Many colleges and universities, driven by the potential for increased revenue and the need to upgrade aging infrastructure, are joining the trend of professional teams by developing or expanding stadiums. Enhanced athletic facilities, especially new stadiums and arenas with suites and clubs, attract increased corporate support and donations from wealthy alumni. Better media accommodations woo national broadcasters and increase positive exposure for universities' athletic programs.
Modern sports facilities improve recruiting efforts and enable collegiate teams to remain competitive. And when one school in a conference upgrades, others feel pressure to follow. Expansion of venues for major revenue sports such as football also provides increased revenue to support Title IX compliance and pay for non-revenue sports such as volleyball and wrestling.
In many cases, renovating facilities is preferable to building a new stadium. New construction can be constrained by campus boundaries. For some institutions such as the University of Notre Dame, existing stadiums have great historic value. In other instances, a sense of obligation to previous donors leads a college or university to hold on to existing facilities.
When embarking on a stadium project, a school administration first must articulate why the university has decided to build or expand a facility. It may be to bring an obsolete stadium up to date or to produce more revenue. A new stadium also could expand the facility's use in the larger community — by bringing in concerts or minor-league sports teams. Usually it is a combination of these goals. Revenue generation may not always be the No. 1 reason, but if not, it's almost always No. 2 or No. 3.
For a renovation, schools have to decide many issues and overcome many hurdles. One major issue is the scope of the project. How much should the school add to the existing stadium or arena — suites, clubs, media space, training facilities, general seating, elevators and escalators, scoreboards and videoboards, concessions and restrooms?
Administrators also must decide which key players need to be involved in the decision. Beyond athletic department heads, should the school solicit input from alumni or others? The planning team may include the athletic department, team representatives, finance professionals and representatives of the alumni association or capital committee. Most universities also include faculty committees. If an outside organization is going to run the facility, its representatives also need to be involved.
Sometimes the needs and desires of these groups conflict. Varying constituencies often want more than the original program offers, and it can be difficult for a design team to keep a lid on requests for additional features. One of the key early duties of a construction manager is to monitor how the project is evolving, carefully balancing project requests with the school's stated budget.
An independent market study and feasibility analysis can be important in sorting out the priorities of the different groups. A study distills the needs of the various interest groups, compares the project with what has been done elsewhere, estimates potential revenue and helps measure the potential demand in the market. Large professional accounting firms as well as sports specialty consultants provide these services. Typically, the expense is not significant, and it is money well-invested.
At this point, both a designer and builder must be brought on board to start developing a program. Among the issues they must focus on is whether the existing facility is capable of accommodating the uses and amenities identified by the university and the feasibility study. For example, existing arenas typically can't be expanded up or out without expensive and time-consuming roof modifications.
SELECTING THE TEAM
Choosing the appropriate design and construction team is key to a successful arena or stadium renovation project. Most of these projects will be moving on a fast track, or with staged construction intended to minimize impact to other operations. In all but a few instances, it is not possible to fully design the facility and then put it out for a competitive lump-sum bid. Therefore, the university must select the designer and builder based on their qualifications and experience with athletic facilities — in particular, stadium and arena renovations.
The university should look at the candidates' track record in delivering these facilities within budget, on or before schedule, as well as their preconstruction services. Other factors to consider are whether the candidates have an office near the site; whether they have experience in the local market (so as to capitalize on relationships with local contractors); and whether their fees are competitive. The builder also should have experience working with campus security to maintain a safe work site.
One word of caution: the university should not rely on firms solely because their principals are alumni or donors, or have previously provided services. In many instances, it is possible to gain the best of both worlds and develop an effective joint venture between national sports facilities firms and local firms.
RAISING THE CAPITAL
A school must start with an accurate budget. Never assume or underestimate the total project cost. If the university has selected an experienced design and construction team, and if a good, unbiased feasibility study has been performed, the budget can be built from a solid foundation.
