Where does construction stand today?
We are nearing completion of the second phase, and we are on track to meet our total project deadline of Jan. 1, 2014. Work is ongoing on the new seven-level pavilion, which ultimately will include 54 suites, 48 loge boxes and 1,180 club seats. For the first UCLA home game this fall, 26 suites and 262 club seats will be completed. In addition to finishing the pavilion, Phase Three will include additional concession stands, gate entry structures and restroom facilities.
How much is the city’s general fund contributing to the project cost?
Zero. The project is primarily funded with bonds ($126.1 million) backed by future revenues generated from the Rose Bowl. The balance comes from an assortment of fees and revenue streams that have nothing to do with the city’s general fund – for example, $6 million in Stadium revenues from the 2006 and 2010 BCS title games. Planned funding sources include a concessionaire advance and the Legacy Brick campaign. Likewise, any additional costs associated with the project will not use general-fund dollars. Among the anticipated funding opportunities identified so far are the 2014 BCS title game and additional Legacy fund-raising efforts.
Why are renovation costs increasing?
The Rose Bowl is truly a one-of-a-kind project involving a 90-year-old facility. As such, there have been a number of unforeseen expenses – damage to original steel that was hidden deep within the structure, for example. The project’s timing and its ambitious design/bid/build schedule have also been factors. In order to take advantage of the Build America Bonds (a stimulus program by the federal government) and the lower financing costs associated with them, we needed to complete the primary construction of the project within the program’s mandated three-year window. Costs were budgeted based on anticipated economic conditions. Instead we have faced increased material costs and higher-than-expected estimates for technology and electrical systems.
Why such an ambitious schedule, and how did that affect the construction methodology?
The three-year construction schedule was selected for a variety of reasons: To take advantage of lower pricing during a favorable construction environment; land lower interest rates through the Build America Bonds program; create a local economic stimulus project; and ensure that upgrades were completed prior to a new competing stadium being built in the region. We therefore opted for a multi-prime bid process, an increasingly common practice in which project elements are designed and bid out separately (other projects that have used multi-prime methodology recently includes Disneyland and Americana in Glendale). This meant bidding out segments of the project as their design was completed, resulting in the use of multiple general contractors rather than a single “GC.” It also allowed us to begin initial construction in January 2011, before the full project design was fully complete, and provided flexibility to defer project components should that become necessary due to budget constraints.
Who is responsible for managing the construction project?
Following an RFQ in 2010, a joint venture of two general contractors—Bernards/Barton Malow (BBM)—was awarded a project management contract to coordinate and manage the construction project. As an example of the joint venture partners relevant experience, Barton Malow was the general contractor for the University of Michigan Stadium, and Bernards has extensive experience as the GC in large construction projects for Disney .
What is the bottom-line impact of those increased costs?
As of late June, the overall funding gap stood at $35.2 million. Anticipated revenue opportunities – the 2014 BCS title game and additional Legacy campaign fund-raising, for instance – have reduced that figure to $22.8 million. Rose Bowl officials are discussing several options with the City Council and the stadium’s tenants – the Tournament of Roses and UCLA. Those options include changing to project’s cope, deferring elements to be completed during a fourth year of construction, or finding additional revenue through refinancing or a bridge loan from the city. A decision is expected by the end of July.
Will these additional expenses affect my taxes? Will city services be impacted?
Because the project does not require direct general fund financing, there is no cost in terms of additional taxes or impact on city services. We do anticipate that the overall project will increase the economic viability of the stadium for generations to come, and continue to contribute favorably to the city’s well being and tax base.
How many of these dollars are being spent locally?
As of late May, a total of 121 Pasadena residents had worked on the project. Pasadena First Buy Local reports that certified wages of $609,798 have been paid to these workers, representing 6.3 percent of the project’s total construction-certified payroll. PFBL also reports that project contractors spent $7.3 million in local subcontracting and procurement, while the Rose Bowl Operating Company projects another $4.7 million in local project soft cost expenditures, bringing the local projected local procurement total to $12 million.
What is Rose Bowl Legacy?
A group of community leaders have established a non-profit organization in order to raise funds to support the project. This is very unique for a publicly owned facility, as it is usually seen at universities, hospitals and churches. To date, $8 million has been pledged to Legacy toward their goal of $20 million for this project. In the near future, more information will become available on how the public can contribute and become affixed to the Rose Bowl’s future.
How is the community benefiting from this project?
The Rose Bowl is a Pasadena icon and our most identifiable physical asset. From the start, our commitment has been to preserve the history and integrity of this treasured jewel, while allowing it to stand tall – and remain relevant – for generations to come. We’re accomplishing that. More directly, the $12 million in local procurement and more than $600,000 in local wages so far are boosting our economy and creating new opportunities for businesses and workers during these economically challenging times.
Why does the Rose Bowl need to take out a loan to complete the project?
There will be a request to the RBOC and City Council to authorize a bridge loan, as it’s needed for two reasons: 1) timing – as $17 million of revenue will not be received in time that it is needed to in order to pay contractors. For example, there is a $10/ticket surcharge for the Rose Bowl Game that is for two years. The funds have been received in 2012, however, in 2013 the game hasn’t been played yet, hence a bridge loan will be necessary, and 2) the project is estimated to cost more than the originally contemplated $152 million, and funding above that amount will be needed as Rose Bowl Legacy needs more time to complete its campaign goal of $20 million.