ATHENS – At the west side of Sanford Stadium on Monday afternoon, students walked by in droves. They walked by two workers in hard hats who were looking down and adjusting a measuring instrument. Below them, work continued on the most expensive athletic facility project in years at UGA.
Finally, Georgia’s football teams will get new game-day locker rooms, after using the same ones for decades. Kirby Smart, who dressed in those locker rooms as a player in 1995, will be the first coach whose team benefits from new ones.
Smart also will gain a recruiting area next to those locker rooms, one that former coach Mark Richt had lobbied for privately. The west end of the stadium will gain updated restrooms and concessions stands. For all this, UGA has budgeted $63 million, more than twice what it cost to build the much-awaited indoor facility.
Georgia isn’t the only SEC East school undertaking a major facility project right now. Florida and South Carolina are too. And why shouldn’t the SEC schools? They’re still flush with cash, thanks to those annual conference payouts, which numbered around $40 million for each school this year. The third anniversary of the SEC Network was Monday.
But Georgia, Florida and South Carolina have chosen different ways to go about paying for those projects.
UGA announced that it would raise $53 million for the west end zone project, with the rest coming out of reserves. So in financial terms, Georgia is paying cash for the upgrades.
So far, UGA has raised $20 million toward the project, associate athletic director Matt Borman said Monday. And at least $6 million of that is an overrun from fundraising for the indoor facility.
When it set out to build the $30.2 million indoor facility, the stated goal was to fundraise for half of it. Well, the donors ended up paying for all of it, and then some.
When the $15.1 million fundraising goal was reached, UGA didn’t stop the fundraising. It had started the Magill Society, and the extra cash from the indoor project was allocated toward the west end zone renovation. That project was announced in February, the day the indoor facility was dedicated.
UGA is relying a lot on fundraising – perhaps for the simple reason that Georgia’s large and rabid fan base already has shown it will pony up the dough. But other schools are taking a different strategy.
Florida, which is building a $100 million football-use facility, is aiming to raise half the money for that project. It will take out a bond for the rest.
South Carolina, which is building a $50 million facility, was aiming to raise $20 million for that project. The rest would be paid for by bonds.
The current climate is very good for bonds, with low interest rates, and low fixed rates. Hence the Florida and South Carolina approaches.
But UGA is worried about adding to its debt. It has around $85 million in debt from leftover facility projects, and he covenants of those bonds require a certain amount of reserves to back them up. If the UGA athletic association took out more debt, or reached too far into the reserves, then its sterling credit rating would go down.
The total available reserve fund, as of early this summer, was around $81 million.
Why do they hold such seemingly stingy bond requirements? And why couldn’t UGA the school, a separate financial institution from the athletic association, help out with the debt? Why, with all that money sitting in reserve, doesn’t the school and athletic department come up with a creative solution to free up all that money? Well, that’s a whole other column, and we’re already bogged down enough here.
THE BOTTOM LINE
At the preseason scrimmage Saturday, which was closed to the media and the general public, seats were occupied by interested fans who had been let inas a result of their generous donations. Many of those donations had gone to the indoor facility, or the west end zone project underway in that same stadium.
Georgia, as is its wont, is asking donors to pay for these new facilities, rather than taking on debt (via low-interest bonds) or dipping into the reserve fund.
And a big reason for that is they can: Georgia fans are rabid and eager to help, and while they want their school to be financially sound, they ultimately care less about the financial ledger than the recruiting ledger. They may grumble, justifiably, about it taking too long for these projects to get underway, but they’re glad they are now.
They just want to win.
Have a question for the DawgNation Mailbag? You can submit it via e-mail at firstname.lastname@example.org. The mailbag runs every Thursday.