Originally posted by RUJohnny99:
Originally posted by superfan01:
Let's take this one step further. Assuming it costs rutgers $100mm to build the expansion. Assuming we also had to borrow 80 mm at the 5% interest rate described above. That puts total cost of the project at 220 million after 30'years assuming we don't call bonds early ect...
Would the expansion really bring in 220 million in revenue over a 30 year period. I'm not sure and that can explain why so many were against it.
Let me know if im thinking about this right?
That $100 mm also included paying off the original $30 mm from the 1994 stadium expansion (the one that Corzine originally planned to absorb), so it's not such a cut & dry calculation.
Also, it wasn't a 30 year bond that was floated. It was a series of bonds over 27 years totaling $233 mm that covered stadium expansion, the welcome center, and something else. The blended interest rate was 4.43%. $38 mm of that $233 mm (rougly 16%) has already matured and been paid back. Assuming the proportion of debt remained equal between the projects funded, the remaining debt on the stadium is $83.5 mm, with blended annual interest payments of $3.7 mm for the next 20 years or so. Broken up, that is $58.5 mm on the expansion ($2.59 mm debt service) and $25 mm on the refinancing of the 1994 debt ($1.11 mm debt service).
Since the 94 debt covered the whole stadium, the entire old stadium revenue can be used to cover debt service and repayment. That leaves $2.59 mm interest payments and $58.5 mm principal payment on the "expansion" debt. Back of the envelope accounting, that is $110 million in revenue needed, or roughly $5.5 million per year. That expansion also included the club seats. The club seats require a $3000 donation, plus $900 season ticket, for total revenue of $3.1 mm. Which means the remaining seats need to generate $2.4 mm or $342,000 per game. That works out to $34.20/ticket, which is probably about what the price of those tickets were when expansion was first started.
Are you sure about $30M in debt from 2014? As I remember it, most of the 1994 construction was paid for by the NJ Sports and Exhibition Authority. The NJSEA refinanced meadowlands bonds at a lower rate and cashed out about $250M, most of that went to Atlantic City but Rutgers was given a piece for the 1994 stadium construction. I also remember the recent expansion being near the $100 mill mark, maybe lowered a bit when locker rooms and recruiting lounge were removed. The aborted Corzine fundraising effort was as I recall to lower the need for financing on the project, not pay off old debt.