UNO arena expected to be 'enormous resource for our community' - Omaha.com
Published Monday, March 18, 2013 at 12:30 am / Updated at 1:51 pm
UNO arena expected to be 'enormous resource for our community'

It's been more than six years since a commission looking into athletic finances at the University of Nebraska at Omaha first recommended building an on-campus arena for the Mavericks' signature hockey program.

And during much of the nearly four years since Trev Alberts was hired as UNO athletic director, he has worked with Chancellor John Christensen to champion such an ice palace, with little concrete to show.

But it's now clear the arena is no ice folly.

The project has been wholly embraced by Heritage Services, an organization that harnesses the wealth and clout of many of Omaha's most prominent philanthropists. And history has shown that when Heritage Services puts its resources behind Omaha civic projects, they usually move in short order from dream to reality.

From new high school football stadiums at Central and South High Schools to mega-public assets such as the CenturyLink Center Omaha, TD Ameritrade Park and the Holland Performing Arts Center, Heritage has left a major mark in Omaha over two decades, raising some $435 million toward $800 million in public facilities.

“We're not interested in backing white elephants,'' said Sue Morris, president of Heritage Services.

To that end, Heritage Services decided in November that an on-campus multipurpose arena of 7,000 to 7,500 seats with an adjacent practice ice sheet is not only desirable for Omaha but would meet real community needs.

Heritage says the $76.3 million facility planned near 67th and Center Streets on UNO's Ak-Sar-Ben campus will add to the student life experience.

It will provide an on-campus home for hockey and the school's emerging Division I basketball and volleyball programs, add to campus recreation opportunities, reconnect alums, provide public exposure to the campus, and in the end help the university reach its ambitious goal to grow enrollment from 15,000 to 20,000.

With the City of Omaha now planning to close the cash-strapped Civic Auditorium in 2014, Heritage says the UNO arena will provide a fully modern, amenity-rich replacement facility. They see the arena hosting high school graduations and the many events too small for the 17,000-seat CenturyLink but too big for the new 3,500-seat Ralston Arena.

And Heritage says the project will add much-needed ice sheets for youth hockey and other ice sports. Heritage and UNO are committing that one-third of the ice time at the new facility would be available to the public.

“We think it's really good for Omaha,'' John Gottschalk, retired publisher of The World-Herald and vice chairman of Heritage, said of the project. “UNO is an enormous resource for our community.''

That's why Heritage committed to join with the University of Nebraska Foundation to raise the $35 million in private funds needed to finance construction.

Gottschalk said the group has also closely examined the facility financing plan devised by UNO officials, finding the numbers both realistic and workable.

With last week's vote by the Board of Regents to approve issuing $35 million in public bonds for construction, and Heritage's pledge to raise another $35 million in private funds by the end of this year, it appears the arena is clearing its biggest funding hurdles. What's left is $6.3 million that university planning documents list as coming from the city and other sources.

Heritage and UNO officials say the burden that cost would put on Omaha taxpayers should not be overstated. The costs they are looking for the city to pick up are for street and infrastructure improvements around the arena — the same types of things the city would do on any project, and within current tax resources.

“This is not a raid on the City of Omaha treasury,'' Gottschalk said.

Regardless, Heritage officials say they are committed to making sure all arena costs are covered one way or another — yet another indication the arena will open as planned in time for the first drop of the puck in the fall of 2015.

Few dispute that the launch of a Division I hockey team in 1997 has been a good thing for UNO.

The sport provided the school an athletic niche outside of University of Nebraska football and Creighton University basketball. It's also raised the school's profile and aided in its transition from a commuter campus to a rising “metropolitan university''— a class of big-city public institutions that engage in their communities and serve growing business needs.

Hockey also initially proved a cash cow for the UNO athletic department, with the Mavs regularly drawing raucous sellout crowds to the 8,300-seat Civic. But that success rested on thinner ice than anyone imagined.

The team in the fall of 2003 moved to the glitzy new CenturyLink Center. While the move more than doubled UNO's arena rent, the hope was that the program would make up for that by drawing larger crowds.

In the end, the move actually reduced demand for tickets. Fans who once feared getting shut out of the sold-out Civic quickly realized they no longer had to own season tickets to get good seats in the spacious arena. UNO's season ticket base dropped from 7,300 to under 4,000.

The much bigger arena also didn't provide the same electric atmosphere as the cozier Civic. Average crowds fell to about 5,000 fans per game.

Suddenly, an athletic department that was flush with hockey cash began running $1 million annual deficits. That ultimately contributed to the controversial decision by Alberts and Christensen to drop the school's football and wrestling programs two years ago this month at the same time it moved to Division I for all athletics.

While the Mavs have enjoyed some on-ice success, Alberts said the school's lack of a hockey practice facility has made it tough to recruit top hockey talent — the lifeblood of any top program.

