ASU Trustees OK Lease with Red Wolves Foundation for Athletics Facilities, Refinancing of Housing Bonds
LITTLE ROCK — The Arkansas State University Board of Trustees today in a special meeting approved a lease that will facilitate construction of $29 million in new athletics facilities at Centennial Bank Stadium and the refinancing of $12.28 million in housing bonds.
ASU System President Chuck Welch said the unrelated actions warranted a special meeting for timing reasons.
The board approved A-State and the Red Wolves Foundation entering into a 20-year ground lease and space lease agreement. It will allow the RWF to facilitate and pay for the construction of a 66,533-square-foot athletics operations facility, premium seating and other enhancements in the north end zone of the stadium. No public funds will be used to finance construction.
“This is going to be a great addition to our athletics facilities and fulfill a lot of needs,” said Welch, noting that it will also help the university address potential Title IX issues. “I want to commend Athletics Director Terry Mohajir and his team for raising the private funds to accomplish this. We appreciate the Red Wolves Foundation donors for their significant support of our program. The Athletics Department and foundation want to begin construction as soon as possible so the revenue-generating seating is ready for the 2018 fall season.”
The athletics facility will include a weight room and training/rehabilitation area, new locker room areas, meeting rooms, players’ lounge, coaches’ offices, academic rooms and a theater-style meeting area for teams. Revenue-producing additions will include 150 loge boxes and 68 premium seats that replace the current bleacher seats.
Trustee Price Gardner of Little Rock said he had many questions about the costs, fund-raising and financing for the project and is impressed with the final plan with realistic and conservative estimates.
“As a former player, I recognize the need for the facility,” Trustee Price Gardner of Little Rock said. “But it’s not a decision that is taken lightly or without a lot of additional diligence. All the boxes have been checked when questions have been asked. Like it or not, the realities of having a program that competes at the level that ours does make this a need in my opinion.”
Trustee Niel Crowson of Jonesboro said, “When I first saw the project a number of months ago, I was concerned about the cost. But Terry and his team acted in a very responsible matter to value engineer this project and get the cost down.”
Welch said the system requested the refinancing of Series 2009 and Series 2010 housing bonds in anticipation of pending federal tax legislation that would discontinue the practice of refunding tax-exempt bonds. The resolution requires that the refinancing produce a net present value savings of at least 4 percent of the refunded balance, which is $491,200. However, the long-term savings are expected to be $2.6 million or 11 percent.
“Interest rates remain favorable to refinancing,” Welch said. “This is an aggressive plan to close the refinancing by the end of year, but our underwriters and bond counsel are confident we can do it. It’s worth the effort for the long-term savings in financing costs, and the option may not be available to us after Jan. 1.”
Stephens Inc. of Little Rock and Crews & Associates Inc. of Little Rock will be the bond underwriters. Friday Eldredge & Clark LLP of Little Rock is the bond counsel. Trustee Price Gardner of Little Rock, an attorney for the Friday firm, abstained from the vote.
The ASU Board will hold its next regular meeting on Dec. 8 at 10 a.m. at the ASU System Office in Little Rock.