LINCOLN — The University of Nebraska at Omaha is projecting to generate nearly $5 million in additional athletic revenue annually by owning and operating a new $76 million on-campus arena.
Those new dollars should be more than enough to pay off the $35 million in bonds that the university now plans to issue for construction of the facility southwest of 64th and Center Streets, UNO officials said Friday.
Chancellor John Christensen and Athletic Director Trev Alberts were back before the Board of Regents on Friday with a revamped plan for a new home for UNO's signature hockey program — a project they say will help enhance and transform the university.
“Hockey is pretty significant to the athletic department as well as the university,” Alberts said. “It's almost impossible to have an athletic department at UNO if we don't have a strong hockey program generating revenue.”
In the end, the regents voted 7-0 to approve a program statement for the arena that included the $35 million in bond financing.
The original UNO arena plan, first approved by the regents in October, called for a private developer to own and operate the 7,500-seat facility, leasing it to the university as part of a lease-purchase agreement.
But as plans evolved, university officials said, it made more sense for the university to own the facility and finance it with public bonds.
With the lower interest rate available through tax-free public bonds, rather than bonds sold by the developer, university officials estimate they will save $250,000 a year in financing the arena. That's despite the fact that the university would lose millions in potential tax increment financing dollars by paying for it that way.
Under TIF, a portion of the property taxes generated by a new project can be directed to help pay for public improvements associated with it. But TIF would not be available on a university-owned arena, which would not be subject to property taxes.
The university's preliminary projections indicate the project will provide cash flow.
Annual payments to retire the bonds will come to $2.1 million, and arena operating costs are projected to be $2.3 million a year. Those two expenses should be covered by new operating revenue, mostly from hockey, projected at $4.7 million, said Bill Conley, UNO vice chancellor for business affairs.
The arena plan still calls for $35 million in funding from private donations.
It also calls for a City of Omaha contribution of about $6 million. University officials said that would pay for street and infrastructure improvements around the arena, the same types of things the city would do on any project. UNO officials say talks with the city on that contribution are ongoing but have been positive.
Developer Scott Woodbury Wiegert, originally slated to develop and own the new arena, will continue to serve as project manager to take it through construction.
The university also is forming a new nonprofit university/community facility development corporation, led by a board of university and community leaders, that would oversee the entire project, including its financing.
Conley and Christensen said the arena will serve as an anchor to UNO's south campus and enhance the experience for students.
The new arena will provide an on-campus home for the hockey team and also eventually be the home court for UNO men's and women's basketball and the volleyball team.
Currently, the Maverick hockey team skates at the CenturyLink Center, the men's basketball team plays at the 3,500-seat Ralston Arena and the women's teams play at the on-campus Sapp Fieldhouse.
The new facility will include the main arena plus an auxiliary practice ice rink. Regents were told Friday how members of UNO's hockey team currently drive all around town to various city rinks for their practice, first having to drive to the CenturyLink Center to pick up their gear. Alberts said a practice that lasts 90 minutes can turn into a four-hour affair.
Besides serving university-related events, UNO officials said the arena would be available for high school graduations, public skating, youth hockey and other community events. Officials say they are guaranteeing that one-third of the ice time at the facility will be available to the public.
University officials hope to begin site preparation work by June, launch construction this fall and have the arena open for the fall of 2015.
The updated plan drew nothing but a positive response from the regents. That included former Omaha Mayor Hal Daub, whose administration initiated the CenturyLink Center and who was elected to the board in November.
Daub said he looked into whether the loss of the UNO hockey team would harm the bigger downtown facility. What he found was it will enhance the CenturyLink's bottom line by opening up more Friday and Saturday dates for other events.
Regent Jim Pillen of Columbus, a former Nebraska football player, called the driving around UNO hockey players go through to practice “just flat unacceptable.” He praised the financing plan based on private donations and facility-generated revenue.
“This is much more than a hockey arena,” he said. “This is a multipurpose community asset.”
“It improves the operation of the downtown facility. It's a win-win.''
World-Herald staff writer Leslie Reed contributed to this report.
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