Arena works off debt
February 17, 2009
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Despite a $9 million difference between funding and actual costs, Assistant Vice President of Facilities Management Larry Blake said the Bank of Kentucky Center construction did not go over budget.’ ‘
‘The remaining balance comes from ads, food vendors and university funds,’ Blake said.
NKU received $60 million total for the construction of the BOKC. The commonwealth of Kentucky gave the university $54 million in bonds up front and the remaining $6 million came from the Bank of Kentucky for naming rights to the arena.
After adding amenities such as a large meeting room and 1,800 additional seats, the cost of the new arena rose to $69 million.’ ‘ ‘
At its debut, the BOKC was left with a $9 million deficit to overcome, not including operating and maintenance expenses.
Blake explained that until 2008, every Kentucky university received funds from the state to cover operating expenses for state-funded buildings. Last year, no one received those funds, leaving NKU to make up those funds not only for the Bank of Kentucky Center and the new Student Union.
If Kentucky was still disbursing these funds to colleges, the Student Union would be completely covered as an academic building completely devoted to serving students. As a multipurpose building designed to serve both the university and the surrounding community, the BOKC’s operating expenses would only be covered about 50 percent, Blake said. NKU athletic games and educational uses of the arena would be covered, but concerts and shows would not be.
Despite not receiving funds that Blake said the university expected to cover maintenance and operating expenses, he said the BOKC will eventually pay for itself by bringing in revenue from hosting events, and that students’ tuition will not be directly affected by the difference.’ ‘
Blake explained that the funds from the university come from ‘restricted funds,’ which is a general fund that is supplied from many different sources, including tuition. He added that the restricted funds account is set up to cover the operating budget.
‘The Bank of Kentucky Center is intended to be a self-sufficient building,’ Blake said.
‘This is not a deficit operation; over time it will do better. It is expected that the revenues from events will pay for operations.” ‘
Blake mentioned some things that he would like to see improved at the BOKC, such as student attendance at basketball games.’ ‘
‘The Bank of Kentucky Center is expected to help NKU achieve a high growth rate,’ Blake said. ‘One of the characteristics of a large university is an emphasis on recreation and sports.’