Plans for a new University of Texas arena could take a major step forward Thursday, when the Board of Regents conducts a key vote on the project.
Texas has been eyeing a replacement for the Frank Erwin Center, and a plan has surfaced that could lead to a new arena by the 2021-22 basketball season. As part of Thursday’s vote, the Board of Regents will decide whether to turn over 6.64 acres near Mike A. Myers Stadium to Oak View Group. The firm, as part of a lease with the university, would then build a new arena that seats 10,000 for basketball but could be expanded to upwards of 17,000 for larger events.
The new arena would be owned by the university, but Oak View Group will construct and manage the $300 million facility. The firm would cover the majority of the cost, and see a return on investment by keeping annual revenue for the first 10 years. Following that 10-year period, Texas will receive part of the annual revenue. More from the Austin-American Statesman:
According to a source with firsthand knowledge of the agreement, UT will turn the 6.64 acres just south of Mike A. Myers Stadium over to Oak View Group in a lease arrangement. OVG will build and manage the arena, giving UT approximately 60 dates annually for men’s and women’s basketball games, graduations and other school-related functions.
Upon completion, the university will own the building. However, OVG will recoup its investment by keeping the revenue generated, including things such as concessions, for 10 years. After the first decade, Texas will get a portion of the annual revenue, according to the source.
At most, Texas will have to pay for some incidentals, possibly concerning traffic and utilities. But OVG — not Austin taxpayers or UT boosters — will shoulder the bulk of the cost.
“This is an innovative deal that will be good for the city and the university,” UT President Gregory L. Fenves told the American-Statesman. “UT is a strategic partner with our community, and I’m looking forward to discussing the details, subject to the regents’ approval, later this week.”
By building a new arena, Texas could move forward with the demolition of the Frank Erwin Center in the coming years, as the land on which the facility sits has been targeted for an eventual expansion of the UT Dell Medical School. Frank Erwin Center first opened in 1977. Should the concept of a new arena move forward, construction would begin next summer and wrap up by the start of the 2021-22 basketball season.
Image courtesy University of Texas.