Smith also spoke highly of Wetherbee, though mostly only in passing. He says his marketing background is going to be good for students (and cited the 600 students who came to the WMU game on Glow Night).

(02-16-2018 01:54 AM)emu steve Wrote:  Not surprised about the bonding (university issued bond for the $). I believe that was Chris Spears' plan from day one, as he had told me.

Basically it is how someone buys say a car. EMU uses their bonding authority up front and EMU athletics pays it back (to the U) over a short period of time, say 5 years.

And I believe the financing for the CBP will be included in a single bond with other campus capital projects. Essentially, EMU will take out ~$100 million in one bond (not as much as it sounds) and in a couple years will say "Hey, Wetherbee, you owe us about $15-18 million."

Again, that's a good thing. A larger bond like that (rather than a small one just for athletics) will be more interesting to investors, which means faster $$$ for the CBP.

(02-16-2018 09:00 AM)FrankAnderson Wrote:  

(02-16-2018 01:54 AM)emu steve Wrote:  Not surprised about the bonding (university issued bond for the $). I believe that was Chris Spears' plan from day one, as he had told me.

Basically it is how someone buys say a car. EMU uses their bonding authority up front and EMU athletics pays it back (to the U) over a short period of time, say 5 years.

And I believed the financing for the CBP will be included in a single bond for other capital projects. Essentially, EMU will take out $100 million in one bond (not as much as it sounds) and will say "Hey, Wetherbee, you owe us about $15-18 million" in a couple years from now.

Again, that's a good thing. A larger bond like that (rather than a small one just for athletics) will be more interesting to investors, which means faster $$$ of the CBP.

Yep, that is my understanding from what Spears had said to me. And EMU actually does well because EMU athletics will 'front load' the repayment, i.e., I assume the 10M pledged is all due within 5 years and some big givers, like the naming sponsor, may opt to front load their donation while the total bond issue might be much longer term. Who knows 10, 20 or even 30 years.

In everyday math, EMU athletics turns over say 10M within 3 to 5 years, while the university pays that 10M back over a much longer period of time which is a good deal for the university as a whole.

The big question is getting the difference from 10M pledged and the total amount agreed to between athletics and the department as a whole.

As we have noted, this is a VERY fair, equitable plan which is fair to both athletics and the entire university.

The U uses its bonding authority to borrow and EMU athletics uses its ability to raise donation to pay the debt service.

Win-win for all especially considering that athletics will vacate Bowen.

Better to lock long term debt in today's historic low rate environment as they say timing is everything

Exactly right, Steve and 79.

And remember, we have the Gameday Fund which we can partially use to make payments on the bond 10, 15 years down the road too. So less pressure to raise money for CBP specifically, and can go to donors to give to the overall department again.

When organizations do big capital projects like these, revenue towards their general funds take a little bit of a hit (naturally as donors can't/won't give to both). So after another year or two of hardcore fundraising for the CBP, staff can go back to raising money for the full athletic department (until it's time for Phase II).

The Board of Regents and Smith made the right call on this. It's a win-win.

My only question is after 3 - 5 years to pay off Phase I will the Athletic Department have donors who can pony up say another 20M for Phase II?

My guess is that if CC can bring home a MACC game trophy the money will roll in. Lot of the big MAC IPF, etc. were funded after the schools such as NIU, BG, etc. had big success on the gridiron.

Teams win more than a trophy for their trophy case, but big bucks for buildings.

(02-16-2018 09:48 AM)emu steve Wrote:  My only question is after 3 - 5 years to pay off Phase I will the Athletic Department have donors who can pony up say another 20M for Phase II?

My guess is that if CC can bring home a MACC game trophy the money will roll in. Lot of the big MAC IPF, etc. were funded after the schools such as NIU, BG, etc. had big success on the gridiron.

Teams win more than a trophy for their trophy case, but big bucks for buildings.

I think after Phase I is complete (or nearly complete) there will be some momentum in giving for Phase II. Example: After TJ Lang physically walks into the finished Lang Athletic Center, he'll be excited enough that you can probably squeeze another 6-figure pledge out of him. And so on with other major donors.

But it won't be easy. Good thing we have Dan McLean, Wetherbee, and gang.

(02-16-2018 09:54 AM)FrankAnderson Wrote:  

(02-16-2018 09:48 AM)emu steve Wrote:  My only question is after 3 - 5 years to pay off Phase I will the Athletic Department have donors who can pony up say another 20M for Phase II?

My guess is that if CC can bring home a MACC game trophy the money will roll in. Lot of the big MAC IPF, etc. were funded after the schools such as NIU, BG, etc. had big success on the gridiron.

Teams win more than a trophy for their trophy case, but big bucks for buildings.

I think after Phase I is complete (or nearly complete) there will be some momentum in giving for Phase II. Example: After TJ Lang physically walks into the finished Lang Athletic Center, he'll be excited enough that you can probably squeeze another 6-figure pledge out of him. And so on with other major donors.

But it won't be easy. Good thing we have Dan McLean, Wetherbee, and gang.

Frank, quite frankly these things are hit and miss. Get one donor willing to do 5M for naming rights and things happen; otherwise, nope.

http://www.emich.edu/regents/meetings/20...dation.pdf

(02-16-2018 01:48 PM)emu79 Wrote:  http://www.emich.edu/regents/meetings/20...dation.pdf

Yep, that is your 30 year bond.

So what Chris Spears had told me has essentially happened. EMU athletics gets say 20M dollars up front and give EMU 10M (say) within the first few years as partial repayment of the amount owing.

(02-15-2018 10:24 PM)FrankAnderson Wrote:  Good questions, guys. President Smith spent a lot of time (20+ mins) talking with the table my girlfriend and I were at. So I spent a lot of time with him but couldn't always lead the direction of the conversation.

First of all, the university is bond-financing the Championship Building and will be paid back by the athletic department. So we have the money to get the building done. This is good news, especially as it gives the athletic department more time to raise the money (build THEN pay back). And parsing Smith's language, it doesn't sound like the department will have to pay back all $20 million (he said double-digit millions, probably $15 million+).

Did not get to talk basketball, unfortunately. But most people in the room we're happy to talk about football and Chris Creighton. Smith was talking up Creighton's recruiting class.

Smith addressed the room and after a brief talk took questions from the crowd on any topic (I asked about the new heath building). Someone in the crowd asked about the staff positions being laid off. To his credit, Smith was very direct and detailed in his response to the layoffs. It was his longest answer of the night, and spoke about how thoroughly they analyzed the situation and how it hurt to let anyone go. Originally, it looked like 60 faculty/staff/administrators would need to be laid off, but they were able to reduce that number to about 35-40 by cutting vacant positions. So, it is still 35-40 people too many, but they did save 20-25 employee's jobs. I appreciated his transparency.

Rep. Debbie Dinged also briefly came and addressed the crowd. She gave the usual politician "I love this university in my district!" speech, but also said "Most people say Go Blue, but I always say Go Green, and NOT MSU." Just schmoozing from an elected official, but I think everyone in the room was happy to hear it from a US House Rep.

Frank thanks a bunch for this information! This makes this blog very valuable with respect to news. Again thanks.