Coastal Carolina University’s football stadium expansion project remains in a holding pattern pending approval from the South Carolina Commission on Higher Education, which chose not to move the project forward in a committee meeting this month.

That isn’t being seen as a roadblock or significant setback by university officials, though, but rather just part of the process.

Coastal Carolina is seeking phase two state approval for bonding for a budget not to exceed $38 million to more than double the seating capacity of Brooks Stadium in conjunction with the Chanticleers’ upcoming move to the Sun Belt Conference and jump up from the NCAA’s Football Championship Subdivision to the Football Bowl Subdivision.

“We’re going through the usual process for getting approval for a project. We do this regardless of whether it’s an athletic or academic capital project on campus,” Coastal Carolina athletic director Matt Hogue said. “I think right now because of the scope of this project, everyone wants to make sure that everything we’re doing is on track and we respect that.

“And I think there’s a lot of complexity to it, there’s a lot of information sharing that’s having to take place and we’re just continuing to provide everything we’re being asked to provide with ultimately the plan to have the outcome that we need.”

Members of the CHE reached by phone last week referred all questions to interim executive director and director of fiscal affairs Gary Glenn and chairman Tim Hofferth.

“The matter is still pending before the Commission on Higher Education as it has not yet been favorably considered by the Finance & Facilities Committee,” Glenn responded in an email. “Should Coastal Carolina University choose to bring it back, it will be considered at our scheduled meeting on May [5] assuming CCU meets the schedule for submission of materials.”

Glenn did not respond to follow-up emails asking what such a decision will hinge on or what Coastal Carolina has to provide or show to receive approval, and Hofferth did not return multiple messages left to his cell phone and business phone last week.

“It’s way too early in the process and there’s too many different steps we have to go through to start trying to handicap it in any way,” Hogue said.

The university announced its decision to accept an invite to the Sun Belt and prepare for a move to the FBS on Sept. 1, later received initial state approval to hire an architect and after receiving approval from its board of trustees it then released the $38 million budget figure and renderings of the intended stadium plans in December. Those plans included expanding Brooks Stadium from 9,214 seats to around 21,000 by closing in the seating bowl on the end of the field by Adkins Field House, adding an upper seating deck on the S.C. 544 side along with a suite level in the middle and adding seats to the other side as well.

At the time, the university was hopeful it might secure phase two approval as early as the CHE’s February meeting so the bonds could be issued for the project and the school could advertise and formally hire a contractor, but the Committee on Finance & Facilities decided at its most recent meeting April 7 that it still needed more information, Hogue said.

“We feel like we have put a good plan together. We feel like in terms of building our facility we know what our plan is and what we’re trying to do,” he said. “We still are very confident in that plan. I think we just need to continue providing enough information that it’s all understood.”

According to the official minutes from the Feb. 4 meeting of the committee, Glenn noted that the original budget brought to the group in October was projected at $19 million before doubling to the current $38 million figure. Stacie Bowie, Coastal Carolina’s vice president and chief financial officer, responded to the committee that in October at the onset of this project the university was not yet sure how much the additional seats would cost or what the additional ADA and fan circulation requirements would be until talking to an architect, that the initial budget parameters did not include considerations for renovations on the side of the field with the existing press box and suites building and that the “complex footprint” of the stadium location, backed up tightly to S.C. 544, impacted projected costs as well.

Bowie explained to the committee that “the price is driven by the fact that they have to support a structure that might be taller than if they had land to spread out and the fact that they needed to add structure all over the stadium in order to put the additional seats various places,” according to the official minutes.

Hood Temple, the chair of the Finance & Facilities Committee, expressed during that February meeting that the committee was not given enough time to review the increased budget request for the project, and according to the official minutes, “he further stated that his major concern is with the source of the revenue.”

In response, as per the official minutes, university provost and executive vice president J. Ralph Byington noted that the project had been thoroughly vetted by the university’s board of trustees and touted the group’s “history of fiscal responsibility.”

He further stated, quoting the minutes, that “the questions and discussion of $19 vs. $38 million were had in that board meeting, and that the university was making the right commitment for the university as a whole,” and that “when talking about the move to the Sun Belt, it’s not just athletics; it’s the profile of the university and the ability of the university to expand the outreach.”

Temple then noted that the particular bonding being sought was not traditional and “he would like to know about the two sources of fees that come out of tuition because typically when he sees a stadium expansion he usually sees athletic revenue bonds coming forth, not this type of bond.”

Temple did not respond to multiple messages left for him at his office last week.

While larger state institutions like South Carolina or Clemson are more capable of funding such projects through just athletics revenue, Coastal Carolina has other existing university funds derived from a portion of student fees that have been collected over past years that it would also apply to repaying the bonds. The school used a similar bonding structure for construction of The HTC Center several years ago, Bowie said in an email this week.

