The University Senate subcommittee that has scrutinized the proposed basketball arena’s funding model offered their full endorsement of the project to the Joint Ways and Means Committee of the Oregon Legislature on Thursday.
The faculty have been highly critical of the project, and when they released their first report on the arena in January they declined to endorse the arena proposal either way.
Nothing has fundamentally changed about the finance plan since the committee first released its report, except for the information that Phil Knight’s $100 million donation will expire if the University doesn’t secure $200 million in bonds from the legislature to pay for the project.
Knight’s gift will establish the Oregon Athletics Legacy Fund, which will pay operating expenses of the athletic department if arena revenues aren’t large enough to pay back the debt.
“Phil and Penny Knight’s gift is fundamental to the success of this project, and we are very grateful to them,” Gordon Sayre wrote in a letter presented to the Ways and Means Committee. “It is of the utmost importance to safeguard the Legacy Fund and preserve its principal with a conservative investment strategy.”
Sayre’s letter “urges” the committee to approve the bonding authority, but only if:
? The University is transparent about arena costs and revenues during the full 30-year term of the bond.
? There is a prudent investment strategy for the Legacy Fund that eliminates risk to the principal.
? The athletic department assumes all risks of the project and maintains self-sufficiency.
ASUO President Emily McLain also attended the Joint Ways and Means Committee’s public hearing and told committee members that there were still “concerns and unanswered questions” among students.
McLain questioned the University’s priorities in building the arena, but didn’t go as far as saying she or other students completely opposed the project.
“In a time when it is more important than ever to receive an education in the state of Oregon,” she said. “I just want to start looking at what are our priorities exactly, where are we putting our focus?”
Ways and Means Committee Co-Chair Rep. Mary Nolan, D-Portland, said University President Dave Frohnmayer’s diligence in answering questions and concerns has persuaded her to support the arena. She also decided to support it after the creation of a reserve fund that will additionally shield the academic budget from paying back the bonds.
“It’s an important piece for me and represents an admirable willingness to continue working on this effort and to address the concerns that have been raised here.”
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