By Jodie Tillman, Times/Herald Tallahassee Bureau
Thursday, March 24, 2011
TALLAHASSEE — A $35 million makeover of USF's Sun Dome got the go-ahead Thursday from the Board of Governors.
The approval, however, comes with strings: The university's foundation must set aside $20 million — a quarter of its investment pool — as a backup guarantee for the $26 million loan that is financing most of the project.
If USF comes up with a report showing it doesn't need to set aside that much money for the loan, the board can opt to reduce the guarantee amount.
Board members came up with that proposal after expressing concerns that USF's proposal to use a combination of revenue streams — including concessions, ticket sales, parking and naming rights — would not be enough to cover the debt payments.
In addition, though USF hired an outside firm to assist with revenue projections, it did not hire a third-party financial adviser to review the project, something the board's rules require.
"You have to understand, you're asking us to do something we've never done before," board member Charles Edwards told USF officials.
USF officials say the Sun Dome does not comply with the federal Americans with Disabilities Act and couldn't stay open and functioning in its current state.
"It is our largest venue," USF president Judy Genshaft said. "It is important we move on this. And we're ready to move very quickly on this."
The plan is to finish construction to be ready for the December graduation ceremony.
The Sun Dome has had net operating losses for the past three years, including $418,500 in 2008-09 and $91,500 last year.
USF had expected the foundation would need to step up for the first few years given the revenue projections. But officials had not anticipated setting aside $20 million.