Coastal Carolina

CCU stadium expansion request again denied by state

Coastal Carolina University made its latest attempt at securing phase two state approval for its football stadium expansion project Thursday, returning before the South Carolina Commission on Higher Education with a 21-percent reduction to its budget and a lesser request for bonding.
Coastal Carolina University made its latest attempt at securing phase two state approval for its football stadium expansion project Thursday, returning before the South Carolina Commission on Higher Education with a 21-percent reduction to its budget and a lesser request for bonding. Submitted rendering

Coastal Carolina University made its latest attempt at securing phase two state approval for its football stadium expansion project Thursday, returning before the South Carolina Commission on Higher Education with a 21-percent reduction to its budget and a lesser request for bonding.

It still wasn’t enough.

CHE commissioners voted 9-4 against Coastal Carolina’s project, meaning the school will have to try again – perhaps as soon as next month – and further stall the expansion of Brooks Stadium that is essential for the Chanticleers’ announced move to the Sun Belt Conference and NCAA’s Football Bowl Subdivision.

$29.9 millionNew estimated cost of stadium expansion, down from $38 million

The university had lowered its budget for the project from $38 million to $29.9 million and had earlier in the day secured approval from its board of trustees to use renovation reserve funds to help further lessen the amount of money that would need to be acquired through bonds by up to $5 million.

The CHE, in turn, continued to express concerns over the lack of upfront private contributions toward the project, and CHE chairman Tim Hofferth continued to express his opinion that Coastal Carolina’s financial projections do not thoroughly anticipate the cost of making this move to the FBS and Sun Belt.

This was the fourth time since February the university has brought the stadium proposal to the CHE for needed approval.

“We take the responsibility very seriously. This is not an easy decision. We champion everything that you’re about as an institution,” Hofferth said prior to the vote. “ ... At the end of the day, I’ve talked to a lot of athletic directors, a lot of presidents throughout the country, to bring it without significant private funding in today’s environment [is risky]. The question is what’s significant? I don’t know. There’s 13 [different] significant answers here. The fact of the matter is it’s very relevant and the thing that I’m afraid of, the costs on the operating side are nowhere near what you anticipate them to be. ...

“That’s my greatest concern in this environment. I want to get there. I’m just not there yet.”

Coastal Carolina received supportive votes from commissioners Louis Lynn of Columbia, Bettie Rose Horne of Greenwood, Charles Munns of Aiken and university alumnus Clark Parker of Myrtle Beach, with Munns and Parker in particular making strong comments on behalf of the project.

That wasn’t enough, though, leaving the Coastal Carolina contingent clearly exasperated while becoming something of an example for a recalibrated CHE.

Hofferth told The Sun News in a recent interview that before October, when he took over as chairman, the CHE had never turned down any capital project brought to it for approval and that the commission has changed its approach – as it is making very clear in this particular matter.

After Thursday’s vote, Coastal Carolina president David DeCenzo made a request to the commission.

I would ask if it’s within a point of order, can we get some very specific direction as to what is going to be a comfort level for those that are on the commission? You probably can’t do it right now, but I respectfully request that something be given to us because I know there have been some comments at times of ‘Well why is this new?’ We’ve been playing this ‘Guess what’s on our mind?’ as we get some feedback saying, ‘Well, you’re going to have to lower this, you’re going to have to do that.’ We need some very specific direction.

CCU President Dave DeCenzo

“I would ask if it’s within a point of order, can we get some very specific direction as to what is going to be a comfort level for those that are on the commission?” DeCenzo said. “You probably can’t do it right now, but I respectfully request that something be given to us because I know there have been some comments at times of ‘Well, why is this new?’ We’ve been playing this ‘Guess what’s on our mind?’ as we get some feedback saying, ‘Well, you’re going to have to lower this, you’re going to have to do that.’ We need some very specific direction.

“Our definition of private money, if that’s unacceptable to you, if your definition of private money is this is a donor writing a check, is it 20 percent, is it 25 percent? Give us some guideline.”

The revised proposal

DeCenzo had introduced Coastal Carolina’s revised budget plan while opening with a statement acknowledging the important role of the CHE and the university’s understanding it had to amend its initial $38 million budget.

In that previous model, $36 million would have come from bonds and $2 million would come from the Chanticleer Athletic Foundation after completion of the construction while the CAF would also commit $500,000 a year along with $200,000 annually in athletic department revenue toward paying off the bonds over 25 years.

On Thursday, Coastal Carolina pitched a revision for the budget not to exceed $29.9 million with an option for the bonding portion of the funding to be as low as $22.9 million after the $2 million contribution from the CAF and use of the renovation reserve funds approved by the board of trustees’ executive committee earlier in the day.

The committee met for about 20 minutes Thursday in the middle of the university’s board of trustees meeting.

