Penn State trustees approve $700M renovation of Beaver Stadium

Penn State University trustees approved a $700 million renovation to Beaver Stadium on Tuesday after a sometimes heated debate about the athletic and economic benefits versus financial risks.

The 26-to-2 vote during a special meeting followed a 90-minute presentation and discussion. There were three abstentions. Earlier Tuesday, the project passed the trustees finance committee.

Comments among the board members ranged from strong support to others who had unresolved questions and wanted to delay the vote until July 8 or potentially scale back the project.

“Why are we rushing?” asked trustee Alvin F. de Levie.

He said the board could have made a decision in July without adversely impacting the project and its financing.

But a resolution to delay the vote failed 26 to 4.

Board Chairman Matt Schuyler said there had been ample time to deliberate in executive session, even before Tuesday’s public meeting. He opposed the motion to delay voting and tried move public discussion along more quickly.

In a joint interview Tuesday with TribLive, Penn State vice presidents for finance and athletics defended the project, calling it both necessary to match current stadium expectations within Division 1-A football, and an economic boon to the university and Centre County region.

Asked if it was a good look to expend $700 million for a stadium upgrade when universities including Penn State are facing operating deficits and academic cuts, Sara Thorndike, senior vice president for finance and business and treasurer, called it the most prudent option for a venue that holds nearly 107,000 fans and has stood at its current site since 1960.

A new Beaver Stadium would cost more than $2 billion, she said, and would generate more long-term debt than new revenue. Even a minimal upgrade producing no expanded revenue would still cost $200 million.

“We feel this is the most financially viable option and the right price point,” she said.

Thorndike said Penn State anticipates it “will borrow up to the whole $700 million – and we will already have taken out the first $70 million last year – and will borrow the rest as needed over the next three years.”

She said the bond debt could be spread over 30 years, but might well be paid off faster.

‘It’s a Penn State project’

Patrick Kraft, vice president for intercollegiate athletics, said the university anticipates it will need $134 million in fundraising, has had conversations with high-level donors but needs an approved project to fundraise in earnest.

Thorndike laid out an array of new revenue that should offset project costs.

“Naming rights are part of it. We’re going to generate quite a bit of new incremental revenues from tickets … from the new premium seating,” she said. “We’ll also have increased revenues within the athletics budget. From conference revenues, multimedia rights, those pieces of product.”

She reiterated Penn State’s contention that it will be “100% funded by athletics, no tuition, no educational funds used at all.”

Kraft called it larger than just an athletics expenditure.

“It’s not just a football project. It’s a Penn State project. There will be a welcome center, which is critical for our admissions folks to welcome prospective students on campus,” Kraft said. “There’ll be an opportunity for an enormous event space for people to use. It’ll be ideally busy 365 days a year. It’s going to be fans and alums and, you know, (a space) for weddings.

“We’re looking at this as a 365-day project and making sure that Beaver Stadium is around and able to do these things for the Penn State community.”

Kraft said surveys conducted by the university suggest fans want the added amenities.

“I think it’s important to give them an experience that matches where present-day stadiums are,” he said.

Penn State President Neeli Bendapudi spoke of the stadium’s unmatched setting, praised project planners’ effort and said the time to act is now.

Not everyone is a fan

Nevertheless, the project in its current form has drawn criticism from at least some board members.

Alumni-elected trustee Anthony Lubrano said an independent outside expert should examine the project and its financial viability. He said a public-private partnership ought to be considered.

“Given the uncertain climate surrounding college athletics today, I believe Penn State should postpone this undertaking for the time being,” Lubrano told TribLive before the meeting. “Follow the example of the University of Nebraska, who just announced last week that they were scaling back their $450 million renovation until the landscape was clearer.

“We can do the requisite maintenance work and weatherizing of Beaver Stadium in the interim. That won’t cost $700 million,” he said.

Views during the public discussion itself varied sharply.

Trustee Lynn Dietrich, among the plan’s supporters, called the current stadium “an embarrassment,” a weathered structure in need of immediate work.

Ali Krieger, an alumni-elected trustee and professional soccer player, pointed to the importance of facilities to athletes and said a renovated Beaver Stadium could become a future venue for Women’s World Cup Soccer and English Premier League soccer contests.

“It could be an amazing venue,” she said.

Still, others echoed cost concerns given the $250 million in long-term debt already facing Penn State athletics, as well as a university operating deficit that has led Penn State to pare campus programs.

“Can we really afford the additional debt service?” asked trustee Kelley Lynch, who is the immediate past president of the Penn State Alumni Association.

Trustee Nicholas Rowland, a sociology professor at Penn State Altoona, said program and faculty reductions, in particular those facing Penn State branches, made the project more difficult to square. He asked how can “my peers worry about their jobs, and somehow $700 million is sensible?”

Those comments followed those by another trustee, Barry Fanchek, who put his objections to the current project on his website.

In a statement titled, “Why we can’t afford the Beaver Stadium renovation proposed by Penn State Board of Trustee leadership,” the alumni-elected board member who is an investment adviser in State College lays out his arguments.

Penn State does not have the cash, the philanthropic support or revenue to sustain what would be the biggest capital project ever in Penn State athletics and one of the largest in university history, Fenchak said in his post.

For one thing, he said, the athletics department already is $250 million in debt that is financed by the university and backed by tuition revenue. He said the project could more than triple that debt.

“One of my important duties as a trustee is to reject proposals that would place the University in unsustainable financial situations, including project proposals from the Department of Intercollegiate Athletics (ICA),” he wrote.

Bendapudi first announced the plan to renovate rather than replace the stadium in February 2023. Multi-year work is expected to be finished before Penn State’s 2027 football season.