DALLAS - Despite misgivings expressed in September, Colorado State University President Tony Frank has thrown his support behind construction of a $220 million bond-financed stadium on the Fort Collins campus.
CSU currently plays its football games at Hughes Stadium west of the campus.
Although the stadium's total cost is estimated at $220 million, Frank recommends that the CSU Board of Governors authorize $195 million of subordinated revenue bonds.
"I would recommend to you that these not be part of the State's Intercept Program," Frank wrote in a proposal to the board. "Although that program comes with a lower interest rate, I think it is a fair criticism that this is unlikely to have been what legislators envisioned when this program was established."
The State Intercept Program is Colorado's credit support program for higher education and public school bonds.
Frank said he believes the stadium can be financed at an interest rate of about 4%.
"The payments on such bonds are estimated at $12.1 million annually for 30 years," he wrote. "If we assume the low-case revenue scenario, apply philanthropy as the current gifts and pledge documents would indicate funds will be received, and apply an assumed 3% rate of inflation to both revenues and expenses of the new stadium, total resources available exceed bond payments by $76 million over the 30-year period."
If revenues fall short of expectations in the first 12 years, the project would face a cumulative deficit of $19.4 million, Frank said.
"I'd note that if we attain a level of revenue performance intermediate between the low and base case (the base case is the scenario at which the consulting firm had 90% confidence), the project never sees a deficit - hence never having any impact on the general fund," he said.
Building the stadium on campus using bonds was one of four scenarios Frank outlined in his proposal for the board's Dec. 5 meeting. Other included a $60 million refurbish of Hughes Stadium and a public-private development of a new stadium.
Separately, the city of Fort Collins said that a new on-campus stadium would require up to $24 million in infrastructure improvements.
City staff recommended a detailed agreement with Colorado State University to reduce the impact on infrastructure and municipal services.