Univ. Of Oregon Will Use State Bonds To Finance New Arena

Oregon To Use Public Funds For New $200M Basketball Arena

Univ. of Oregon (UO) officials indicated that the school will borrow the $200M cost of their new basketball arena "using state bonds and pay back the money with arena revenues and annual donations from fans," according to Rachel Bachman of the Portland OREGONIAN. Taxpayers will now "bear the arena project's financial risk" instead of a previous plan calling for private donors to finance construction costs. UO's plan still needs approval from the State Board of Higher Education and the Oregon Legislature. UO Senate President Gordon Sayre said, "We're concerned. And we're trying to get all the information in its latest form from the athletic department so that we can look at it with a critical eye." Bachman noted Nike Chair and UO alum Phil Knight in August donated $100M to the school, the largest single gift to an Oregon public university, and UO President Dave Frohnmayer indicated that the gift "positioned the university to move 'full speed ahead' to build the arena." However, the money "will stay in an endowment-like 'legacy-fund' designed to give the athletic department long-term financial stability." UO AD Pat Kilkenny said, "That was the wishes of the donor. To me, they're two separate, distinct issues." Kilkenny said that he was "comfortable in saying a new arena could generate $16[M] annually," which would exceed the $11.2M Kilkenny estimated the school would pay annually on 40-year bonds. CSL Int'l in '03  projected a 13,000-15,000-seat UO arena "would generate $6[M] per year in a 'moderate' scenario and $8.6[M] in an 'aggressive' scenario" before any bond payments (Portland OREGONIAN, 10/9).