Even if the Univ. of California-Berkeley “avoids the worst-case scenario” in financing renovations to Memorial Stadium, it will take a “significant improvement in fundraising for the university to avoid a massive shortfall," according to Jon Wilner of the SAN JOSE MERCURY NEWS. Cal Vice Chancellor for Administration & Finance John Wilton said that even in the worst-case scenario in which Cal “sells just 70 percent of the premium seats” before its June ’13 deadline, “the fund established to service the bonded debt would not run out of money until 2038.” Wilton said, “We have a long time to take action.” He added university officials “will do everything we can” to not use state money. Wilner reports it is “extremely difficult” to project the fundraising shortfall because of the “complicated nature” of the financing plan, which relies on numerous revenue streams. Those include “a facility fee, philanthropy and increased revenue” from Cal’s share of the Pac-12’s $3B TV deal with ESPN and Fox (SAN JOSE MERCURY NEWS, 4/20).
RESPONDING TO A REPORT: In response to Wednesday’s report in the Wall Street Journal, the university addressed concerns related to the financing of the stadium renovations. The school said it has always been its intention to use external financing for the renovation and seismic retrofit of the stadium, calling it a common practice in financing many types of capital projects. To date, the project has been financed using debt at lower interest rates and longer maturities than initially modeled. Cal has received $31M of its $270M goal from endowment seating program (ESP) sales. The university said about 85% of ESP participants have chosen to spread payments over time. The school said the $31M corresponds to a total projected value of over $144M to be paid by the end of the payment contracts. The goal of $270M remains, but the university wants to sell 90% of the available capacity in ESP sections with a target to do so by June ’13 (Cal).
