Byline: Greg Bolt The Register-Guard
The price tag for the University of Oregon's sought-after new arena, described as a 'world-class 'theater of basketball,' ' could be well above $200 million, again making the project one of the most expensive of its size ever.
According to documents obtained under the state public records laws, the UO estimated last year it would take $213.5 million to pay for the project once land costs are figured in. That's substantially more than the $160 million estimate used recently by university officials.
Allan Price, the UO's vice president for advancement, said the lower price was an estimate based only on costs directly related to construction. He said the university does not consider the cost of the former Williams' Bakery, where an arena would be built, or the former Romania car lot, which could be used for parking, as part of the arena's costs.
Price acknowledged that direct construction costs at the time the estimate was written early last year were put at about $175.5 million. He said that would have built an arena that would have been among the best in college sports and met the university's goals.
'The best-case scenario is we would be able to build an arena that is going to serve the needs of the university for the next 100 years ... a facility that's going to help stabilize the budget of the athletic department and move it from self-supporting to self-sustaining,' he said. 'A building like that is not inexpensive.'
The university has struggled to get its arena project restarted after UO President Dave Frohnmayer pulled the plug on an earlier effort three years ago. At that time he said the cost had become too high - an estimated $180 million not including a parking garage. That would have been the most expensive college arena ever.
The UO wants a replacement for aging McArthur Court, which doesn't meet current needs for fan amenities or revenue generation. A new arena with private suites, club seats and better concessions would help produce revenue needed to keep the athletic department's budget in the black for the long term.
The renewed effort seeks a 12,500-seat arena complex of about 400,000 square feet. That's smaller than the 14,000-seat plan in the earlier arena design.
But the UO still wants the best arena it can get. The Web site of TVA Architects, which is working with the firm Ellerbe Becket on the design, calls the proposed facility a 'theater of basketball' that evokes Mac Court's history while 'addressing present-day needs for safety and modern amenities.'
Price said he wouldn't use the same words, but said the university doesn't need to make excuses for trying to build the best arena it can. He said that's the philosophy it brings to all its building projects - academic and athletic - as it works with donors to fulfil their visions as well as meet the university's needs.
'I don't think the university has anything to be embarrassed about, and I think we have a lot to be proud of,' he said. 'It would be a lot easier to say let's just vanilla everything, and I'm proud that the university doesn't do that. I think we should aspire to greatness where that opportunity presents itself.'
But Price cautioned that the documents are just a snapshot of the vision for the project a year ago and not the numbers that would be used in a final design. And the numbers will continue to change; in addition to rising construction costs, changes in the design also could reduce the cost, by moving the academic support center out and building it elsewhere on campus, for example.
Two of the released documents, labeled 'Sources & Uses,' indicate a direct construction cost of $128 million with an additional $34.5 million for architects fees, permits and other 'soft costs.' Bond interest during construction and underwriting fees add another $7 million.
Other costs include $5.6 million for reserves and $5 million for a post-construction building fund.
In addition, the UO already paid $25 million for the former Williams' Bakery property where the arena will be built and $5.6 million for the former Romania car lot. The university also could spend $2.5 million to buy several smaller properties adjacent to the bakery site.
Price said the bakery site is part of the university's long-term strategic needs, and the UO would have bought it at some point in any case. He said the time was right not just because of the arena but also because the bakery's owners were trying to decide whether to expand the operation, which would have made it unavailable for many years.
Much, but not all, of the money for the arena is expected to come from private donors, a total contribution one document placed at $123 million. Another $55 million would come from bonds repaid from arena revenues, either by the university or National Championship Properties, the private nonprofit group formed by the UO Foundation that is expected to build, own and manage the arena.
Those two sources would cover most of the direct construction costs. The university previously sold bonds to purchase the bakery property and used a portion of the proceeds from the sale of the Westmoreland student housing project to buy the Romania property.
While the Romania property eventually could play some role in the arena through a mixed-use or other type of development that includes parking, the UO is considering that project separately, Price said.
As with the earlier arena effort, most of the private money again is expected to come from a small number of donors. Phil Knight, the co-founder of Nike and the UO's most generous donor, is widely expected to provide the bulk of the private funding.
How much is something the university never has been willing to discuss. Details also are scarce in the documents, and the UO blanked out some donor information before releasing some documents to The Register-Guard.
On one, a line that should indicate the source of $100 million is blank. The line below that lists 'UofO and other Donors' at $18 million.
Price said in the original document the blanked-out line read 'Title Donor.' He said that was meant as a placeholder to indicate an amount the university hoped to receive from a small number of key supporters, not an amount that donors had said they would give.
Even considering just construction-related costs and reserves alone - an estimated $175.5 million a year ago - the UO arena still would be among the elite college arenas in terms of cost. The next most expensive arena recently built is the 15,000-seat John Paul Jones Arena at the University of Virginia, with a construction cost of about $150 million, including a parking garage and new road.
The city of Louisville, Ky., is planning a 22,000-seat downtown arena that will be the home of the University of Louisville basketball teams. It is expected to cost $250 million.
