Update on the new arena
The $100 million pledge by Phil and Penny Knight has a timeline, reported by the Oregonian Saturday and the RG today. The agreement of the Knights’ gift says none of the $100 million may be used for construction purposes and it expires on June 1. So unless the Legislature approves the $200 million in bonds for construction of the new arena by Feb. 29, when the current emergency session ends, the athletic department will not get the $100 for the Legacy Fund.
“We’ve said from the beginning, to people who’ve asked about it, that (the Knights’) pledge is contingent on us being able to move forward on the arena project,” said Allan Price, the UO’s vice president for advancement, when contacted Saturday. “But we haven’t made a big deal about it.”
[…]
“Clearly, we’ve said that the arena project is the highest priority for the athletic department,” Price added. “And if we can’t move forward on it, why give that money to the Legacy Fund?”
And if the Legislature doesn’t approve the bond request? Then it looks like that would be a deal-breaker on the Knights’ donation, Price said
Dastardly too.
posting comments under someone elses name, especially a writer for this blog, is pathetic.
ted: I have no fucking idea what that is about.
I’m always happy when Ms. Stiff swings by.
delancie, what the hell was that about?
Ducktalk: the problem obviously isn’t that Knight “only” gave $50 mil after deductions, it’s the public funding scheme that’s fishy. Then again, the state Legislative Fiscal Office has ok’d the bond measure already… in my experience, as soon as one entity approves a measure to spend public money, the subsequent approvals tend to go very smoothly. The legislature and OUS board now have a free pass for a big, expensive legacy project for their resumes.
Building a sports arena with public money is wrongheaded and morally questionable to begin with. To do so in a state with a lagging economy and somewhat high taxes already is straight evil. Let them build it with their own money if they want it so damn bad.
At what point are the academic pundits going to cut back on the kesey koolaide. Funny how I never hear anyone balk, or even mention, the numerous donations he has given to universities on the academic side. Keeping the numbers round, let’s say about $200M. That would be the UO library, UO Law School and Stanford Business School to name a few. I bet those were underhanded as well. Geez, and now he has the gall to boast a $100M gift and it’s really only costing him $50M! I knew I couldn’t trust a Stanford alum.
And yes, I’m an Oregon alum, I just prefer microbeer.
The back story is tax arbitrage. Here’s the math. Knight gives $100 million. After tax deductions, this costs him $50 million. His $100 is invested in the market, earns the standard 8%. Oregon sells $200 million in bonds, which only pay 4%, because they are tax-free. So $100 million pays of $200 million in debt. Net, the project costs Knight $50 million and taxpayers $150 million. It’s “the gift that keeps on taking.”
Is this legal? We’re going to find out. If it’s not, UO will have to make up the difference by cutting spending on academics.
It’s not nice to try and fool Ms. Stiff.
http://www.irs.gov/irs/article/0,,id=98192,00.html
Kind of sounds like blackmail to me.
Hopefully, the legislature will not look a gift horse in the mouth. Donations of this size and magnitude are few and far between in the state of Oregon. The reality is that the stadium must be built in the near future regardless. That being said, let’s utilize the generosity of the private sector on this one while it is available.