Revenue projections that outline success for the new on-campus stadium’s finance plan were generated by the stadium’s architect, Populous, and project management firm ICON Venue Group, which is also a member of the Community Design Development Advisory Committee for the stadium.
The Colorado State University Board of Governors approved a finance plan for construction of the $220 million stadium in an 8-1 vote at the CSU Global Campus. Treasurer Joe Zimlich voted in opposition over concerns of the University’s increasing debt.
Chair of the Economics Department Steven Shulman said CSU will be put on a path of permanent spending due to this project.
“ICON Group … is the one that produced the report saying that the stadium will pay for itself, and that is a conflict of interest,” Shulman said.
He said if revenues are insufficient to pay debt payments for the new stadium, he believes the money will be taken out of the academic side of the University.
“The plan and the money raised in donations will be enough for the years when in construction and before the building has started turning a profit so the funds will not be student dollars,” President of the Associated Students of Colorado State University Sam Guinn wrote in an email to the Collegian. “(If) Hughes received the renovation, 30 million directly from students would have needed to be paid.”
ICON Venue Group was announced as a consultant to help with the feasibility of an on-campus stadium, according to a press release by CSU in March 2012. As project manager on the advisory committee, ICON provides input and feedback on the development of the new stadium.
ICON is responsible for the construction of stadium and arena projects around the world, which include the Pepsi Center and Sports Authority Field at Mile High.
In the press release, Vice President for University Operations and co-chair of CSU’s Stadium Advisory Committee Amy Parsons said ICON will work closely with the committee to create a strategy which captures issues and opportunities related to the project.
“This is an issue that threatens the University’s fundamental educational mission,” Shulman said. “This report makes ludicrous assumptions about the future revenues that the stadium is supposed to bring in.”
Although market rates are at a historic low, financing the new stadium will take 40 years, according to the plan presented by North Slope Capital Advisors Thursday in Greenwood Village.
President of North Slope Capital Advisors Stephanie Chichester said CSU’s current debt is close to $800 million.
The estimated construction costs are currently $220 million, but the University will issue $242 million in bonds so those funds will be available to make payments before revenue has been generated, according to Bridget Mullen, director of budget and finance for the CSU System.
Chichester said the total cost of financing the stadium will be $451 million once the revenue bonds with interest are paid for after 40 years.
“If we had been before you a year ago today, the total repayment on this recommended plan would have been closer to $520 million,” Chichester said.
She said all revenue received by the date of the first payment, March 1, 2018, will be in a repayment fund to reduce the possibility of a general fund hit.
“This is a project built off private funds, philanthropy and revenue bonds that does not use tuition,” CSU President Tony Frank said. He said the risk of a general fund hit is extremely low.
Chief Financial Oiffcer Rich Schweigert, a member of the Board of Governors, said the market is at a historic low, and the University could not have timed this project better.
Documents from the Board of Governor’s meeting from August 7, 2014, foreshadowed changes related to the stadium. The documents state that self-generated support for the future of athletics can be made through certain key investments.
Be Bold is a group of supporters who are advocating for athletics and academics through the new on-campus stadium.
“From all sides there is hidden revenue and donations. … Obviously corporate sponsorships and premium seating that doesn’t exist at Hughes,” said Tyler Shannon, a CSU Alum and member of Be Bold.
Documents from the Board of Governors meeting from August outlined self-generated revenue in the form of tickets, concessions, parking and logo licensing revenue for trademark merchandise.
“With all problems facing higher education, is this where we should put our money?” Shulman said.
Collegian Assistant News Editor Christina Vessa can be reached online at email@example.com or on Twitter @chrissyvessa.