September 14, 2010. University’s chief legal counsel tells paper’s editorial board that $70 million project will be built with substantial debt and “surplus funds that are being held in reserve.”
By Rhonda Swan
This week, the state Board of Governors will decide whether to allow Florida Atlantic University to borrow nearly $45 million to build a 30,000-seat football stadium. The board, which oversees the state university system and meets Wednesday and Thursday in Jacksonville, should let FAU borrow the money.
We disagreed in 1998 when then-President Anthony Catanese began the push for a football program. But Dr. Catanese, his successors and the trustees have decided that football is part of the shift from a commuter campus in Boca Raton to a four-year, residential campus, so the team and FAU would do best with a stadium on that campus. And this proposal finally matches the realities of big-time football at FAU.
Previous plans called for a $100 million, 45,000-seat domed stadium. The university should be able to pay off the loan for this scaled-down project because the financing plan, which FAU trustees approved in July, is based on conservative revenue estimates.
The university would borrow $44.6 million from Regions Bank at a fixed rate over 30 years. An additional $20 million would come from the university and the FAU Foundation and $5 million from the related Innovation Village student housing project budget. FAU is projecting $7.4 million in the first year and more in succeeding years in operating revenues from the stadium, of which $2.6 million a year would have to go toward construction debt. FAU’s study of five comparable universities that recently built or renovated stadiums, including the University of Central Florida and Florida International University, showed that attendance increased an average of 65 percent with the new facilities. FAU based its projections on an increase of just 25 percent. Ticket revenue projections assume 20,000 in the stands, even though the stadium will seat 10,000 more.
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