Renovation reserve funds are used for some larger maintenance and campus repair projects and new construction or renovation projects, according to university staff.

Officials use $150 of student tuition per semester for those reserve funds, which is 2.8 percent of in-state tuition per semester, according to information from the finance office.

The university’s revised proposal also included a signed letter from the Coastal Educational Foundation pledging to cover any shortcomings in the CAF’s annual $500,000 contributions if needed, as an extra layer of security the school hoped would ease doubts or concerns about the funding streams.

As a lay person, as I look at the finances, it seems reasonable to me and I think that ought to be our standard of measuring unless we’re all supposed to be CPAs, in which case they’ve got the wrong people around the table.

CHE commissioner Charles Munns

In his opening address to the CHE later in the day, DeCenzo outlined the university’s new budget proposal.

“Yes, our world is changing. The old models of surviving no longer exist. We adapt or we cease to exist. I know that means your jobs as commissioners have changed too. What was once a rubber stamp can no longer be the way business is done, and while Coastal has taken the lead on many things I sure wish we weren’t the first ones to go through this necessary level of project scrutiny,” DeCenzo said. “While I applaud your efforts, please know that this is new for us too, and yes, it has taught us some lessons. So the question I have is how do we move this forward?

“We have heard from you loud and clear that $38 million is not going to fly, period. So here’s what I challenged my staff to do, eliminate all parts of the stadium expansion that are not absolutely critical to meeting our obligations to state building codes, the NCAA or the Sun Belt Conference.”

Revisions to the stadium expansion project include reducing the projected total number of seats from around 22,000 to 19,000, removing planned facades and plazas, removing the boardwalk that would have connected the open end of the stadium and also removing the enhanced sound system, the deck slab at the club level and all kitchen equipment.

Those revisions included reducing the projected total number of seats from around 22,000 to 19,000, removing planned facades and plazas, removing the boardwalk that would have connected the open end of the stadium and also removing the enhanced sound system, the deck slab at the club level and all kitchen equipment.

The Chants’ football program is set to debut in the Sun Belt in 2017 and the NCAA requires FBS schools to maintain an average attendance of 15,000, which is not possible within the current 9,214-seat Brooks Stadium.

“We did make the commitment to the Sun Belt Conference, which requires the stadium expansion. Our failure to meet that commitment could result in a number of things, the first being the negative media coverage that will hurt Coastal Carolina University for years,” DeCenzo continued in his opening address. “We have contracts with power-five schools which will pay us over $1 million per game; without being FBS we will never see that money, and worse yet we may have to break those contracts, which would result in a financial liability to us.

“But most importantly are the 25 recruits that we signed this year, eight of whom are from South Carolina. They start Coastal in the fall. Our failure to move this project along means our inability to meet NCAA requirements is in jeopardy, as would be our FBS standing. As a result we’d have to tell those 25 athletes that we cannot afford them the full scholarship they were promised when they signed with Coastal Carolina University. That to me would be the biggest tragedy of all.”

The Chants are not quite to that point yet, but the longer this process drags on, the tougher it is going to be to stay on any sort of anticipated timeline and the more serious the questions become.

The dialogue

The discussion Thursday lasted around three hours with strong opinions levied by commission members on both sides of the matter.

Along with DeCenzo, Coastal Carolina was represented in Columbia by university provost and senior vice president J. Ralph Byington and vice president and chief financial officer Stacie Bowie, while athletic director Matt Hogue and Chants football coach Joe Moglia chimed in via phone.

If you had come in here and said, ‘We have significant private investment,’ or ‘We have commitment of private investment,’ I would have said, ‘Hallelujah, when’s the first game?’ I want to be able to support this stadium expansion. I told Ralph I’ll come to the first game and I will even wear teal and I will pay for my own seat. But at this point [while] I really desperately want to say yes to this, I am not there. I am not convinced that your numbers are realistic enough.

CHE commissioner Dianne Kuhl

“There is a new CHE that holds very dearly the accountability that comes with the role we play in the state,” Hofferth reiterated at the onset of the presentation.

And so once again the commission had plenty of questions and concerns – above all else, the lack of committed private donations toward the project.

While the state does not provide the money for such capital projects, it takes on the liability if a school can’t pay off its debts from the bonds that do fund the operation.

“I want to figure out a way to support it. I know this, for me the most important part is the private source of funding,” Hofferth said. “That’s a hard number. That number when it comes in, if it’s $10 million, $15 [million], $20 million, that’s a hard number that regardless of economic conditions or the trends in higher education it [can be counted on].”

