UA's trustees OK adding to stadium at $160M cost

Vote 8-2, with board’s Pryor voicing disfavor

An artist's rendering shows what a proposed expansion to Donald W. Reynolds Razorback Stadium in Fayetteville might look like. The UA athletics department estimates the project would add about 4,800 seats and cost $160 million.

PETIT JEAN MOUNTAIN -- Trustees approved Thursday an expansion of Donald W. Reynolds Razorback Stadium, voting 8-2 in favor of the estimated $160 million construction project despite a lengthy statement in opposition from board member and former U.S. Sen. David Pryor.

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Arkansas Democrat-Gazette

Information about Razorback football attendance.

The University of Arkansas System board cleared the way for an increase in premium seating after hearing Fayetteville officials say that athletic department revenue will pay off debt from a $120 million bond for the project.

Pryor -- who along with Cliff Gibson voted against the project -- spoke for nearly 15 minutes while describing his concerns.

"It is a project that, in my opinion, we cannot justify with all of the priorities that we have throughout our education system," Pryor said.

With interest and other expenses associated with the planned bond issue, Pryor said, the total cost will be more than $220 million. He said a previous renovation to add 21,000 seats done before the 2001 season got more "bang for our buck." The final project cost was about $110 million for the earlier renovation.

Rather than a project undertaken to benefit students, "this is about money, that's what this is about," Pryor said of the plan.

The stadium's capacity will grow to about 76,000 from 72,000, with expansion mostly involving the stadium's north end. UA Athletic Director Jeff Long said after the meeting that construction would begin after the final home game of the coming football season and that the goal is to have renovations done in time for 2018.

Long told trustees about the strength of the UA athletic department's finances and the market demand for premium seating.

"We're probably in the strongest financial position in the history of Razorback athletics," Long said. He cited yearly revenue of more than $100 million.

UA Chancellor Joe Steinmetz praised the department as being one of 24 "self-sufficient" entities in college sports.

"I will never allow funds from students or the academic side of the university to subsidize athletics," Steinmetz said.

But Long emphasized the importance of football dollars in supporting other sports on campus.

"It's important that football be sustained in a way that we continue to generate those revenues," Long said.

Separately, Pryor, vice chairman of the board, voted against a resolution approving Fayetteville athletics-related salaries above state line-item limits. In an interview, he said it was a symbolic vote against "abnormal" salaries, adding that he'd never previously opposed such a salary resolution. Bond approval for the stadium project will require a separate trustee vote, and Pryor told the Democrat-Gazette that, as of now, he expects to vote against it.

Long told trustees that athletic department debt now totals $56 million, requiring an annual debt service of $10 million. The current debt load that's included in that total will decrease to $13 million by 2022 and zero by 2028, Long said, adding that "we are prepared to be able to take on more debt at this time."

To cover $40 million in costs not financed by the bond, Long said $10 million is coming now from the athletic department to pay for ongoing design and pre-construction work. The Razorback Foundation, a public fundraising organization that supports UA athletics, also has committed to making $10 million available as a "backstop" to support the project if necessary.

But Long emphasized the sales of new premium seats as contributing to the project costs. The department projects $10.2 million annually from "ticket sales and donations" to support the stadium project, Long said. By factoring in the soon-to-be retired debt, Long also said the athletic department would see additional revenue from that projected $10.2 million annual figure.

The money could then be used for athletic department purposes beyond the stadium renovation, which also involves upgrades to existing elevators, concourse connections to the new north end and a new video board. The plan is also to rebuild the Frank Broyles Athletic Center, now on the stadium's north end, and upgrade some locker room and other team facilities.

Long said Razorback stadium suites -- which total 134, according to documents released in advance of Thursday's meeting -- have been sold out each of the nine years he's been UA's athletic director.

"But I've been told, at least back 16 years, our suites have been 100 percent sold out," Long said of suite sales.

The suites vary by size but add up to roughly 2,000 individual seats. In 2014, suites at Razorback Stadium generated $3.8 million in revenue, according to a response from UA to a Democrat-Gazette request for information about suite sales.

Since then, the price of suite season tickets has increased, now going for $2,100 or $2,400, depending on their location in the stadium. Elsewhere, some season ticket prices have risen, while the cost for season tickets in the stadium's upper deck has been cut.

Neither design nor cost estimates have been finalized, but preliminary plans call for suite seating to increase by roughly one-third to about 2,700 seats, including about 300 seats in the new Founders Club suites on the east side of the stadium. These suites have been previously described by Long in UA documents as having "the highest level finishes."

Other options include new semi-private outdoor loge boxes, as well as additional numbers of club seats.

Long told trustees there are "signed commitments" for "over 20 million of capital investments in this project for new suites in the stadium," adding that UA has yet to market the new loge boxes or additional club seating.

"When we sell everything out, we will exceed that $40 million," Long said.

Gibson asked during the meeting if the university had considered alternate uses for money rather than spending it on the expansion project. Long replied to Gibson's question by stating that the funds in question would not exist without the expansion and sales of the added seats.

Gibson, an attorney from Monticello, told the Democrat-Gazette that he would have preferred to delay the vote but voted against the project because there was a lack of information about potential alternate uses of funds.

Other trustees spoke in favor of the project during the meeting. John Goodson, an attorney from Texarkana, said the project has been in the works for years and that a vote of no would amount to a no-confidence vote for Fayetteville campus leaders and UA System President Don Bobbitt, who also recommended approval for the project.

Ben Hyneman made the motion during the meeting to approve the plan after emphasizing that football revenue -- which Long said tops $60 million -- support other, nonrevenue sports at UA. Hyneman, president of a Jonesboro-based insurance company, also noted that athletic department revenue contribute directly to the rest of the campus, describing millions from athletics that have supported some academic construction projects.

"I want everyone to remember that support and investment in athletics is not mutually exclusive with support and investment in academics," Hyneman said.

Metro on 06/17/2016