of that.”

Money saved on the retractable bleachers will likely go toward other capital improvements, Long said, adding that new roofing at the Broyles Center has been completed and is part of the projects.

“The way [the loan proposal ] is written gives us kind of broad leverage to spend it on capital facility improvements, and that’s what it’ll be spent on,” he said. “Another thing I’ll point out is we don’t have to spend all of this.

“ Yes, we’ll pay interest on it going forward, but we don’t have to spend it all. Now, I anticipate spending it all because we have all those kind of needs, deferred maintenance and things like that. We have wonderful facilities, beautiful facilities, and we want to keep them like that.”

Long said the $ 5 million loan takes the athletic department’s total debt up to approximately $ 47 million.

“That’s very low when you look at our other SEC competitors, many of them over $ 200 million in debt for their facilities and stuff,” Long said.

“We’re below average for Division I-A football schools with the amount of debt we have. So, really, the job Coach [Frank Broyles ] did before allows us to do something like this, to go into debt $ 5 million, which again, I understand sounds like a lot of money to folks in general, but when you put it into the context of our overall budget, it’s really not. And especially when you keep in mind we have these new revenues coming that we’ll be able to pay off that loan.”