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UO arena revenue forecast scrutinized.

Byline: Greg Bolt The Register-Guard

A flap The communications protocol used by AOL Instant Messenger (AIM). FLAP runs over TCP/IP and provides the header format for transmitting IM commands and data. It includes the SNAC data type, which is the primary data structure transmitted between clients and servers. See OSCAR.

 over how much money a new University of Oregon The University of Oregon is a public university located in Eugene, Oregon. The university was founded in 1876, graduating its first class two years later. The University of Oregon is one of 60 members of the Association of American Universities.  basketball arena will generate has given critics of the $200 million project a second wind, but it hasn't shaken the university's confidence that the building will pay off.

Whether the arena will be able to pay for itself - with help from a $100 million gift from Phil and Penny Knight - has been a point of debate since the project was first proposed. That debate intensified in·ten·si·fy  
v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies
1. To make intense or more intense:
 last week when skeptical faculty circulated a four-year-old report that was critical of an earlier UO arena plan.

That report, by former Eugene City Manager Mike Gleason and completed in 2004, said that revenue assumptions from ticket sales and other sources for the earlier project appeared unjustifiably high and faulted the methods used to calculate them. It calculated lower revenue than the study done the previous year by consultant Conventions, Sports and Leisure Inc. for the UO.

Gleason, using data analyzed an·a·lyze  
tr.v. an·a·lyzed, an·a·lyz·ing, an·a·lyz·es
1. To examine methodically by separating into parts and studying their interrelations.

2. Chemistry To make a chemical analysis of.

 by Eugene economic consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee
consulting company

business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a
 ECONorthwest, estimated annual arena net revenues before debt payments at $4.1 million; the 2003 CSL (Computerese as a Second Language) Said of people who love to speak high-tech words even though they often use them erroneously. See TLA.

1. CSL - Computer Structure Language. A computer hardware description language, written in BCPL.
 report put them at $5.4 million. The most recent arena study for the UO - in 2007 - also was done by CSL but was based on more detailed information about the size and features of the new arena. It projects net revenue before debt payments of $12.3 million under a conservative scenario to $18.2 million under an aggressive scenario (those amounts are inflation-adjusted to 2010, the year the arena is expected to begin operations).

Annual debt payments are estimated at $14.5 million - meaning that depending on the scenario, the arena could require an annual subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare.  from donors, or could generate a surplus for the athletic department.

The wide range of revenue estimates, and the sharply higher numbers in the most recent CSL analysis, has forced the UO onto the defensive as it tries to counter fears that the arena won't generate the kind of money the UO is expecting. That in turn is driving concern that if the arena turns into a white elephant White Elephant

Any investment that nobody wants because it is unprofitable.

The term 'White Elephant' is derived from Thailand, where an Albino (white) elephant was given to unfavored people by the ruler.
, the university's general fund - the money that's used to educate students - will have to be tapped to bail out the athletic department.

Given the difficulties of predicting how many people will pay more money to attend not only men's basketball games but also women's games, volleyball volleyball, outdoor or indoor ball and net game played on a level court. An upright net, 3 ft (or 1 m) high, the top of which stands 8 ft (2.43 m) from the ground for men, 7 ft 4 1/8 in (2.  games and whatever concerts and other events the UO can book into the arena, the university is facing increasing anxiety over its financial risk in taking on the project.

"The fact that there are quite a wide range of revenue estimates raises questions about how much money will actually be raised," said UO biology professor Nathan Tublitz. "That leads to the possibility that there will be difficulties finding the funds to pay the expenses for the arena years down the line. Those of us who are concerned, and there are many, just want to make sure that the arena financial plan remains self-sufficient and does not affect the academic side of the university."

The fact that the university did not promptly release Gleason's report to economics professor Bill Harbaugh when he requested a copy fueled speculation that the administration was trying to hide something. The university said it could not immediately locate a copy of the report.

"I support (UO) President (Dave) Frohnmayer's efforts to build the arena. I believe it will be a big plus for Eugene," Harbaugh said in a e-mail message. "I oppose his efforts to hide important information about this project from the university, the public and the Legislature, while claiming that he has been open and transparent. I think this is a big negative for the cause of good government."

Frohnmayer dismisses the criticism, saying it is wrong to compare the earlier figures with the current ones. The older numbers, he said, were developed before the university had picked and bought the former Williams' Bakery for the arena site, assumed a larger building with less flexibility for other uses and were based on a starkly different financial plan that never anticipated the Knight donation.

