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USC Arena Plans Take Baby Steps

College basketball: Although fund-raising continues, administrators express interest in project.

April 03, 2002|DAVID WHARTON | TIMES STAFF WRITER

Over the last few months, USC administrators have quietly talked to architects about resuming work on a long-awaited arena at the edge of campus.

The discussions with HNTB, a Kansas City firm, have hardly been urgent but represent the first outward sign of progress in more than a year. Joe Diesko, an HNTB vice president, said, "I get the sense they are getting closer."

The question is, with yet another college basketball season having come and gone, how much closer?

On one hand, cautious administrators say they are "doing very well" with fund-raising and hope to make an announcement "before long."

On the other hand, the proposed 12,000-seat venue still lacks a naming-rights sponsor, a private or corporate donor to pay much of the $70 million in construction costs. Worse, the university had to turn away at least one corporation willing to fill that void.

The dollars were right but the terms were wrong. And therein lies the challenge.

Administrators have often said construction cannot begin until all the money is in hand. That is not entirely accurate but it's close.

In accordance with a campuswide dictum, the athletic department must settle its bills within 11 quarters of receiving final approval from the board of trustees.

That time frame--roughly the span from design to occupancy--represents a tough fit in a marketplace where many naming deals are spread over 15 years or longer. According to sources, the athletic department had to reject a sizable offer from a corporation that wanted to pay over 20 years.

Associate athletic director Carol Dougherty, while declining to talk specifics, explained: "We need to have our agreement front-loaded."

USC President Steven Sample, who did not comment for this story, has reportedly been adamant about the pay-off period because the university is undertaking other costly projects and because the arena--unlike a new academic building--cannot generate revenue from tuition or research.

"That's what the athletic department and the president agreed on," said Dennis Dougherty, senior vice president for administration and Carol's husband. "The athletic department budget can't handle debt service."

The project has a history of fits and starts dating 30 years. USC coaches are known to crack jokes about it and former Trojan player Paul Westphal, now the coach at Pepperdine, recalled being shown architectural plans when he was a high school recruit in 1967.

So there was understandable skepticism in 1999 when Sample and Athletic Director Mike Garrett announced plans to renew the effort.

"Is this a great day for USC or what?" Sample said.

Fans could only hope it was a watershed moment.

Sketches provided by HNTB depicted a domed arena beside the Harbor Freeway, built in the red-brick and stone motif of the adjacent campus.

It was going to be large enough to accommodate a regional round of the NCAA men's basketball tournament. It would be a place for the arts and community events as well as sports.

The athletic department, which agreed to raise all the money, would control the facility. Administrators rejected financial help from an outside group that wanted to act as partner and manager.

But raising the money proved difficult and, as time passed, the estimated cost rose from $50 million to $100 million. With Sample setting a $70-million limit, the athletic department made cost-cutting changes to the initial design and decided to leave several features for addition later.

Much of the money has now been raised--administrators will not confirm how much--but the site at Jefferson Boulevard and Figueroa Street remains untouched. Not so much as a sign will be placed there until all the money is available.

According to a prominent executive in the naming-rights business, the university faces an uphill battle.

"Most corporate partners don't want to see themselves as the source of funding ... they want to know you're going to build regardless," said Jeff Knapple, president of Envision, a Los Angeles marketing firm that negotiated the deals for Staples Center and Philips Arena in Atlanta.

"Not to say it can't work other ways," he said. "The task is more challenging the way they are doing it."

Knapple is familiar with the USC project because he made a bid to represent it four years ago. The university chose sports-marketing giant IMG, then returned to Knapple last year, only to find he was occupied with other clients in Southern California. After contracting with a third firm for nine months, administrators have decided to handle negotiations themselves.

Carol Dougherty said the athletic department has been in contact with several interested corporations and private donors. There has also been preliminary talk of seeking a donor to put his or her name on Heritage Hall, the university's athletic headquarters.

In the meantime, the university has been working with the Community Redevelopment Agency in preparation for acquiring permits and recently showed site plans to City Councilwoman Jane Perry, who considers the project a potentially attractive addition to the Figueroa Corridor. Thus the recent talks with HNTB, which had been awaiting word since preparing rough architectural diagrams more than a year ago. The parties are working on contract details, seen as a minor step but a step forward nonetheless.

"They called and said they wanted to start doing this," Diesko said. "We're very excited."

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