CSU earns $3.2M more than projected from stadium

PUEBLO – Net revenue from CSU’s on-campus stadium in its first year of operation is expected to be about $3.2 million more than projected, President and Chancellor Tony Frank told the school’s governing board Friday.

The new stadium was projected to generate about $10 million in new revenue, above and beyond what the university earned each year the football team played its games at Hughes Stadium. Actual net revenue was $13.2 million, Frank told the Colorado State University System Board of Governors during meetings Friday at CSU-Pueblo’s student center.

“The university committed from the very start that the stadium would not rely on any tuition or state funding, and this report shows that our model performed better than we even expected,” said Lynn Johnson, the chief financial officer for the CSU system.

Total revenue from the new stadium is expected to be $15.54 million, which is $4.14 million more than projected in the original forecast. Expenses were $2.38 million, about $973,000 higher than projected.

Frank said the additional expenses were the result of “over-engineering” of the project designed to minimize potential negative impacts on the university, surrounding neighborhoods and city of Fort Collins. There was significant opposition in the community when CSU first started looking into the construction of a new stadium on campus.

“When we went into this year, we made a conscious decision to over-engineer this first year, first season’s experience,” Frank told the board. “There were a lot of projections that western civilization was going to come to an end with the opening of the new stadium. And, to the extent we could ensure that western civilization didn’t end, we wanted to do that.”

Local: CSU seeks to annex Hughes Stadium site into city

CSU financed the stadium’s $220 million construction costs and the first two years of interest payments on the debt incurred to build it through the sale of $239 million in revenue bonds. The school’s annual payments on those bonds, issued with an aggregate interest rate of about 3.57 percent, are about $7.9 million for the 2018 fiscal year and increase to about $12.18 million annually from 2020 to 2055.

“We base our bonding and our projections on the full 40-year scope, and I remain highly confident that over the 40 years, the model will perform well,” Frank said, noting that the university has donations and pledges of more than $60 million available to cover any shortfalls that might occur in a given year between net revenue and the debt-service payments.

The projections used for comparison were from the low-case scenario presented in a 2012 feasibility report that convinced the Board of Governors to build the stadium and finance its construction through the sale of revenue bonds.

Final figures won’t be available until June 30, when the current fiscal year ends. Deputy athletic director Steve Cottingham, who prepared the report, told the Coloradoan he’s confident the numbers presented to the board in his forecast won’t change significantly when final figures are available for offseason use of the facility, including events that will bring in additional revenue, through the end of the fiscal year.

Related: New CSU stadium financials perform beyond expectations in Year 1

The figures were presented to the board in a new stadium accountability report. The annual report is basically a balance sheet, showing the stadium’s revenue and expenses. It is intended to provide “an open, transparent, longitudinal tracking system” on the stadium’s financial performance, Frank told the board.

Frank said he’ll have a final accountability report for the stadium’s first year, with actual numbers instead of forecasts in each column, available for the board to review in August, if it chooses to do so, but he does not anticipate any “substantive or material changes.”

The additional revenue leaves CSU with a surplus of $5.3 million that will go into a reserve fund to help cover any shortfalls in future years, unless the Board of Governors chooses otherwise, Frank said.

The report shows that $9.3 million in funds donated for the stadium are currently in that account, and Frank has previously said the university has received more than $60 million in pledges, including future-year payments and estates, toward the project.

“The stadium did everything we hoped it would and more during this first seasons, including financial results that show the power of our investment,” said Rico Munn, chairman of the Board of Governors. “We’ll continue to manage this important asset carefully to ensure continued success moving forward.”

Opinion: Broncos, CSU fans OK with Mile High Stadium and Sonny Lubick Field?