Officials grapple with major funding gap for Rose Bowl upgrade
The ongoing upgrade of the Rose Bowl in Pasadena has hit a snag after officials disclosed a funding gap of $37.6 million.
Rose Bowl officials said on Saturday that they may have to postpone about $14-million worth of work and may seek a loan of $28.6 million to solve the shortfall.
Pasadena City Councilman Victor Gordo, who is also president of the Rose Bowl Operating Co., said at a meeting Saturday that negotiations with the Tournament of Roses and UCLA are ongoing to determine what work may be postponed.
Officials are also looking at extending the project a year past the original Jan. 1, 2014, deadline.
Crews already have installed new electronic signboards and made extensive progress in building new luxury seating and an expanded press box, but have yet to complete work on six new concession stands and tunnels that connect walkways to stadium seats.
A decision on delaying some aspects of the job is expected within the next two weeks. Rose Bowl leaders said they need to quickly define the work to be done in the next phase of construction and to secure a loan by October.
“We need action,” said Darryl Dunn, chief executive and general manager of the Rose Bowl Operating Co. “It needs to be right, but we do have time pressures.”
The cost of the project is now pegged at $176.9 million, roughly $25 million more than originally estimated and $1.9 million more than expected as recently as a month ago. Even as the endeavor got off the ground, it incurred a $12-million deficit because a bond sale to launch the project brought in less revenue than expected.
Rose Bowl leaders say the loan is required because revenue the stadium is expected to bring in won’t arrive for two to seven years.
Rose Bowl Legacy, a private fundraising effort among UCLA Bruin fans, Tournament of Roses supporters and Pasadena-area residents, is expected to bring in $19 million in donations, Gordo said, adding that the campaign so far has raised $8 million in pledges.
Officials are also counting on $4 million for hosting the Bowl Championship Series final — the game that will decide the No. 1 ranking in college football — in 2014.
What could end up being $14.3-million in deferred construction work will continue when “the revenues start coming in and Legacy gets to complete its role,” Gordo said.
The revamped stadium needs to make 72% of projected revenues to cover its debts, Gordo added.
“If we hit our revenue projections, we have a very significant cushion,” he said, emphasizing that the financial plan for the stadium remains sound, even with costs escalating.
Officials seem to be leaning toward taking a loan from a bank using a guarantee from the city of Pasadena, rather than turning to foreign investors or acquiring a loan directly from the city.
Andy Green, Pasadena’s finance director, said that a loan would be the quickest funding source, adding that tapping the city’s strained General Fund is out of the question.
“The city has basically repeated its stance that the General Fund will not be impacted by the project,” Green said, referring to the account that pays for most public services, such as police, libraries and public works.
A loan would not be without risks. If the Rose Bowl is unable to pay its debts, interest rates may rise or Pasadena’s credit rating or General Fund may take a hit, according to a city report.
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