New Business —

1. Introductions
   1. The chair, members, and guests each introduced themselves.
2. Review of charges
   1. The committee reviewed the standing and specific charges for this year.
   2. Standing Charge #3: We don’t yet have hard data on enrollment and tuition, so that will be a discussion for a later meeting.
   3. Specific Charge #2a, specifically regarding the broad planning committee, may need some revision. We heard from the University Senate President that there is already a committee set up for this project, so it may be more worthwhile for the P&R Committee to review that committee’s membership and perhaps interface with them, rather than creating a separate committee. The Governance Office will gather more information about this and report back to the committee.
   4. Specific Charge #3: The public forum with the CFO has just been scheduled for Nov. 6, 2:30-4:30 p.m. Once a location is selected, the Governance Office will notify campus.
3. Discussion of Gateway District Project
   1. Jeff DeWitt spoke about the current progress and plan of the Gateway Project.
      1. The best way to stay updated on the current progress of the project is via the project website (https://gatewaydistrict.org/). Jeff can speak about the funding plan and how the university will pay for the development, but the committee should invite Karla Leeper (Vice Chancellor for Strategic Communications and Public Affairs) to answer questions about the external communications and community involvement.
      2. Budget and financial plan
         1. KU has engaged in significant fundraising for the stadium and been in conversations with KU Endowment about how to fund the project initially with pledges coming in over time.
         2. The project will be primarily funded by donors. The federal/state government has provided $85 million for the project, specifically for the conference center and the economic development portion. There will likely be stadium-generated revenue contributing as well, which will pay off borrowing by KU Athletics.
         3. The donor and federal money will fund Phase 1, which includes the stadium updates (north and west side). The plan is for this to generate 90% of the revenue to continue funding the rest of the project through revenue bonds.
      3. Stadium and conference center
         1. While the capacity of the stadium is decreasing, the hope is that the quality of the experience will be better. The seats will be larger, with better lighting (less light pollution) and a better scoreboard display. The Anderson complex will also be renovated. There will be better food options.
         2. The addition of the conference center on the north side will make the stadium a 365-day facility. This will be the largest conference space in Lawrence.
         3. The field can be used for other entertainment purposes as well, such as movie viewings.
      4. Other amenities surrounding the main facility are still pending. They could include a hotel, an entertainment venue, student housing, and more. This will be the new entrance-point of the Lawrence campus.
      5. We anticipate concerns about impacts on parking, the surrounding neighborhoods, and local driving. These are currently being discussed with the City of Lawrence.
      6. Construction on the stadium will begin in December after the end of the football season. Phase 1 is planned to be completed in 2025 and full use of the conference center can begin.
   2. Q&A
      1. Jin Feng added that his goal for the P&R Committee in this space is to open a direct line of communication between university constituents and the CFO’s Office. His goal is for committee members to be able to share concerns and make recommendations.
      2. Q: The reliance on revenue for building later phases of the project sounds similar to the financial model for central campus, part of which led to the structural deficit that we are currently experiencing. Is this the same model? Who is the backstop for if the project does not successfully generate enough revenue?
         1. A: There was no revenue-generation plan for the central district project other than student housing. The suites and food/beverage options in the stadium are forecast to actually generate revenue. KU is indeed the “backstop” for the project in order to get competitive interest rates on borrowing, but Jeff has planned for 2x financial coverage of the project from Athletics. The likelihood of KU having to pay off the project is incredibly low.
      3. Q: What is the conference space capacity that we are aiming for? How are we competing with Kansas City conference spaces?
         1. A: Probably around a 500-person conference given our geographical location. KU had a feasibility study done recently to help determine this. It wouldn’t be untenable to host a 1,000 to 3,000-person conference if you combined all our local event spaces (KS Union, Burge Union, Lawrence locations). There are certain conferences and entertainment opportunities that we will inevitably lose to KC spaces, but we can capture those more intermediate options.
      4. Q: Revenue generation also leads to increased operational costs. Do you have any data to predict how this revenue increase will compare to the new operational costs? Does the planned 365-day feature only include events, or would this be a space open to the KU community in general? Do we have more details about the revenue increase distribution, e.g., is it mostly ticket prices, food/drink, etc.?
         1. A: We have had a company generate some of these numbers for us, which are benchmarked across recent similar building projects. We’re not sure who is going to be operating the space for non-athletic events, but there will be a third-party operator. It will be open to the entire KU and Lawrence communities so that it can be an asset to KU.
      5. Q: University Senate President Kristin Villa had spoken with Provost Bichelmeyer regarding ownership of the project debt, and the response we received was that the Lawrence campus will not own any of this debt. Can we confirm this?
         1. A: The updated program for the project, as well as the authorization of Athletics as the bond-issuer, will be addressed at the November KBOR meeting. It will be Athletic debt by pledge of the incremental revenue of the stadium. The university itself will likely need to be the backstop to be competitive at the market, but it is being structured so that there is so much coverage and capacity to pay for itself that the need for a backstop is an extreme unlikelihood.
      6. Q: Is the CFO Office open to further collaboration on the Gateway Project, including the creation of a broad planning committee (Specific Charge #2a)? Can we bring in faculty experts on relevant issues?
         1. A: Jeff is happy to talk about any issue that the P&R Committee wants to discuss. For the planning committee and other communication elements of the Gateway Project, the committee should talk to Karla Leeper, as that is what she works on. He said he’s also happy to hear from faculty experts.
      7. Q: What other debts are currently being held by KU Athletics and what are the exit strategies for a potential worst-case scenario?
         1. A: KU Athletics holds debt for the practice facility adjacent to the stadium, which will likely be refinanced with this project.
4. Next steps and meetings
   1. Jeff will plan on attending future monthly meetings of the P&R Committee.
   2. The next committee meeting will be in October. Since the forum will be in early November, it makes more sense for Jeff to attend following that. In the meantime, Jason Hornberger can also provide updates to the committee and to the CFO Office.