The University of Arkansas Board of Trustees,
meeting this morning in Little Rock, approved a $120 million bond issue for a Razorback Stadium expansion
that could cost $226 million or more counting interest.
Trustees David Pryor
and Cliff Gibson
again voted no, as they did when the Board approved the initial plans for the project. Pryor thanked the Board for allowing him to express his opposition to the project as an outsized commitment to athletics against the primary educational mission of the university.
The action today includes the hiring of the Mitchell Williams law firm of Little Rock as bond counsel and the hiring of a group of underwriters for the bonds.
was absent and Chair Reynie Rutledge
doesn't vote except to break ties. That left six votes in support of the expansion. That number includes Kelly Eichler,
whose husband works for one of the underwriting firms, Stephens Inc.,
and Morril Harriman
, who works for Mitchell Williams. Their associations were noted in a Democrat-Gazette article this morning that quoted them and others as saying they didn't have a direct financial conflict in the matter. Board chair Rutledge heads a bank that owns another of the underwriters, Crews and Associates
. He has followed a policy in the past of not participating in votes involving his banking interests. PS: Trustee Ben Hyneman's
, also is associated with the Mitchell Williams firm.
The Athletic Department has estimated the cost of the stadium project — with new high-dollar club seating and a variety of improvements to office and other facilities — at $160 million. Interest on the $120 million in bonds will require $186 million in revenue to repay them off, counting interest. The university hopes to raise $40 million for the project from sale of new "founders' suites" that cost $3 million and up and also from contributions from Athletic Department reserves and the Razorback Foundation. Ticket sales and student charges are pledged to the bonds, but officials had told me previously that the language about student charges was a standard feature of UA bonds and that no student charges were planned.
The final tab depends on the final bids for the work. Overruns are not unheard of. Also, private contributions could alter the size of the bond issue.
Pryor has raised questions about what happens should fan interest wane, either because of a preference for TV games or because of a losing team. Athletic Director Jeff Long
said he was confident in the continued passion of fans to to back a self-supporting roster of athletics. He also said the department had millions in TV contract revenue as a backstop.
PS: I wondered what Morril Harriman was up to at Mitchell Williams. Not practicing law, but lobbying. The clients of Gov. Beebe's former chief of staff:
American Council Of Life Insurers
American Fidelity Assurance Company
America's Health Insurance Plans
Arkansas Association of Insurance Companies
Arkansas Electric Cooperative Corporation
Arkansas Electric Cooperatives, Inc.
City of Springdale Water Utilities
CNO Financial, Inc.
EAN Holdings, LLC
Energy Security Partners
Insurance Services Office, Inc.
Magellan Health, Inc.
National Association of Subrogation Professionals (NASP)
Southern Arkansas University
State Farm Insurance Group
United Healthcare of Arkansas, Inc.
Walton Enterprises, Inc