Legislators help CCU bypass state committee to move stadium expansion forward

In the wake of rejections from the South Carolina Commission on Higher Education in recent months, Coastal Carolina University leaders had pledged that they would find a way to get the school’s football stadium expansion project to the next step in the process – one way or another.

And they got that breakthrough Wednesday night with supportive votes from the South Carolina House of Representatives and Senate to override Gov. Nikki Haley’s vetoes of two provisos pertaining to the Brooks Stadium expansion project. Haley, however, said the public school’s actions to bypass CHE approval are “disappointing.”

The project, after the university reduced its proposed budget from $38 million to $29.9 million, was previously denied necessary phase two state approval by the CHE in its May meeting while being heard by the group for the fourth time since February.

The commission, which was taking a more exhaustive vetting approach than ever before in its history, conveyed that it needed to see more private money in the school’s plan to repay the state-backed bonds that would provide the upfront funding for 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.

Instead, Coastal Carolina ultimately found a way around the CHE, with the provisos – and the votes to override Haley’s vetoes of them – allowing the school to move straight ahead to the next step in the process, which is to seek approval from the state’s Joint Bond Review Committee.

While nothing is guaranteed, university leaders are confident they will receive approval from the JBRC and then the State Fiscal Accountability Authority to advance the project to the stage of bidding out a contractor by the end of the summer.

“This is something that we had been looking at,” university president David DeCenzo said Thursday morning. “I know we said multiple times that we were looking at all available options, and this was one of the options that we were exploring.”

DeCenzo, chairman of the board of trustees Wyatt Henderson and the board’s athletic committee chairman Gene Spivey put together the plan to work around the CHE shortly after that unsuccessful May meeting, Henderson said.

“The law does not allow for an appeals process from CHE – they either approve it or they do not approve it,” Henderson said. “... What we thought was if we could simultaneously try to raise funds for the eventual return to the CHE, maybe we could give them what they wanted, but at the same time we had to figure out, is there maybe a possible work-around here?”

That involved reaching out to members of the South Carolina General Assembly to get those provisos in place, with the expectation that Haley would veto them, setting up the votes by the state House and Senate on Wednesday.

“We know a lot of people there and through our history they trust the board of trustees and our judgment and they understand what we’ve been able to accomplish in the past, so they can kind of read between the lines that CHE was maybe overstepping their powers or maybe even trying to expand their powers in using Coastal Carolina as an example,” Henderson said.

Tim Hofferth, chairman of the CHE, said he was disappointed by CCU’s roundabout tactics, but he was even more disappointed that the legislature approved the measure. The CHE was commissioned by the state legislature last year to improve accountability in higher education, so the state’s willingness to approve a nearly $30 million request – without prior approval from the CHE – is disheartening, Hofferth said.

Hofferth added that the commission put in over 100 hours looking into the stadium expansion, and just wanted more private money involved so the debt wasn’t placed on the backs of students.

“We're trying to deliver what the legislature wanted: more accountability,” he said. “This wasn’t a fly-by-night deal.”

Haley vetoed both provisos because of their lack of fiscal accountability and “aggressive lobbying efforts” to bypass CHE’s review process, she said in this year’s General Appropriations Act. She said Hofferth, the new commission chairman, was appointed to vet capital projects and budgets and provide oversight into higher education spending.

Even with that reduced stadium price tag that was brought back before the renewed commission, the numbers “simply do not work,” Haley said.

“The project, primarily funded by tuition-backed debt, nearly doubled in cost since its original proposal just last fall,” she said.

Said DeCenzo: “Our local delegation both on the House and Senate side were very helpful to this university knowing the importance the stadium expansion has not only to the university but for economic impact in our area. They rose to the occasion and worked diligently to help us get this into the budget.”

The first proviso was to allow Coastal Carolina to bypass the CHE and take its engineering study along with the total cost of the project straight to the JBRC for approval. And because it was attached to an appropriations bill, it had to include some nominal level of funding to withstand a possible state Supreme Court challenge by the CHE, thus the second proviso involved $100,000 the school would repay, Henderson said.

The override of Haley’s veto 26 and veto 27, as they were identified, passed 96-12 and 77-16 in the House, respectively, and more narrowly in the senate, where 27 voted for it, 13 voted against it and six were absent or did not vote.

“It was a good day for Coastal, but what it allowed us to do was to set up that appeals process,” Henderson said. “Now this will not be an ongoing appeal process. The provisos clearly state this is for a one-year term and [specifically] for the Brooks Stadium expansion. This allows us to take this to a body or committee that actually has the tools to evaluate a capital project. The CHE’s own admissions on the record have said, ‘We don’t have the tools and resources to evaluate those projects.’ They requested those resources in the latest budget, but they were denied.”

Haley said CCU’s backdoor approach to stadium approval shows the impact of “runaway” higher education spending that isn’t in the best interest of South Carolina students.

“Such actions by a public institution are disappointing, and the fact that legislators have chosen to go along is even more so,” Haley said.

Hofferth agreed.

“I know how important this project is to Conway, but this is one spoke in a little wheel,” he said.

Brad Dean, president of the Myrtle Beach Area Chamber of Commerce, supported the move, saying the expansion would help the local economy by bringing more visitors here.

“The stadium is part of a much larger expansion plan in the Sun Belt Athletic Conference, which will bring us additional visitors as well as more national publicity, all of which favorably positions our Grand Strand community for job growth,” he said. “As Coastal Carolina University grows, so grows our local presence as well as our ever-important tourism industry, which provides the economic engine for our local economy.”

Coastal Carolina’s latest plans call for an expansion of Brooks Stadium from 9,214 seats to around 19,000, as part of the Chanticleers’ move to the Sun Belt Conference and move up to the Football Bowl Subdivision level.

That is smaller than the initial expansion plans before the last reduction to the proposed budget, and that is where the plan remains at this point, DeCenzo said.

University leaders have continually stated that there will be no increase in tuition or student fees related to the stadium project. The plans they pitched to the CHE involved a $2 million contribution from the Chanticleer Athletic Foundation upon completion of construction, $500,000 annually from the CAF over the life of the bonds and $200,000 per year from athletic department revenue. In addition, in their last proposal in May they included the use of renovation reserve funds approved by the board of trustees that could reduce the total amount coming from bonding down to $22.9 million.

They still need those approvals from the JBRC and SFAA, but after months of frustration there is now optimism among university leaders that this process will soon start moving forward.

“You’re always hopeful,” DeCenzo said. “They say it’s not over until it’s over, [but] through the years we have taken numerous projects to Joint Bond. We go there well prepared and I’m certain that members of the Joint Bond that have the expertise to evaluate capital projects will look [favorably] at the data we present.”

Henderson reiterated that confidence.

“Nothing’s guaranteed, but one thing about it, the group at JBRC, they know Coastal’s history, they know our fiscal responsibility. They probably know the numbers as well as we do,” he said. “... So I’m confident we’ll be successful at JBRC, but with South Carolina politics, nothing is guaranteed.”

This story was originally published June 16, 2016 at 10:47 AM with the headline "Legislators help CCU bypass state committee to move stadium expansion forward."