UA stadium in clear to grow; board approves bond issue to add seating, enclosed venue

By: Aziza Musa
Published: Friday, September 9, 2016
A $160 million construction project for Donald W. Reynolds Razorback Stadium, shown in this artist rendering of the expansion, was approved Thursday by the University of Arkansas System board.
A $160 million construction project for Donald W. Reynolds Razorback Stadium, shown in this artist rendering of the expansion, was approved Thursday by the University of Arkansas System board.

Calling the Hogs is about to get louder.

Donald W. Reynolds Razorback Stadium is to grow from its current capacity of 72,000 to about 76,000 in September 2018. University of Arkansas System trustees on Thursday gave their blessing to the last element needed for the project -- the go-ahead for the University of Arkansas athletics department to issue up to $120 million in bonds.

The department can now move forward with the estimated $160 million project that will fully enclose the 78-year-old stadium. The approval didn't come unanimously from the 10-member board: Trustees David Pryor of Little Rock, the former U.S. senator, and Cliff Gibson of Monticello -- both of whom had voiced concerns throughout the process -- gave the bond issue a no vote.

Along with the bond issue, trustees on Thursday also approved bringing on board Little Rock law firm Mitchell, Williams, Selig, Gates and Woodyard as bond counsel, and four bond underwriters led by Stephens Inc.

Now, UA will cross the t's and dot the i's on the paperwork and monitor the market to determine the best time to sell the bonds, said athletics department spokesman Kevin Trainor.

The athletics department plans to use ticket revenue to pay back the general-obligation bonds over a 20-year period. It is expecting to pay about $6 million annually for the first five years and about $9 million for the rest of the time, Trainor said.

The project includes new premium seating, including Founders Club Suites on the east side of the stadium, outdoor loge boxes -- a cluster of four to eight seats separated from others by a partition -- and club seating. The new seating areas will connect the concourse to the east and west walkways, improving the stadium's safety and security systems, the department has said.

UA also will add new elevators at the northeast and northwest corners, and a new video board at the south end of the stadium. The project also calls for redoing the Broyles Athletic Center, which is at the north end zone and will extend out into the parking lot, and for a new game-day locker room, and a training room.

Design is still ongoing, the athletics department said Thursday, adding that details such as fan and donor amenities are still being developed. Athletics officials are hoping to start construction of the north end zone addition by removing the existing video board and demolishing the athletic center in December. They want to have everything done by the start of the 2018 football season.

The expansion would be the first since 2001, when UA added about 21,000 seats for $110 million by enclosing the south end zone and adding some club seating.

For years, UA has wanted to fully enclose the stadium.

In 2009, UA hired consultants to create a facilities master plan, which said the stadium didn't have enough premium seats to keep up with demand for tickets, suites and club spaces.

The university has said that all 134 suites currently in the stadium were sold out last season, and 98 percent of the club seating was sold out. Last season, the average attendance of the home games was 70,281.

At the time, the plan called for maximizing "premium amenities" over increasing the number of seats in the north end zone.

In 2013, the university revisited the north end zone expansion, this time producing a feasibility study on the enclosure and a market study for seating and amenities. A little more than 7,000 Razorback Foundation donors, football-season ticket holders and occasional football-ticket buyers were surveyed for the study, which among other things gauged interest in new north end zone club seating.

UA took the matter to the board in January for its first approval to solicit commitments for capital contributions and sales of new suites, loge boxes and club seats.

From then on, Pryor began noting his concerns.

In a March letter to UA officials that came with 33 attached questions about the stadium project, Pryor said: "It is very possible that this stadium project and related bond issue will become the largest commitment in our state's higher education history, and I urge caution before we embark. In a time when higher education across the nation is receiving extraordinary scrutiny and examination on issues like tuition, soaring student debt, and flat or declining state appropriations for higher education, we, as trustees, have a special duty to speak to these concerns."

Jeff Long, UA's athletic director, reiterated to the board Wednesday, when a board committee met on the stadium matter, that the expansion and upgrades will not fall to students in the form of fees. UA is the only public four-year university in the state that does not charge students a fee for athletics.

He has said in documents that the athletics department operated with a balanced budget of $97.5 million for the 2015-16 fiscal year and that, since joining the Southeastern Conference Network, the department has increased share going into academics to $2.31 million.

UA athletics is about $55 million in debt but will retire those debts, freeing up more money to pay off the bond issue. The highest costs the department is expected to pay annually is $14.5 million for three years, board documents show.

Athletics has put $10 million in reserve and has another $10 million from the Razorback Foundation if needed, Long said, adding the department wanted to get $20 million from suite sales.

On Wednesday, Long said he had secured signed commitments of $27.3 million for suite seats and has another $4.3 million in commitments to be processed. The athletics department hasn't even started selling loge box or club seats, he said.

"You think that your $20 million number was conservative or there's just that much enthusiasm in the Razorback nation?" trustee John Goodson of Texarkana asked regarding the suite-sales estimate.

Long said the department knew it was a conservative estimate.

"We hoped and expected to surpass that number," he said. "But we also wanted to make sure we were doing a good job, being good stewards of the process and making sure we didn't overstate."

He added that UA athletics also has about $13 million from the SEC Network that it could fall back on to pay the new debt, if needed.

On Thursday, before the trustees' vote on the matter, Pryor thanked his peers for allowing him "ample opportunities to express his opposition" and again stated he would vote against the project.

Gibson, the trustee from Monticello who also voted against the project, said in an interview Thursday that he wanted a written determination from a bond firm that states other UA System campuses -- especially the University of Arkansas for Medical Sciences -- would not be affected by UA-Fayetteville's bond issue.

The Fayetteville school's vice chancellor for finance, Tim O'Donnell, said Wednesday that it would not affect other campuses.

Gibson also said Thursday that there should have been "a careful study" of what other uses that money could have been put to. For example, he said, it could be used for tuition relief, underpaid faculty members or new dorms.

"We should have had the benefit of that in trying to make an informed decision," he said. "And it may point the arrow at the stadium, but we don't know.

"Only history will tell what was the right thing to do."

A Section on 09/09/2016



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