"The ECONorthwest report was an exercise," Frohnmayer said. "All the assumptions were completely hypothetical Hypothetical is an adjective, meaning of or pertaining to a hypothesis. See:
  • Hypothesis
  • Hypothetical
  • Hypothetical (album)
 ... and expressly tentative."

Frohnmayer said he remains confident that the newest CSL projections will hold up.

"First of all, it's historically more current based on market testing," he said. "Second, they have a methodology behind them that's much more sophisticated; and finally, it's about this project, located on Franklin Boulevard on property we now own, as opposed to a hypothetical structure of indeterminate That which is uncertain or not particularly designated.

INDETERMINATE. That which is uncertain or not particularly designated; as, if I sell you one hundred bushels of wheat, without stating what wheat. 1 Bouv. Inst. n. 950.
 location and no specified design."

Gleason supported Frohnmayer's view. In an e-mail to the UO president, Gleason excoriated a story in a Portland newspaper that suggested his analysis could be applied to the new project.

Gleason said he was outraged by that connection and said the earlier work "had no relationship to the current plan you have proposed." He also said that applying revenue projections from the older project to the new one was illogical and "does a great disservice dis·ser·vice  
A harmful action; an injury.


a harmful action

Noun 1.
 to the legitimate and necessary public discourse around financing public projects.

As for allegations that the university was trying to hide the report, Gleason said he made numerous appearances before neighborhood groups, faculty and business groups after the report was complete to talk about its findings and other issues.

Contacted Tuesday, Gleason again said it would be wrong to judge the current plan against the finding of his older work. If anything, he said, Frohnmayer should be applauded for having addressed in the new arena plan most of the concerns raised earlier.

Not everyone is convinced of that. UO finance professor John Chalmers John George Chalmers (born c.1880 in New York; died c.1962) was the seventh head football coach at the University of Iowa, coaching from 1903-1906. He also coached at Loras College and the University of Dubuque. Background
John G.
, who led a faculty subcommittee sub·com·mit·tee  
A subordinate committee composed of members appointed from a main committee.

 that reviewed the 2007 CSL study, said the bottom line is that all the studies were trying to assess the same thing: how many people would pay higher ticket prices to attend UO basketball games.

"It is a basketball arena; it is in Eugene. There are only a certain number of people who are going to go to basketball games," he said. "To claim the (different results) are totally irrelevant ... things are different, certainly, but that doesn't mean they're irrelevant."

Lost in the current debate over the older study is its conclusion: that the UO would still come out ahead on the arena. Gleason concluded it just wouldn't have as much net revenue as the UO was expecting at that time.

That's also been the conclusion of nearly every review of the new arena plan, including those by faculty and legislators.

The lone exception is a worst-case scenario worst-case scenario nSchlimmstfallszenario nt  in the faculty review that cut revenues to half of the conservative estimate in the 2007 CSL report. And even then, the arena wouldn't be in a financial crisis for almost 15 years, which faculty acknowledged was more than enough time to develop a response.

Even though Frohnmayer downplayed the new round of concerns, he was quick to respond when the controversy spread to the state Legislature A state legislature may refer to a legislative branch or body of a political subdivision in a federal system.

The following legislatures exist in the following political subdivisions:
 and raised concerns among lawmakers.

On Monday, he sent an e-mail to the co-chairmen of the Joint Ways and Means WAYS AND MEANS. In legislative assemblies there is usually appointed a committee whose duties are to inquire into, and propose to the house, the ways and means to be adopted to raise funds for the use of the government. This body is called the committee of ways and means.  Committee pledging to further protect the university's general fund by establishing a bond reserve fund as further insurance against arena revenue shortfalls.

Legislators largely said the questions raised by the older studies haven't turned them against the arena, and the UO's chances for getting legislative approval for the bonds appear to remain good. Gladstone Democratic Rep. Dave Hunt For other persons named Dave Hunt, see Dave Hunt (disambiguation).

Dave Hunt (1926 – ) is a Christian apologist, speaker, radio commentator and author. He has been in full-time ministry since 1973.
, the House majority leader, said Tuesday that he hasn't heard of any significant opposition to the idea. A floor vote on an omnibus omnibus: see bus.  funding bill that includes the UO bonds has not been scheduled.
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Title Annotation:City/Region; The wide-ranging estimates of proceeds have forced the university onto the defensive
Publication:The Register-Guard (Eugene, OR)
Date:Feb 14, 2008
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