UCA construction of athletic facility jumped gun on gift

Correction: The University of Central Arkansas Foundation was authorized to borrow up to $4 million for a weight-training facility, but it borrowed only about $2.7 million, UCA spokesman Fredricka Sharkey said. This article incorrectly reported the amount of a loan obtained by the UCA Foundation.

The University of Central Arkansas began building a weight-training facility during Allen Meadors’ presidency before it had a signed agreement for a donor to finance $1 million of the cost as promised.

Ultimately the would-be donor, who has not been publicly identified, did not come through with the money, and UCA is having to pick up the tab.

Construction on the 8,000-square-foot weight-training building began in June 2011, said UCA President Tom Courtway, who took over the chief executive’s office when Meadors resigned under pressure Sept. 2, 2011.

Talking with reporters after a tense faculty-senate meeting Tuesday, Courtway was asked what was in place now to prevent a similar problem in the future.

“Me,” he replied.

“I’m not going to do it,” he said, referring to spending such money without a donor’s signature in the future.

As for the weight-training facility, it’s already built and in use.

UCA Foundation President Shelley Mehl said she thought it was “absolutely” wise to await a formal agreement with donors before moving ahead with such projects.

Meadors did not respond to an e-mail seeking comment. No one answered his North Carolina home phone late Tuesday.

Courtway addressed the issue at the start of the faculty-senate meeting.

“Should it have been built as soon as it was?” he said of the weight-training facility. “Maybe, maybe not.”

“I’m now dealing with something that happened almost to the day two years ago,” he added. “I want to move on.

“Why it [the donation] didn’t happen to me is irrelevant to me today. The building is built, and we’re using it,” he said.

At one point, faculty senator Lynn Burley said, “I honestly don’t mean this to be a sarcastic question.” She then asked if it was “common” to move forward with a project solely on the hope or expectation of funding.

Courtway replied that he didn’t know how to answer that. “But there are risks,” he said.

Faculty senator Brian Bolter later asked, “It would be wrong to begin building a building based only on a promise without a signature?”

“Yes,” Courtway replied.

Bolter asked Courtway if it was reasonable to say there had been “a screw-up at some level.”

“I don’t want to characterize it that way,” Courtway said. “There was a risk moving ahead.”

That, he said, is the reason an agreement between UCA and the foundation was prepared as it was - to provide for reimbursement to the foundation with NCAA revenue and other funding if needed.

According to a proposal that had been drawn up for the prospective donor to sign, that person was to have made his first payment of $100,000 on or before June 30, 2011, and to have made additional $100,000 payments on or before June 30 of each year through 2020.

Mehl said not even the first payment was made.

The proposed agreement said the prospective donor had asked to remain anonymous.

UCA released the document along with other written materials under the Arkansas Freedom of Information Act.

By Oct. 1, the outstanding balance on the weight facility and skyboxes that UCA is renting to sports fans will be a total of about $2.9 million, Courtway said. Skybox prepayments totaling $1 million have made the outstanding sum less than it otherwise would have been, he said.

The UCA Foundation took out a $4 million loan to pay for the skyboxes and the weighttraining facility - something it had planned to do anyway, according to UCA records and Mehl.

“If we’d gotten the donation,” we’d have paid it back sooner,” Mehl said.

On Feb. 25, 2011, UCA’s board of trustees approved the project along with a memorandum of understanding in which the school specified that it would pay the foundation back the $4 million it had borrowed.

Courtway said in the interview that he did not know exactly when the university learned it wasn’t getting the donation. But he thought it was late summer or early fall, shortly before or after he became president.

Mehl said she did not know the exact time the deal fell through either but said Courtway’s estimate “sounds reasonable.”

Asked when UCA officials realized that the expected donation was unraveling, Courtway said, “Somebody else has got to answer to that.”

“All along the foundation was going to borrow the money,” Courtway said. “The university was going to pay it back. The only question ... was the source of the repayment.”

One faculty senator wanted to know why Athletic Director Brad Teague wasn’t at the meeting.

“I don’t think it was necessary for him to be here,” said Courtway, who praised Teague. “These decisions, whether you like them or not, rest in one seat.”

But Courtway quickly added, “I’m not blaming Dr. Meadors.” For that matter, Courtway said he was not blaming anyone.

“For whatever reason,” the construction began without the prospective donor’s signature, he said. “When you proceed ahead ... we learn sometimes in life maybe you shouldn’t have,” he said. “You have to live with it.”

According to a capital-and-construction form signed by Teague on Feb. 7, 2011, the $1.5 million cost estimate for the weight-training complex included equipment, utilities and other needs.

Under the category “Source of Project Funds,” the form says “Private and athletics budget.”

Yet a March 2, 2011, e-mail exchange between Teague and Cassandra McCuien-Smith, purchasing director, asks if the project is “100 percent” privately funded. “Yes,” the e-mail says.

Minutes from the February 2011 board meeting reflect that trustees approved a resolution authorizing the administration “to proceed with development of plans for” specified capital projects “at the estimated costs indicated, to solicit bids for construction and to make contract awards.”

Among the projects listed were the weight-training facility and bathroom facilities. The minutes said they would “be funded through the UCA Foundation with private gifts and Foundation borrowing.”

The minutes also include a summary of the university’s lease agreement with the foundation which says in part, “Solely for purposes of illustration, if no skyboxes are pre-paid, the payment to the Foundation as rent would be approximately $375,000. This amount would be paid by the University to the Foundationfrom skybox rentals plus revenue” the Athletic Department gets from the NCAA.

Some faculty senators were frustrated that revenue from a proposed vendor contract with Coca-Cola might go to help pay for the weight-training facility rather than academics.

Courtway stressed, however, that nothing has been decided about how any of UCA’s revenue from the next soft-drink contract will be used, though one possibility is that some of it could go to athletics as it has in the past with the present vendor, Pepsi.

Front Section, Pages 1 on 02/13/2013

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