Next week could be important for the future of Georgia Tech athletics.
At that time, the Georgia Tech Athletics Association plans to sell an approximately $90-million, 30-year bond that will fund the construction of the Hank McCamish Pavilion, the John and Mary Brock Indoor Practice Facility, and possibly the new indoor tennis facility.If the bond is issued, the GTAA’s projected debt will increase to approximately $190 million and will give Tech an annual debt service of as much as $13.7 million by 2014. The GTAA’s current annual debt is $7.2 million.
“It will set our financial course for the next 30 years,” according to Frank Hardymon, an associate athletics director who has been planning and modeling this bond for the past 1 1/2 years.
However, if the bond rates are projected to be high next week, the GTAA may decide to delay the issuance. That scenario has occurred once already. The bond was going to be issued in November, but rates had increased dramatically and the issuance was shelved to allow for analysis of other options. Hardymon said the GTAA can wait until as long as March to issue the bond because construction on the basketball facility wouldn’t begin until April. However, interest rates have been steadily rising over the past few months. Any further delays in issuing the bond could impact the start of construction, which would increase those costs.
The Fulton County Development Authority is issuing the bond on the GTAA’s behalf and it will go out on the municipal market.
The issuance of next week’s bond would cover the cost of the renovations to the basketball arena, which is approximately $47 million, the football facility ($9 million), possibly the tennis center ($9 million) and $20 million toward a bond issued in 2008. There are other costs associated with issuance and interest payments that the remaining balance of the bond would help fund.
Hardymon said the GTAA has approximately $35 million in unrestricted donations whose projected earnings can be used toward paying a portion of the annual debt. They are also counting on the extra revenue that the ACC’s new contract with ESPN will provide to each school.