Universities can use a “modular” approach when its needs exceed its budget. It can build a facility that meets the essential needs, with “add alternates” for desired amenities. Say the university wanted 40 suites, but the budget, private donations or public funding supported only 20. Build out 20 to start, along with the shell structure for the additional 20 suites.
Often, donations come in as a project progresses and provide the funds to build additional amenities. The key is to design those elements as add alternates to the basic building and have the general contractor or construction manager seek competitive bids for those alternates when the base building is being bid. This locks in competitive pricing from the start.
Stadium funds commonly are raised through sponsorships and contractually obligated income (COI). Consider selling the naming rights for the stadium. Almost every professional arena and stadium today has sold naming rights to raise capital. Some sell naming rights separately for various elements: the stadium itself, the field, the lobby or the club levels. Some NFL facilities' naming rights contracts extend as long as 40 years at $200 million.
Other forms of COI include long-term leases on suites or club seats, pouring rights (exclusive agreements with soft-drink and beer companies) and exclusive in-venue sponsorships and advertising agreements. In cases where a university wants to optimize these COIs, especially on a national basis, it may consider hiring a consultant who is an expert in this area.
Careful preplanning is essential to the success of the construction project. The design and construction team must address a number of key areas early in the planning:
Scheduling and phasing. Construction scheduling and phased delivery are key to maintaining use of the facility while the project is underway. Among the questions the design and construction team must address early on with the school is when the work should be done — during the season or not. The team and school also must determine if certain events can or should be moved to some other venue. Arenas are the toughest to coordinate because typically they schedule more events than a football or baseball stadium. In almost all cases, the decision comes down to revenue loss vs. lower overall construction costs.
Campus logistics. Another major planning issue is related to campus logistics. Construction is, by its nature, disruptive. The school must make provisions for construction parking and traffic through campus. At the height of construction, there may be 300 to 400 additional personnel on campus, along with a proportionate number of vehicles. Haul routes and hours for major deliveries must be planned. Maintaining public safety is essential, so the construction team must work with campus security to control access and traffic.
ADA compliance. When modifications are planned for an older venue's seating bowl — say, addition of a club lounge and seating — this may require conversion of the entire seating bowl to meet standards set by the Americans with Disabilities Act (ADA). That is, 1 percent of the total seating capacity in all price levels must be accessible to the disabled; there must be a companion chair for each ADA seat; and the disabled person's sightline and that of the person sitting behind must be clear — even when a patron is standing in front of the area. In almost all cases, achieving compliance results in fewer seats. Door swings, ramps and elevators also must be assessed, and adding them will use existing circulation space.
Hazardous materials. Identification and proper removal of hazardous materials is extremely important, particularly in older venues. Hazardous materials include lead paint, asbestos and PCBs. Because the presence and location of many materials may not be shown on as-built drawings of the facility, it is essential that the builder perform select exploratory demolition. This should be done early in design — even as early as the feasibility study stage — to uncover hidden conditions and materials. This will enable the design/construction team to plan the most cost-effective removal, or to design around materials best left undisturbed.
Contingency plan. Contingency planning should be a coordinated effort among the design and construction team and the university. The team must anticipate what can possibly go wrong, and, on potential issues that could be show-stoppers, develop a recovery plan. The more research done on the existing facility (including exploratory demolition) and the more accurate the pricing and scheduling, the better all parties will be prepared to anticipate and plan for problems.
The construction budget should include contingency funds available to the construction manager to mitigate unknown circumstances that may arise during a project. Reduction milestones (points at which it is clear potential contingencies are no longer an issue) for that contingency budget should be predetermined so that unused funds can be reinvested in the project.
For the administration and board of trustees of any collegiate institution, planning a major arena or stadium renovation is a once-in-a-lifetime experience with enormous potential. To ensure a smooth project, they should develop a program based on independent, realistic market information, select a design and construction team with many winning seasons to their credit, and work with the team closely to consider all issues. The result will be a facility that is a great resource to the university and a source of pride to the community.
Koger is vice president and general manager, National Sports Group, Turner Construction Company, Arlington, Va. Turner worked on the University of North Carolina and University of Toledo projects.