Will the new Colorado State University football stadium actually generate enough revenue/profits to not require a cash bailout from the students and taxpayers?
To answer this question, let’s examine the history.
The Board of Governors‘ policy and procedures manually task BOG and the administration to ”protect the universities assets.” CSU allowed Hughes Stadium deteriorate to the point of being bulldozed because of “chronic deferred maintenance,” (their own words).
Rather than court marshal the guilty parties within the administration, the BOG instead rewarded them with a new on-campus football stadium that would cost over $18 million per year for 40 years! ($12 million in debt service + $2.8 million in added operating costs + $3.6 million to replace the revenue from Hughes.)
This new stadium will be run by the same Athletics Department that, last year, required over $20 million in student and taxpayer bailouts to survive! See the Matt Stephens’ Coloradoan article on May 27, 2015.
Even the ”rose-colored glasses” estimate of stadium revenue, as forecast by the stadium builders, comes up $6 million short of the needed income.
So, how will the CSU administration overcome this lack of revenue and escalating debt?
According to the administration, they will call the stadium a “multi-event facility” and all their financial woes will disappear. This is certainly magical thinking at its worst! In the December BOG meeting, Governor William Mosher, now chairman, extolled the virtues of the multi-event facility as a revenue generator. Even the BOG financial chairperson voted no on the stadium bond motion. What does he see that the rest of you don’t understand?
Let’s now examine what events the CSU administration anticipates will occur to generate needed revenue. Bear in mind that CSU just completed a $65 million renovation to the Lory Student Center (plenty of event space there):
- Graduation/commencement: If we assume that each student who graduates will celebrate for six seconds after their name is called, then the 5,000 graduates will consume over eight hours of time (weather cooperating).
CERTAINLY NOT A REVENUE GENERATOR!
- Women’s soccer team: The CSU varsity soccer coach has declined to play his home games on the artificial turf, instead choosing to play on natural grass, as does 10 of the 11 other Mountain West teams.
NO REVENUE GENERATED HERE.
- Additional academic classrooms in the facility: The cost of these classrooms is approximately $18.2 million for 82,000 square feet, according to the June 20, 2015, Coloradoan article by Rob White. The article goes on to say that this construction will save $12 million in the long run.
The cost of the added space is $221 per square foot. Research done at the RS Means and DCD building costs websites show that straight classroom space costs between $123 and $217 per square foot to build. So, where is this $12 million in savings coming from?
DEFINITELY NO REVENUE GENERATED AND NO COSTS SAVED!
- Other events, such as music concerts: I asked the appropriate CSU sources: ”Please show me the pro-forma forecast that CSU performed for a music concert.” CSU’s answer was: ”I checked around on this and don’t know of any such document.”
NO ONE HAS EVEN ATTEMPTED TO PUT PENCIL TO PAPER!
In 2012, Entertainment + Culture Advisors, an international consultant on entertainment projects, was hired to review the revenue projections from Convention, Sports and Leisure International for the new stadium. Even ECA found the projections lacked detailed event planning by CSL and CSU. I will paraphrase their quote below:
”(CSL) should have developed detailed scenarios about music concerts and those revenue projections for the stadium.”
Maybe no one at CSU read that report!
It appears that the BOG has swallowed this multi-event facility hoax, hook, line and sinker, and the bait seems to be a RED HERRING.
The BOG policy and procedures manual clearly state the University should present a 10-year achievable financial plan before bond approval. It seems to me that CSU does not have an achievable plan. In fact, they don’t have any plan at all.
It looks like Colorado taxpayers and the CSU students are going to get stuck with a gigantic bill. Time to guard our wallets!
Before holes are dug and concrete is poured, I recommend that the BOG hire an independent, objective, sports economist to review the financial assumptions and forecasts.
– Bob Vangermeersch