The UW is planning to rebuild Husky stadium at a cost of $250,ooo,000. Purportedly this cost was to be born by bond issues and paid back from private contributions and stadium revenues.
NOT SO FAST. Now it appears that of the $255,ooo,ooo, only $14.5 million has come from private sources! In other words, the stadium is to be built with $210,000,000 of state money in the expectation that income from the renovation will pay off the state????? Quite a bet for an agency in a state deeply in debt!
Isn’t this an end run around the State constitution prohibiting the State from borrowing money? Or can the State borrow from itself even when it is in debt?
Even if legal, the proposed budget assumes an increase in net revue of $14-15 million a year to pay the debt on this new loan .. an increased profit when, as far as any one has been able to tell me, the Athletic Department currently operates at a net loss when all costs, rent, administration, other overhead and instruction, are included. Are these good times for a State Agency to be making such a bet?
The loan will begin with the first project draw, which
is expected in December 2010. Interest will be capitalized through August 2013
and ICA will pay interest-only on the loan through June 2014. The annual debt
service payment will be approximately $14.3m and will be paid with revenue
from premium seating, increased Tyee donations and season tickets, and naming
rights.
From the budget document here. There is more information, including a disturbing external audit, in the The-Ave public folder.
These are really important issues that need open and full disclosure to the faculty and students. sometimes I can not help but wondering if the University of Washington is maintained for sports teams and administrators. Will there be a day when it is recognized that students (that don’t do big time sports) and faculty are not really a good business model?
I wonder if there is any other example of an “internal loan” this size?
If the Huskies are a business owned by the UW, can Phyllis Wise invest money in The-AVE too?
Also the public library for the Ave has disturbing details on the UW internal loan program that is paying for this. This is by far the largest loan they have given. Moreover, while other loans are based on fairly certain income (student fees for Hall Health or for the Student Union Building, this HUGE loan is based on the AD’s department budget .. a budget that I believe is and has been in the red for some time.
as i understand this situation, the stadium is in serious need of renovation as it is seismically unsafe; of course a modern stadium will also be more of a cash cow as the uw sells student seats on the 50 yard line to anyone willing to pay for the seat licenses etc that will be in the new stadium. the business model here is familiar to anyone who follows pro sports in the us.
the stadium needs to be rebuilt and more cash per customer is needed to pay for it. a cost is still further professionalization of uw sports. the professionalization is a trend not likely to go away, so uw choice is to go along with the trend or get left behind.
Get left behind who? Oregon, Ellensburg or MIT?
You might want to read the posts under the tag “sports!”