To the Editor:
It is somewhat ironic that the headline on the letter "Memo to Berkeley: Look to Data Before Undertaking Grand Projects" (The Chronicle, May 15) perfectly captures our approach to the California Memorial Stadium project, even as the body of the letter relies on demonstrably false information contained in a recent Wall Street Journal story to incorrectly claim that we failed to assess the project with "real-world" data before its initiation. Reliance on an article that required the Journal to publish a significant correction is, to say the least, unsettling.
First, it must be noted that the renovation and seismic retrofit of California Memorial Stadium was not an optional or discretionary endeavor. UC Berkeley was directed by its regents to either address life-safety issues or vacate the facility. Lacking other viable options, we had no choice but to develop a financial model that would allow us to pay for the endeavor without relying on state funds or tuition. Before embarking on the project, the financing model—which relies on the sale of long-term rights to nearly 3,000 seats, ticket surcharges, philanthropy, and other revenue streams—underwent a thorough analysis to determine its viability. A special committee of our Academic Senate, one that included faculty members well versed in finance, reviewed the strategy and determined it to be both feasible and affordable. We tested the model with a wide variety of scenarios and found that many would generate funds in excess of those required by the construction and thereby provide our department of intercollegiate athletics with substantial financial resources to support our operations when the bonds are paid off.
The value of seats sold to date exceeds $144-million, and even though the stadium is still under construction, my department is already assured of sufficient revenue to meet debt costs for at least the next 26 years, even as the sales effort continues and new revenue sources are developed. Suffice it to say, we will continue to closely monitor the very "real-world data" we have been accused of ignoring and are fully committed to ensuring the financial model remains viable, even in the context of worst-case scenarios.
In our continuing effort to be transparent with stakeholders and others interested in the project, we are regularly posting updated data and analysis of the financial model on our Web site, at CalBears.com. We have also gone to great lengths to ensure that we have created a credible financing model in a responsible way that will allow our entire campus community to enjoy Memorial Stadium for many more years to come.
Director of Athletics
University of California