UConn taps P3 to help finance on-campus hockey arena
The University of Connecticut, looking to expand its hockey presence at its flagship Storrs campus, intends to build a $45 million arena using a public-private development partnership.
UConn's board of trustees approved the measure for the rink, which the university hopes to open in fall 2021.
The new building, which could sit from 2,500 to 3,500 people depending upon design, will sit adjacent to the 2,000-seat Freitas Ice Forum. Its facilities and ice will meet National Collegiate Athletic Association Division I ice hockey requirements and Hockey East Association regulations, UConn said in a statement.
UConn still expects to play a majority of its home games at the XL Center in downtown Hartford. Freitas will still function for practices and other events.
XL Center, formerly the Hartford Civic Center, hosts many UConn men's and women's basketball games, concerts and the Hartford Wolf Pack, the American Hockey League affiliate of the New York Rangers. It was the home of the National Hockey League's Hartford Whalers before the franchise moved to North Carolina in 1997.
UConn also expects to realize "significant revenue" for the new building annually from ice time rentals to community groups, youth hockey leagues, and other organizations.
Its financing plan envisions the creation of a special-purpose entity as the legally binding vehicle for the development partnership. The developer will create the entity, and will be responsible for building the facility and staying on schedule. Once it’s open, UConn will operate it.
To pay for the new rink, said UConn, the entity will issue $22.5 million in tax-exempt bonds for the project. UConn will pay $1.6 million annually on the debt, though the $400,000-plus the university expects to receive as its share of gross revenue from rink rentals could help offset that.
UConn will use $12.5 million temporarily from its reserves as a cash advance, with the amount to be paid back through philanthropy and athletics revenue. Scott Jordan, executive vice president for administration and chief financial officer, said many colleges do likewise to fund capital projects.
The other $10 million will come from revenue UConn is receiving through the sale of the former West Hartford campus after it moved the campus to downtown Hartford, and the sale of the Nathan Hale Inn at its Storrs campus.
Bonding for the project will be outside the UConn2000 infrastructure improvement program, university officials said.
“We’re sending a message to the world that we’re serious about this,” Jordan told trustees.
Under state statutes, income the university receives from selling properties must go back into capital projects – which would include the ice rink – and cannot be used for operating expenses.
Athletic director David Benedict said one donor has already expressed interest in contributing $6 million for the project.
According to Benedict, having on-campus games could also help build the student fan base – which could translate to more students taking buses to Hartford games, as they do for some basketball games. In addition, better practice facilities could appeal to recruits.
"New England is a bit more into hockey, and everywhere universities are looking at sports as a way to attract students," said Randy Gerardes, a director at Wells Fargo Securities. "We've clearly seen that with big-time football at places like the University of Alabama, where enrollment has gone up.
"In this case, you're looking at a means to provide access to the student body," Gerardes said. "UConn has obviously had a lot of success with its athletic programs, led by its women's basketball team."
While basketball dominates UConn athletics — the women's team has won a record 11 NCAA championships, the men's team four — men's hockey has made inroads.
The Huskies, which entered top-tier Division I for the 1998-99 season, joined Hockey East in 2014. Hockey East is one of the nation's premier conferences. Member schools Boston College, Boston University, the University of Maine and Providence College have won a combined 13 national titles.
UConn last year finished fifth in the 11-member league, its best showing to date. It also placed fifth in home attendance, averaging 4,066 fans per game.
UConn's women's team has played in Hockey East since 2002-03, two seasons after joining Division I. Neither the men nor the women have made the sport's NCAA tournament.
School officials received from Hockey East a waiver to the league requirement for a minimum on-campus seating requirement of 4,000 seats.
"One of the challenges of stadium construction overall is right-sizing. You don't want to overbuild for something," Gerardes said. "It's a balancing act."
Nationally, college hockey attendance has dropped the past few years. Observers of the sport have referenced live steaming, high ticket prices in some markets, conference realignment and changing student-body demographics.
Jordan said the university is also committed to maintaining the parking capacity in the athletics district on campus, and will require that parking for about 750 vehicles must be available adjacent to the new arena.