Regents approve $100M-plus price increase for KU football stadium, gateway project; $250M cancer center building also gets green light
photo by: University of Kansas/HNTB
Emporia — An expected $100 million-plus increase in the price of the University of Kansas’ football stadium and campus gateway project produced no worries for the Kansas Board of Regents on Wednesday.
Regents at their monthly meeting at Emporia State University approved a new budget of $448 million for the project, which will renovate the west half of David Booth Kansas Memorial Stadium, add a conference center into the stadium’s north bowl and open the door for the area around 11th and Mississippi streets to become a new entertainment district for convention-goers and others.
The new budget is a major jump from the previous estimate of $335 million, but KU leaders said the higher price tag should produce no worries that KU will dip into general university funds to pay for the project. KU has committed that no tuition dollars, nor general state higher education funding dollars will be used to pay for the project.
University of Kansas Chancellor Douglas Girod reiterated that commitment on Wednesday.
“We wouldn’t do the project if we thought we were going to have to use those funds,” Girod said in a brief interview with the Journal-World. “We need those moneys for other things. We have other big investments we need to make that aren’t in football.”
KU plans to use $248 million in private donations, $85 million in state economic development grant funds and up to $115 million in debt that will be paid for by Kansas Athletics, the KU-controlled entity that runs the university’s athletic department.
That $115 million in athletic department debt likely will be “backstopped” by the full financial resources of the university, Regents were told on Wednesday. But Jeff DeWitt, chief financial officer for KU, said he was “extremely confident” that KU would not have to use any of its general resources to pay on the athletic department debt. KU, however, is willing to use the university’s general funds as collateral on the debt because it likely will allow Kansas Athletics to borrow money at a lower interest rate. DeWitt said interest rates without KU’s general backing might be around 9%. With the KU backing, the rates could be closer to 5%, he said.
Kansas Athletics plans to pay off the debt with increased revenue that an enhanced football stadium is expected to produce. Those new revenues are expected to come from more luxury suites in the stadium, greater concessions, and other amenities that will be offered to fans.
KU also is expecting to generate new revenue through the convention and event space that will be built in the north bowl. DeWitt said Kansas Athletics will receive some new revenue from those operations, but most of the convention and event revenue will be used to support other parts of the university’s budget.
Both DeWitt and Girod said they are confident the renovated stadium will produce enough new revenues for Kansas Athletics to pay off the debt. Girod said he instructed officials to be conservative in how much debt could safely be added.
“Frankly, if we didn’t care about any of that, we would let them borrow a lot more and the stadium would get done a lot easier,” Girod said. “But we would end up paying for it, and we just aren’t willing to do that.”
As for why the project costs have increased so much, Girod said university leaders expected some increases in the project total. Construction materials have been greatly impacted by inflation, he said. Beyond that, Girod said leaders knew the previous estimate of $335 million would need some revision. Parts of that estimate still were largely based on earlier ideas when the project was solely meant to renovate the football stadium.
Adding the conference center — which is expected to have seating for 1,000 — has added costs to the project, but KU leaders said the facility is critical to KU’s strategy to produce new sources of revenue for the entire university. For example, DeWitt on Wednesday said he thinks even the university’s housing and dining divisions will generate new revenue from the initiative as KU expects to host some events that will have attendees staying on campus and dining in university facilities.
DeWitt said KU also was committed to making the facility a community asset, and that it would be used for events and conventions that don’t have a university connection. In addition, he said the stadium’s plans also are being drafted to better accommodate soccer matches, as demand for higher-profile matches is expected to grow in the region in the coming years.
Wednesday’s approval by the Regents was needed for the project to move forward. Work at the 11th and Mississippi site will become visible quickly. DeWitt noted that Saturday’s football game against Kansas State will be the final opportunity to see the stadium in its current form. In the days following the game — which is the last home game of the regular season — crews will start major work to begin transforming the stadium.
“We will start tear down this winter,” DeWitt said.
Large parts of the west-side grandstands are expected to be removed and replaced. KU plans to play its 2024 football season with the stadium under construction. KU leaders have said that will mean a greatly reduced capacity for the stadium, with most seating limited to the eastern grandstand.
Expect work to last at least until August 2025. The stadium renovations are expected to be done by that time, but other work on surrounding amenities may still be underway. The $448 million project is what KU is calling Phase I of its plans for the gateway district. It does not include a host of amenities and buildings that consultants are recommending be constructed around the stadium.
A consultant has told KU the project could feasibly include a 175-room hotel, more than 50,000 square feet of restaurants and retail space, 20,000 square feet of medical and office space, a 2,500-seat concert venue and about 175 units of student apartments. KU is receiving proposals from three private development firms that have expressed an interest in developing at least some of those elements. KU is expected to receive those proposals in the coming days and plans to choose a development partner early next year.
KU also has said a Phase II for renovation of the stadium could occur in the future. That would include renovations to the east grandstands and other areas not included in the Phase I project. No timeline or budget for that project, however, has been determined.
In other business, the Regents also unanimously approved a budget of $250 million for a new cancer center building on KU’s medical center campus in Kansas City, Kan. The project would greatly increase and modernize cancer research space for the medical center, which has been designated a Comprehensive Cancer Center by the National Cancer Institute. That designation is the highest given by the institute, and is the same designation that well-known cancer treatment campuses such as the Mayo Clinic in Rochester, Minnesota, and the MD Cancer Center in Houston have, for example.
Regents were told Wednesday that NCI officials “made a very strong point” that KU needed a facility to consolidate its cancer research functions into a single building. As proposed, the project would provide about 212,000 square feet of research space. The $250 million project, though, is only about half of what KU leaders contemplate for the entire cancer center building.
KU expects the university’s health system — which operates the KU hospital and others — also will spend about $250 million to double the size of the building. The health system portion of the center would focus on new patient care areas, while the university portion of the building would focus on research spaces.
The two spaces would work together in multiple ways, including hosting cancer treatment trials for patients based on the latest research.
KU has announced that more than $140 million in funding for the center has been raised through federal funding and private donors. KU also will have a funding request before the Kansas Legislature next session. Girod said if that funding request is approved, he thinks the project could begin construction in the summer or fall.
Wednesday’s approval by the Regents cleared the way for design work to begin on the project, although the health system portion of the project still needs approval from its board, Regents were told.