Said Terrye Seckinger, a CHE commissioner from Mount Pleasant: “I don’t want you to make a mistake that’s going to bankrupt your institution in a brief moment of excitement about football. I get it. We’ve got to calm down and look at the downside. We want to see, what are the downsides of this and why was there not a lot of money immediately when the Sun Belt came? ... I have to understand that I’m making a prudent financial decision, and I’m not convinced of that because of lack of private funding [and] lack of initiative [when thoughts of changing conferences] started.”

Coastal Carolina’s response has been that the university won’t be able to secure significant donations until the process starts moving forward.

“I wish we could sit here and say that we were 40 or 50 years older because we’d have a foundation that could stroke a check,” DeCenzo said. “... For a lot of different reasons that go really beyond the scope of this, because of the length of time it takes a lot of times to get approval for a project we have donors now who say, ‘I will commit, but I’m not going to write you a check until I see dirt moving. ...

“I’ll use a comment, I won’t attribute it to anybody, but we had a board member say today, ‘I have committed to the other projects whether it’s an academic or an athletic project. I am willing to commit $50,000 to football, but I will not commit it until I see something happening.’ Unfortunately that’s what we’re facing in the university. We have to have the projects moving.”

Byington added that Chris Johnson, the executive director of the CAF, has told him the delays in this process have negatively impacted fundraising efforts.

“Chris said that this process is actually hurting their ability to raise more funds because this is in the community. ... This is hurting our fundraising,” he said.

That argument didn’t register with some in the room, though.

In his only comments of the day, commissioner Kim Phillips of Gaffney challenged those notions.

“I don’t get it. You’re going into a new conference, I don’t get that the dirt has to be moved before I give,” he said. “I don’t see how that works. If somebody knows you’re doing this and the excitement is there that you talk about, they can’t say, ‘I’ll do it if it’s approved, when it’s approved’? That confuses me. I don’t get that.”

It’s now abundantly clear that Coastal Carolina is going to have to come up with some significant private donations to change the mind of the CHE.

Several commissioners reiterated that they want to get on board, but until that happens, they won’t throw their support behind the project.

“I have been asking the same questions since February and some of those questions I still don’t have answered in the detail that I need them to be answered,” said Dianne Kuhl of Greer. “... It just bugs the heck out of me when [people] say, ‘Why is the commission being so difficult and holding Coastal Carolina up?’ We’re not. We’ve done everything we can to try to get this to a yes, and I think maybe some of us are there.

“I think I am with commissioner [Hood] Temple. If you had come in here and said, ‘We have significant private investment,’ or ‘We have commitment of private investment,’ I would have said, ‘Hallelujah, when’s the first game?’ I want to be able to support this stadium expansion. I told Ralph I’ll come to the first game and I will even wear teal and I will pay for my own seat. But at this point [while] I really desperately want to say yes to this, I am not there. I am not convinced that your numbers are realistic enough.”

There were alternative perspectives and opinions offered as well.

Munns, in particular, tried to encourage the group that whatever risk is involved in approving the stadium expansion was worthwhile.

“We have to look at who are making these judgments and judge in our own heart and mind if they’re solid judgments, and I think they are,” he said. “... As I look at Coastal, their record is one of growth, their forecast using not their numbers but state numbers is one of growth. The status quo of where they are, I think, would harm that growth because students would make choices other places. So the status quo if we say no now is harmful. That’s the point I’m trying to make. We need to take a little bit of risk in this as well. ...

“As a lay person, as I look at the finances, it seems reasonable to me and I think that ought to be our standard of measuring unless we’re all supposed to be CPAs, in which case they’ve got the wrong people around the table.”

Meanwhile, Horne acknowledged that Coastal Carolina has been used as an example of the CHE’s new approach to considering such capital projects and the tougher vetting the group is committed to going forward.

That point has been made, she said.

“I don’t think we’d be sitting here if somebody had come forward and said, ‘We want to increase the size of Death Valley’ [at Clemson] or ‘We’re going to double the capacity of Williams-Brice Stadium’ [at South Carolina]. I don’t think we’d be here, or it wouldn’t be as long a meeting, I can tell you that,” she said. “... So I’m going to say the rules have changed, this has sent a clear signal to every institution that deals with [this process] – the people are different, the philosophy has changed and the procedure is going to be different.”

In the end, though, the outcome wasn’t any different for Coastal Carolina this time, and so university officials must go back to the drawing board yet again.

Or very soon come up with a significant influx of private money.

DeCenzo was not available for an interview after the vote went against Coastal Carolina as he and the other university officials were past their expected departure time to make it back to campus for commitments related to the school’s commencement ceremonies this week.

“We’re disappointed, obviously,” he expressed on his way out.

Izabel Dorst, sophomore theater major at CCU, said the college needs to grow their endowment funds so students have more opportunities to succeed and Coastal can be recognized nationally.

Claire Byun: 843-626-0381, @Claire_TSN

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