In an exchange of questions and answers between Glenn and Bowie prior to a specially-called Feb. 23 committee meeting, some of what Glenn asked the school to provide data on included football attendance figures for the last five years, revenue and expense summaries for the football program in that period and how the school would fund the required increase in scholarships and travel costs that go along with a move to the Sun Belt.

Coastal Carolina’s response included a “conservative” projection of an additional $300,000 in annual revenue from ticket sales along with revenue from playing guarantee games with programs from the power five conferences, naming rights money for stadium features, an increase in licensing royalties and concessions, increased donations to the Chanticleer Athletic Foundation, increased corporate sponsorships and the benefit of Sun Belt revenue distribution.

The Chants have already signed contracts to play at Arkansas during the 2017 season for a $1.5 million payout and at UCLA in 2023 for $1.1 million.

The school’s response also noted that Sun Belt schools received a $1.08 million revenue-sharing payout last year while Big South schools received approximately $90,000 in 2015.

Meanwhile, the full minutes from the meeting April 7 are not yet available, but some additional related documents have been posted online by the CHE and provide further details about the school’s plan to fund the project.

The university is asking for $36 million in revenue bonds to pair with a $2 million up-front cash contribution from the Chanticleer Athletic Foundation. The document also notes a promise from the CAF to contribute $12.5 million over the 25-year life of the revenue bond in annual installments of $500,000 to the university while reiterating “there will be no increase in any student fee or tuition” resulting from the project.

And again, the university’s proposal outlines that the debt will also be financed through “new ticket sales, athletic revenues and debt service funds already set aside for this purpose.”

As a contingency, the university had previously noted in documents connected to the Feb. 23 meeting that, “Should the net revenues prove insufficient to provide for debt service on the bonds, the university [on] June 30, 2015, had on deposit $29.6 million dollars of fund balance that could be applied to pay debt service at the discretion of the university.”

In an email response seeking clarification on the source of that money, Bowie said, “The number to which the statement is referring is unrestricted fund balance which is equivalent to net assets not legally restricted to other uses. It changes all the time and is not an amount sitting in an account with no purpose. … It’s made up of different types of funds and is meant to be a contingency statement as a point in time reference to the year-end financial statements.”

In its communications with the CHE, the university listed the projected date for execution of the construction contract as Oct. 2016 and the projected date for completion of construction as Aug. 2017.

“We’ve had a plan all along as to how this would be funded, and a primary source of that is institutional bonding, which is what is usually the source for just about anything we build on campus,” Hogue said. “That plan is in place, we have commitments from the Chanticleer Athletic Foundation for a portion of that and that’s where we are. That will be our plan. Other than obviously additional private support, which we’re out there seeking every day as aggressively as possible, our plan will still involve the same components.”

While the state doesn’t contribute the upfront money, it takes the risk of being on the hook for the balance if a school defaults on its payments, thus the thorough review process.

As per the minutes from the committee’s Jan. 7 meeting to review a request by South Carolina for a $50 million football operations facility, Hofferth commented generally on the role of the CHE in these processes and his own thoughts on the system.

He stated, quoting the minutes, that “this body is at a crossroad of determining how we best serve the citizens and the tax payers of our state.”

That passage – not pertaining to Coastal Carolina’s situation but interesting perspective on the process in general – continued, “Chairman Hofferth stated that the members around the table have a passion for trying to make a difference and we are challenging that because they have inherited a situation that is broken. Chairman Hofferth stated that he wants to go [on] record that the current process is broken in every respect and wanted it to be reflected in the minutes. He acknowledged that at the end of the day, our job is to protect the tax payers and families, knowing that costs are sky rocketing, and that there is a lot of work to do, but the vision is getting clearer. …

“[He] hopes that the institutions can understand how difficult it is to approve projects with limited information and that what the outlook looks like matters, how it fits overall in the university budget, how athletics fits in the overall big scheme, what the master plan looks like and how it’s going to be infused based on different revenue models.”

Along with receiving phase two approval from the CHE, Coastal Carolina must receive approvals from the state’s Joint Bond Review Committee and the State Fiscal Accountability Authority, which are independent processes.

The Coastal Carolina football team will be playing as an FCS independent this fall and will debut as a Sun Belt member in 2017 while not receiving full FBS postseason eligibility until 2018. The NCAA requires FBS schools to maintain an average attendance (actual or paid) of 15,000, which is the primary impetus for the stadium expansion.

Coastal Carolina has committed to the Sun Belt that the stadium would have at least 20,000 seats by the beginning of the 2017 season, according to the documents.

The sooner the construction can begin the more likely it will be completed in that desired timeline, but for now the university must continue waiting for approval to move forward.

“The next step is to answer the questions that we’ve been given and go from there,” Hogue said.

 

Source : myrtlebeachonline.com

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