[Vision2020] BSU Luxury Box Proposal

Wed Jan 3 00:27:45 PST 2007

It makes sense to strike while the iron is hot and right now is the peak time for bSU to improve their facilities.  Idaho should step up to the plate and as well considering they're now in a prestigious conference facing very good teams like bSU, Hawaii, Fresno State (in most years), UNR, and a resurgent San Jose State.

-Scott

----- Original Message ----
From: Tim Lohrmann <timlohr at yahoo.com>
To: vision2020 at moscow.com
Sent: Tuesday, January 2, 2007 9:30:56 PM
Subject: Re: [Vision2020] BSU Luxury Box Proposal

Yeah, I'm not sure some of your assumptions here. .

  After all, why was BSU in a BCS game such a big deal?

  Because it's so very rare for a school from the WAC or a similar conference to be in a major bowl with a huge payoff. 
  It was the sheer unlikelihood, the David/Goliath or Cinderella-story appeal that made it such a big deal. 
  Utah, from the Mountain West was in a BCS bowl a couple of years ago.
   But before that it had probably been 20 years or more--long before the BCS was even developed--since a similar team from a similar school had been in a major bowl. 

  So what's the point about all that?
   It's that a payoff anywhere near the big one that BSU received this year is certainly not anywhere near guaranteed every year. 
  In fact history shows that it will likely not happen
 again for decades. If ever.

  If the growing population of Boise is hungry for sports entertainment then this project isn't the answer. Exclusive luxury boxes are for the benefit only a very few---clients of well-heeled alumni, corporate officers, and politicians enjoying the generosity of lobbyists most likely. 

  If the goal is to provide Bronco stadium access to all the people of Boise then the money should be spent for more seats that the average fan would actually have some hope of some day sitting in. 

  I'm also unsure about the comparison between Bronco stadium in Boise to the stadium that the Broncos played in on New Year's Day.
  The stadium in Glendale, AZ was built to house an NFL team in a metropolitan area of almost 4 million people. 
  BSU's stadium is the home for a school with an enrollment of around 18,000 students full and
 part-time students in a city approx. 1/8 that size.  
  So amounts of money for stadium improvements should reflect those realities. 

  Also, BSU beat the #7 team in the nation. A great accomplishment to be sure, but that doesn't make them national champions. The game between undefeated Ohio State and Florida will decide who holds that title. 

  Anyway, maybe this makes some sense and maybe it doesn't. 
  But $35.9 million is a lot of money that will have to be paid back for a long time. 
  My point is that the State needs to analyze this plan very carefully before just giving it a post-Fiesta Bowl afterglow rubberstamp 
  Some real financial disasters in higher education have gone down in Boise recently. 
  It just makes sense to make sure none happen again. 

  Later,
    TL

Donovan Arnold <donovanjarnold2005 at yahoo.com> wrote:
    They are actually going to need it. 2.5 million every year is little to pay if you get 6.5 million back every year in just one game, and a good investment. If I asked you to invest $2.5 dollars and I would give you $6.5 back, would you accept or decline the deal?

  28 million in Boise is not much money considering the population is over 500,000 and will continue to grow at an incredible rate for at least the next 10 years. I would gladly pay $2.80 a year for the level of entertainment provided and the millions of dollars Broncos bring to Idaho every year, including UI and our educational program. 

  BSU is a National Championship College Football Team. $28 million is a drop in the bucket. The stadium they played in last
 night cost 1/2 billion to build, compare that to just a $30 million improvement to the blue turfed stadium the Broncos have to play in. 

  Happy New Year,

  Donovan J Arnold

Tim Lohrmann <timlohr at yahoo.com> wrote:
    I hope the State Board of Education goes over this little scheme with a fine-toothed comb.
  A little priority check would be a good idea here, don'tcha think?
      TL

http://www.idahostatesman.com/124/story/65888.html
  January 02, 2007  Broncos will ask State Board for approval Monday   
 GLENDALE, Ariz. — Boise State will ask the State Board of Education on Monday for approval to build a luxury suites/club seats/press box addition to Bronco Stadium. 

  The project will cost $35.9 million, with $28 million financed through a bond sale. The athletic department will pay for the rest in cash.       If the board approves, the university plans to break ground by March 1. The final step would be to seek approval for the bond sale at the Feb. 22-23 board meeting.   The addition would add 38 luxury suites, 43 loge boxes and 787 club seats to Bronco Stadium in time for the 2008 season.       "It has been an unbelievable experience," said Curt Apsey, the senior associate athletic director for advancement who has spearheaded the premium seating sales. "I've learned a heck of a lot. It's exciting. I think it's going to be a facility like no other, and we're
 going to do it right. And when you're spending that kind of money, that's what you've got to do."       Monday's meeting, which likely will be held by teleconference, is critical to BSU's timeline. Construction is expected to take 15 to 18 months. That means a March 1 groundbreaking is necessary to ensure a Sept. 1 opening.       "If it starts to get past (March 1), I would be concerned about the plan … to go in '08," Apsey said.       The structure, which will be built behind the west grandstands, will include:       • Thirty-eight luxury suites (16 seats each) — 33 for sale and five for university use. BSU has sold 29 of them and expects to sell the rest within a few weeks. Leases cost $42,000 or $48,000 per year, including game tickets, depending on location.       • Forty-three loge boxes (four seats each) that have sold out. The open-air boxes are below the club seats. They cost $12,000 per
 year.       • A total of 787 club seats, which are sold individually for $2,200 per year. BSU has commitments for 410.       • Club rooms that serve as gathering and eating places for premium seat holders.       • A faculty club room on weekdays that will double as the loge club room on game days.       BSU is wrapping up the design process with FFKR Architects and Layton Construction, the same companies that built a similar facility at the University of Utah.       "We've corrected for some of the things they might not have done perfectly," BSU president Bob Kustra said. "I think people will be taken aback by this."       BSU will pay $7.9 million of the cost with cash. The school has raised about $3.85 million through donations and naming opportunities and already had $1.9 million slated for the project.       That leaves a $2.15 million gap that BSU still needs to
 fill.   The $28 million will be financed over 30 years with a debt payment of about $2.5 million per year, including a 20 percent reserve held by the university in case of a revenue shortfall.       The school recently was informed that it would keep its "A-1" bond rating with the Moody's, the top rating possible. Moody's is a bond-rating service. School officials thought they might lose their rating because of BSU's growing construction debt.   The rating will allow BSU to get a better interest rate for the bond sale, officials said.       BSU will pay back the debt with revenue from the premium seating. The school estimates it can make the annual payment by generating 83 percent of the possible revenue.       The athletic department also will contribute $600,000 per year to the academic capital projects fund to compensate for using some of the university's debt capacity. That amount increases by $100,000 every five
 years for the life of the loan — a total of $25.5 million in 30 years.       Any additional revenue will go to athletics, which can use the cash for other projects.   The premium seating comes with 3-, 5-, 7- and 10-year leases, so BSU should have close to full occupancy for at least the first three years.       "The athletic department has done an outstanding job of selling the suites, the club seats, the loges," Kustra said. "Our boosters have stepped up to the plate. It's really reassuring going into this board meeting knowing we have people obligated to pay off these suites."       Contact reporter Chadd Cripe at ccripe at idahostatesman.com. 

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