BUSINESS MATTERS

Keep score on sports construction for UA

If you’re the sort of person who avoids the Sports section entirely or occasionally ventures over in search of a Wally Hall column your coworkers were arguing about over lunch, then you’re missing one of the larger ongoing economic development stories in Northwest Arkansas.

Roughly $75 million worth of University of Arkansas athletic department building projects have broken ground or been completed this year. A groundbreaking ceremony was held for a $25 million basketball practice facility the first weekend of December. A month earlier, the baseball program held a topping off ceremony for a $10 million indoor practice facility it will share with track and field. Football is getting settled into a $40 mil-lion home that opened in July.

We tend to forget about projects such as these because they are, generally speaking, of no use to the public. Unlike a new shopping center, industrial park or residential development, most of us will never set foot inside one of these facilities.

Basketball’s new 66,000-square-foot headquarters will sit across from Bud Walton Arena and, unlike that 19,200-seat venue built 20 years ago for $30 million, fans likely will not spend much time inside. Same goes for the 80, 000-square-foot football operations center that opened in August.

Still, we can’t ignore the money being spent here. This year’s UA athletic department construction commitments are part of a $300 million, 30-year athletic facilities master plan unveiled in 2011. Since introducing what Athletic Director Jeff Long labeled an “ambitious plan,” the UA has spent or committed to spend nearly $100 million.

We haven’t even gotten to the most ambitious part of the plan, a proposed $90 million face-lift for Reynolds Razorback Stadium’s north end zone. Arkansas wants to add an additional 5,000 seats, most of which will be premium accommodations that require a significant donation. There is currently a waiting list at the stadium for luxury boxes, so the UA feels there is a demand, even without a history of selling out the stadium.

This is the only proposed project that could generate money directly back into the athletic department coffers. Still, the finished, ongoing or planned construction in the UA athletic valley is considerable. It should be noted the cost isn’t supposed to be covered by funds generated from students or taxpayers. Donations, ticket money and bonds are supposed to cover it.

Is all this spending worth it?

Somebody else can outline the athletic benefits elsewhere. Here we’ll consider the financial ramifications.

An economic impact study issued earlier this year by UA estimated 2,016 jobs would be created by athletic facility construction between 2012-17. They’re saying the construction work during that five-year span will generate around $240 million for the state’s economy.

It’s unclear (to me, at least) if the study accounts for money that might leave Arkansas as a result of some architects and contractors being from out of state. Also, let’s forget for a second that the University of Arkansas was asked to conduct an economic impact study regarding the University of Arkansas.

Even without a perfect way to forecast how the economy will be affected and no real way to pin down an accurate assessment on what past construction has meant to the region and state, these are noteworthy projects. Whoever is using them, wherever the money winds up, we’re talking about hundreds of millions of dollars.

Many view the Razorbacks as a source of entertainment but fail to recognize what the UA athletic department and its $83 million in annual revenue mean to the local economy. Consider, for the sake of rough comparison, that South Coast Baking Co., which will employ 150 workers at its cookie-dough manufacturing plant in Springdale, is expecting $85 million in revenue for 2014.

South Coast’s arrival and its pledge to invest $8.7 million in retrofitting a warehouse space made front-page news and warranted mention in a follow-up column.

News regarding these completed or planned athletic facilities has been chronicled by the sports staff. Because of the scope of projects and the cost involved, however, it is fitting that from time to time we take note here in the Business/Farm section.

If you have a tip, call Chris Bahn at (479) 365-2972 or email him at [email protected]

Business, Pages 67 on 12/15/2013

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