By Rock Mayock 11:00 p.m. | Last week we started our evaluation of the University of California’s planned renovation of Memorial Stadium by providing a broad overview of the project. This week we will delve deeper into the planned renovations, the anticipated renovation expenses and the funding to cover these expenses.
As previously discussed the Memorial Stadium renovation plan has been broken into three phases. Phase I involved the construction of the Student Athlete High Performance Center (SAHPC). Phase II involves the currently in progress renovation and retrofit of both end zones as well as the west side of Memorial Stadium. Phase III involves the renovation and retrofit of the east side of Memorial Stadium. For the benefit of our wonderful readers, we have taken the liberty of breaking down each phase of the project. Tonight we will look at Phase I.
Phase I, SAHPC
The first phase of University of California Chancellor Robert Birgeneau’s proposed renovation of both Cal Memorial Stadium (CMS) involved the creation of a state of the art athletic training facility which would later evolve into the Simpson Student Athlete Performance Center, or SAHPC. The particulars of SAHPC are detailed above.
SAHPC’s construction has suffered delays ever since its 2005 inception. The most notable obstacle was the nearly 3 year sit in/legal battle waged by a group of environmentalists known as the Tree Sitters. The Tree Sitters objected to removal of old growth oak trees and successfully delayed ground breaking of SAHPC until Spring 2009.
Upon its completion in 2011, SAHPC reached the status of the preeminent athletic training facility on the West Coast. Achieving this status came at a significant cost.
The original budget for SAHPC was $111.9 million. As is the case with most construction projects SAHPC’s final cost was over budget to the tune of $153 million. To cover this exorbitant expense Cal devised a creative payment plan. Per the Financial Models for California Memorial Stadium & the Student Athlete Performance Center memorandum issued by Vice-Chancellor Nathan Brostrom, the finance structure of SAHPC’s construction cost would come from a combination of private donations and the sale of bonds. A primary stipulation cited in Brostrom’s memo was that no funds external to Intercollegiate Athletics would be used to make payments toward any phase of the renovation project.
The funds raised through donations and bond sales were subsequently invested in a fund functioning as an endowment (FFE) managed by the UC Berkeley Foundation. The FFE would yield regular annuity payments which would provide funds for debt satisfaction as well as supplemental income for Athletic Department operations.
To date Cal has collected approximately $66 million, or 43%, of SAHPC’s $153 million construction cost via private donations. It also bears mentioning that another $136 million was raised through the sale of bonds. Interestingly enough, Reuters reported that a key driver for Cal’s bond sales was the university’s ability to raise funds via increased tuition and fees. This is a crucial element to consider as we evaluate Phase II.
Phase I Total Cost: $153 million
Later this week we will break down Phase II of the CMS project, the retrofit/renovation of both end zones and the west side of Memorial Stadium.