Just to practice, UNO players must carpool downtown to the CenturyLink locker facilities to get their gear, drive as far as 15 miles to public ice facilities in the city, and then return to the CenturyLink afterward. A 90-minute practice can quickly turn into a four-hour commitment. That's something that has been used against UNO in recruiting, Alberts said.

While rumors of UNO's plans to build an on-campus arena circulated widely after the school's 2009 hiring of Dean Blais — one of the nation's top hockey coaches — no announcement was ever forthcoming.

The first clear sign of progress came last October, when Alberts and Christensen announced the university's push to build an arena as a new anchor to UNO's south campus. The Board of Regents that same month gave the UNO leaders authority to work with a private developer on the project.

But the arena received a quiet boost a month later from Heritage Services.

A unique organization founded two decades ago by billionaire businessman Walter Scott, Heritage marshals the clout, business acumen and financial resources of some of Omaha's biggest philanthropists. The organization doesn't just write checks, but helps oversee projects from design to final landscaping to assure all citizens contributing to a project get their money's worth.

Alberts said he first approached Scott, chairman of Heritage, about 18 months ago. There was much discussion and work on numbers in the months that followed. Howard Hawks, an NU regent and Omaha businessman, ultimately took the case for the arena to the Heritage board.

In November, the 13-member board found the case compelling, voting unanimously to support the project and to help raise the $35 million in private donations.

Within two months, Heritage and UNO officials were traveling together to visit similar ice facilities on the campuses of Penn State and Notre Dame and in Boston. Financial plans for the facility were also soon revamped.

The original plan called for the facility to be built by a private development group that included Scott's son, and then leased back to UNO on a lease-purchase agreement. Hawks eventually helped convince the parties that it made more financial sense to have UNO own and build the facility. As a public entity, it could issue tax-free bonds at much more favorable interest rates.

Under the financial plan approved Friday by the regents, the university's facilities corporation will issue $35 million in bonds to be paid back over 25 years by facility revenues.

UNO will need to come up with $2.1 million annually to pay off the bonds and an estimated $2.3 million to operate the facility. But UNO and Heritage officials say financial projections indicate that revenues from the new arena will more than cover those costs. Gottschalk said the UNO numbers have been “scrubbed very hard.''

One key, those behind the project say, is getting UNO hockey into a “right-sized'' arena that will allow it to rebuild its ticket base.

Alberts said UNO is conservatively estimating that the new arena will help boost average per-game ticket sales from 5,000 to 6,000, a figure that would bring in about $400,000 in additional revenue each year. But he's hopeful the Mavericks will ultimately reach the point of again selling out, once again using limited ticket supply from a smaller arena and high demand to leverage season ticket sales.

But increased ticket revenues would be just the start of new dollars the arena's backers say the facility can generate.

They foresee $1.4 million coming in through the sale of suites, club seats and priority seating, premiums paid for the best seats in the house.

UNO currently receives no cut of concession revenue at the CenturyLink Center. UNO estimates $1.2 million in concession revenue in the new arena, much of it driven by the beer sales that have traditionally gone hand in hand with hockey. Christensen said regents have indicated the sale of beer will be OK in the campus arena as long as it's handled and policed the same way it has been at the city arenas over the past 16 years.

There would also be new revenue from corporate sponsorships/advertising, naming rights and community ice rental fees. In all, university officials say their “middle-of-the-road'' estimate is that new revenues will total $4.7 million.

That estimate would exceed the $4.4 million in estimated bond and operations costs. Throw in $600,000 UNO would save on what it currently spends to rent the CenturyLink and city ice rinks for practice, and the cushion grows to nearly $1 million.

UNO officials say their estimates also generally don't include other revenues that could be driven by other Maverick sports teams using the new facility. They also don't include some $400,000 the university would save by utilizing the 1,700 arena parking spots for student parking during the school day. The university currently rents spots from Crossroads Mall.

When the regents approved the bonding plan Friday, they also gave UNO the authority to form a nonprofit board made up of university officials and Heritage members that will oversee the finances and construction of the new arena. Members of the board include Hawks as chairman, Christensen, Alberts, Gottschalk and Omaha businessman Ken Stinson.

The bond plan in place, the focus now turns to raising the private funds. Heritage and the NU Foundation have yet to make their first formal request, but Gottschalk said they're optimistic about the response. In past Heritage campaigns, he said, donors who had little interest in the project at hand have often taken the attitude that “if it's good for Omaha, count me in.''

Alberts and Christensen said they can foresee a day in the not-too-distant future when UNO students can walk from their dorms to athletic events at the new on-campus arena. They said Omaha is lucky to have such unique partnerships between the public and private sector.

“We know we have a lot of work to do,'' Alberts said. “But we're really pleased with where we find ourselves today.''

Contact the writer: 402-444-1130, henry.cordes@owh.com

Contact the writer: Henry J. Cordes

henry.cordes@owh.com    |   402-444-1130    |  

Henry's a general assignment reporter, so he could end up writing just about anything, though he usually focuses on public policy matters affecting the state, region or nation.

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