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Barnhart, Todd insist expansion is vital for athletic success, even as the university faces tough financial times

UK’s athletic program is looking for a facelift for three of the marquee programs.

A team of corporations and UK are exploring a study that will allow private financing for a new downtown arena to replace Rupp Arena as well as a new on-campus baseball stadium and major renovations to Commonwealth Stadium.

Early estimates place the price of the project in the $400 million range.

The cost is daunting, especially in light of UK’s financial stability, which has been in question over the last few years. Early in 2008, UK President Lee Todd announced the university was losing $20 million in state aid because of state budget cuts.

That raises important questions, among them how UK plans to finance such an expensive project at a time when the school is cutting its budget and raising tuition.

But UK Athletic Director Mitch Barnhart said the plans, which include a new basketball facility to replace 32-year-old Rupp Arena, are structured in a way that the cost will lay almost solely on private investors.

“Basketball has always been the staple program here at UK, and we want to stay as competitive as possible and sharpen our program,” Barnhart said. “We had no impact on the academic programs and look to enhance our own program thanks to our gracious donors.

“Major donations will come from supporters of UK basketball who want to see the program succeed at the highest level,” Barnhart said.

The study, which will be conducted by IMG College and the International Stadia Group, is expected to take six months. The two companies will be looking to find a way to finance the projects with private money while preventing companies from losing money.

The financing, if justified by the study, will be provided by an innovative, private financing opportunity. The plan will allow UK to not be constrained by public funding and donor contributions.

ISG will create unique research models for UK that will maximize both consumer impact and commercial revenue potential, while IMG will contribute the sales and marketing experience to maximize the revenues generated by each revenue.

If the university ultimately decides to build a new basketball arena, it will remain downtown.

Though moving the arena to campus would make getting to basketball games easier for students, keeping it downtown is imperative if the project would work, Barnhart said.

“Keeping that arena downtown will allow us to keep the strong bond President Todd has strived to keep with the city,” Barnhart said. “Keeping the arena downtown will also allow two parties to operate it, rather if we placed it on campus.”

The partnership with the Lexington Center is crucial to the completion of the project, said Tom Stultz, senior vice president of IMG College.

“In order to make it work we have to make sure the Lexington Center and the University of Kentucky will be able to continue to make the revenue from the arena they’re used to,” Stultz said.

While the new arena will be the largest of the projects, Barnhart said the new suites, club seats and other improvements to Commonwealth Stadium and the new baseball stadium are equally important to UK.

“This could be a huge development to UK athletics and its fans,” Barnhart said.

The expansion of UK’s athletic facilities would be the second large splash in the state, after the University of Louisville’s planned expansion of Papa John’s Cardinal Stadium and the building of a new downtown arena by 2010.

Unlike those projects, which will both rely on at least some public funding, IMG and ISG are seeking innovative ways of funding for the UK expansion, relying heavily on not only private donors but on earnings from marketing at the new facilities. The project would be the first of its kind for an NCAA school.

According to Stultz, the designers and planners will take into consideration the revenue per stadium when deciding when to work on each part of the project. The study will look at new signage and billboards at the downtown arena and Commonwealth Stadium as well as seat licensing and hospitality service to determine a revenue per stadium.

IMG College, formerly Host Communications, has been a media rights holder at UK since 1974.

Though the plans are in the infant stage and haven’t been tried at this level yet, the opportunity to investigate new ways to fund athletic facilities is a no-brainer if UK wants to remain competitive in college athletics, Todd said.

“When our marketing partner, IMG, presented us with the concept of possibly funding these facilities, we felt it was an incredible opportunity for us to provide championship facilities for our sports teams without requiring public funding,” Todd said in a news release. “If their study finds these projects can be supported through marketing and multimedia programs, then UK and the city of Lexington will benefit greatly from these new and expanded facilities.”

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