Cal Exploring Different Ways To Pay Off $445M Stemming From Recent Stadium Renovation
Endowment seat sales for the Univ. of California-Berkeley's Memorial Stadium have "stagnated at 1,857 seats," and school officials are "finding other ways they hope will pay the huge bill" for recent upgrades, according to Nanette Asimov of the S.F. CHRONICLE. The campus carries $445M in debt for the renovation of its "once-seismically unsound football stadium" -- which cost $321M and opened Sept. 1 -- and its new student athletic center, which cost $153M. Computer science professor Brian Barsky and "other skeptics call this debt burden a 'noose around the campus' neck' that could prevent Cal from pursuing other worthy projects requiring it to borrow money, like retrofitting buildings that don't meet seismic standards." Stadium debt "already absorbs" 20% of intercollegiate athletics' annual income, or roughly $18M of its $89M budget. And that "pays only the interest." Cal "won't start paying down the principal until 2032, when its yearly payments rise" to $26M, then $37M, before "tapering off" in 2051. After a "brief respite, Cal will owe a lump sum" of $82M in 2053 alone. Then it will have "six decades to pay off the final" 17% or $75M. Cal officials recently learned that even if "every endowment seat were sold," the school would still be short $134M, "nearly a third of its debt." The idea was to "find new ways to raise money -- and hire sales professionals to figure out how." Until last fall, seating and ticket sales had been "managed by Cal's development office." Cal Vice Chancellor/Administration & Finance John Wilton said that the school "agreed to pay about $300,000 a year to 'professionalize' the efforts, and it's been worth it." The professionals are "expanding the sales pitch for endowment seating beyond alumni, to corporations." Campus officials also "asked advice from their own Haas School of Business, and from the owners of endowment seats" (S.F. CHRONICLE, 6/17).