And all of a sudden, I'm not nearly as excited about the new arena.
Not too long ago, we were told how Phil Knight's $100 million donation would spur the cost of the new arena. Now we're being told that financing is 100% public? While I understand that it is fairly commonplace to have public financing for sporting venues, this is awfully perplexing as we were told all along that private financing would cover the cost of the arena.
Now, its not as if there is some new tax that we are going to have to pay like there usually is with a pro arena. The 40 year bonds (on which UO officials expect to have to pay 11.2 million annually) will be paid back by a combination of arena revenues and DAF donations, while Knight's nest egg keeps the athletic department afloat.
That doesn't really sound terrible, but it does mean that the public bears all the risk. If there are cost overruns, or if revenue projections fall short, the public is responsible for coming up with the difference. Kilkenny believe that a safe estimate for arena revenues is $16 million--about what Arizona's program makes. But outsider say that $6-8 million is much more realistic. One thing is for sure, if Kilkenny's estimate would be true, this team is going to have to be good EVERY year.
There is also the issue of taking on this debt when a much more urgent project, a much needed $450 million renovation of our dungeon dormitories is in the works.
One thing is for sure: if the public takes this on, the pressure on the program to win big just rose exponentially. We need a big winner to cover these costs. That is, of course, if the legislature approves of this, which is no guarantee. We all want the new arena. But this change of course is very disappointing. Given a public vote, I'm not sure that I would support this plan. Not with much more pressing needs.