By Steve Yanda
Washington Post Staff Writer
Friday, September 11, 2009
On Saturday, Byrd Stadium will host its first football game since the completion of a $50.8 million expansion project that created 64 luxury suites and 440 mezzanine seats in Tyser Tower, on the stadium's south rim. The enhancement plan, initiated four years ago, set out to create revenue-generating amenities and refurbish a facility in its sixth decade of existence.
But the original vision for that plan will not be fully realized when Maryland takes the field against James Madison. For a number of reasons, the central of which was a recessed economy, school officials were able to secure long-term commitments for only two-thirds of the luxury suites and mezzanine seats.
Initial sales on the stadium's new premium seating options will not spawn the revenue Maryland once anticipated, though school officials insist the renovated Tyser Tower will produce enough funds to pay off the project's annual debt requirement: $2.4 million annually over the next 20 years.
"When we structured the financial plan for this, the original idea was that the suite rentals were paying the debt service annually on the facility, along with the money we got from the naming rights to the field, and that what would be gravy would be all the sales of the mezzanine seats," Maryland Athletic Director Debbie Yow said. "But the way it is now because of the recession, it's really a good thing that we built out the mezzanine seats because now those funds, instead of coming back as extra money, as gravy, will now be used to make the debt service payments so we stay whole."
Long-term leases have been signed on 41 suites, according to Brian Ullmann, Maryland's senior associate athletic director for external operations. That tally falls seven short of the number needed to pay off the annual debt requirement.
Three lease agreements were signed by groups connected to the school, according to documents obtained via a Freedom of Information Act request. The School of Public Health and the College of Chemical and Life Sciences signed separate contracts and partnered to share a luxury suite. The University System of Maryland Foundation also is leasing a suite.
"The colleges are their own entities with their own budgets and their own fundraising, and those colleges wanted to use the suites for cultivation and stewardship of their donors and their supporters of that college," Ullmann said. "They bought a suite for the same reason that Under Armour wanted a suite. They wanted to entertain people and do those types of friend and fundraising types of activities in the suite."
Ullmann said the university has sold 357 of the stadium's 539 total mezzanine seats, which are situated below the luxury suites and offer heated and covered seating, plus food service.
Chevy Chase Bank agreed to a $20 million field naming rights deal in August 2006. Maryland announced Tuesday that Capital One, a credit card company that acquired Chevy Chase Bank in December, will assume the field naming rights.
The impetus to commence the Byrd Stadium renovations originated in part, Yow said, from the desire of Coach Ralph Friedgen to complete expansion plans that began with enhancements to the Gossett Team House, which sits at the east end of the field and serves as the football team's training and academic facility.
But Yow said she also heard from boosters who believed Maryland's football program should offer the premium amenities available at most other ACC stadiums. In 2005, Maryland, Wake Forest, Duke and North Carolina were the only ACC programs without luxury suites in their football stadiums.
While the demand for premium seating inside Byrd Stadium may have been high initially, a severe downturn in the economy quickly suffocated discretionary spending. "Not right now" became a common response to Maryland's efforts to sell the deluxe inventory, Ullmann said.
Wake Forest began offering luxury suites at BB&T Field in 2008. All 22 have been sold for this season. Georgia Tech has 69 luxury suites at Bobby Dodd Stadium, 62 of which have been sold for this season. Like Maryland, Georgia Tech is in a metropolitan area (Atlanta) with numerous professional sports entertainment options.
Yow said that in order to grab people's attention in a market so saturated with sporting-event options, a college football team must maintain a top-25 presence. Last year, the Terrapins finished 8-5. This season, they are 0-1 after suffering a 52-13 loss at California last Saturday.
The University of Michigan, situated just outside the Detroit metropolitan area in a state that was dealt one of the recession's harshest blows, has secured commitments for 70 percent of the 82 luxury suites it will unveil at Michigan Stadium in 2010 as part of a $226 million renovation project. The Wolverines tallied a school-record nine losses last season.
Several Maryland athletics donors who elected not to purchase mezzanine seats or lease suites confirmed that economic restraint brought on by the recession was one reason they rebuffed the school's sales pitches. But they noted Maryland's initial ban on alcohol in the suites as a contributing factor, as well.
Bob Smith, a 1963 Maryland graduate, explored purchasing a long-term suite lease in February. Smith, a former vice president of two Fortune 500 companies who cashed out in the late 1980s and now owns small commercial properties, originally wanted to join with three other Maryland boosters to rent a suite. When that plan dissolved, he considered splitting a suite rental two ways with a booster from Salisbury.
But nothing concrete materialized from his discussions. The flailing economy, Smith acknowledged, made people, including himself, cautious to spend discretionary funds. A few vacancies exist in the Frederick shopping center he owns.
"Part of it also was that, you know, I like to have a glass of wine, but I'm not a serious drinker," Smith said. "Plus, we're mature people. We know how to drink responsibly. They should have made the alcohol provisions earlier on."
Last year, the athletic department submitted a proposal to the university's Athletic Council that would allow limited alcohol sales in the luxury suites, according to Charles Wellford, the school's faculty-athletics representative.
Wellford, who chairs the Athletic Council, said the athletic department's struggle to sell the new luxury suites was put forward as one reason why the council should consider the proposal, but "we were more guided by practices on our campus and by what had happened at other ACC schools."
Of the nine other ACC schools that offer luxury suites at their football stadiums, eight allow those who lease suites either to stock their suites with unlimited amounts of alcohol prior to game days or purchase unlimited amounts of alcohol from the stadium catering service during games. Boston College, a private institution, declined a request to provide information about the luxury suites offered at Alumni Stadium.
After the Maryland Athletic Council recommended a revised alcohol policy for the Byrd Stadium suites to University President C.D. Mote Jr., a revision was passed that allowed the sale of up to 96 beers per a 24-person suite. Alcohol is not sold anywhere else in the stadium. Thirteen long-term suite leases have been signed since the alcohol provision was approved.
"We felt that we would have enough people to buy suites regardless of whether we had alcohol or not," Ullmann said. "We thought the demand would be greater with alcohol, but we felt pretty confident that we'd be able to sell the suites. . . . We were very, very fortunate and grateful that it was able to be worked out for us."
Maryland has made several other adjustments in recent months in attempts to make suites, as well as season tickets, more financially appealing to its fan base.
Originally, Maryland offered three-, five- and seven-year suite leases. Over the summer, the school began offering annual leases and then single-game leases. Ullmann said seven single-game leases have been signed.
The school also recently began selling mezzanine seats at single-game rates. They initially were sold as season-long commitments.
Ullmann said approximately 100 single-game mezzanine seats have been purchased.
Last month, with season ticket sales lagging behind last year's pace, Maryland began offering three-game packages and 900 were sold, according to Ullmann. Maryland has sold 25,766 season tickets, a 7.6 percent decrease from this time last year, when 27,915 season tickets were sold.
Maryland officials remain optimistic that the new luxury suites and mezzanine seats eventually will sell out. Until then, sales of the latter will be relied upon to pay off the debt requirement that sales of the former were supposed to satisfy.
Heery International architect Tim Hudgins, project manager for the Tyser Tower renovations, said his firm furnished conceptual drawings in fall 2006 for future Byrd Stadium enhancements, such as an upper deck wrapped around the west end zone and field-lowering options. Hudgins noted the drawings were constructed merely as a favor to the Maryland athletics department "so they could visualize what it could look like."
According to Yow, no immediate plans for further stadium advancement exist.
Without the aid of mezzanine seat sales, the possibility of such plans might not exist, either.
"Nothing would impact a future project," Yow said, "except for the inability to pay for a current one."