The $100 Million Misunderstanding

Buried in an otherwise turgid George Zofflinger op-ed in the Bergen Record is this zinger:

“‘The stadium expansion project is being financed entirely with borrowed funds. It was rushed into, with incomplete plans and a $30 million funding gap. We now find the costs are escalating, and we are forced to make significant cuts in the project.

Also, there is an increase in what we are borrowing, from $72 million to $100 million. New Jersey public entities are in a league of their own when it comes to piling on the debt.”

Read that again.

Someone should be kissing us because we certainly are getting screwed.

Because the drive for $30 million in private contributions failed and failed some more – either there is scant interest in Rutgers football or the fans there are are poor because, ring doorbells as Seatbelt Corzine did, he apparently raised no more than a few empty beer bottles.  The vast bulk of purported Rutgers fans shut their wallets tight and does not that say something about the depth of fan support? — Rutgers now is going to borrow the whole $100 million, pace Zoffinger.

That makes no accounting sense.  None whatsoever.

Fuzzy math was required to attempt to show that this stadium expansion would be self-funding on a $72 million note (with the other $30 million coming in the form of those private contributions that did not materialize).  You cannot increase the borrowing by 40% and still insist this stadium will pay for itself.

It will not.  NJ taxpayers and Rutgers students will be forced to pay for Mulcahy’s Folly — just as we have been saying for months.

This whole borrowing scheme is vividly reminiscent of the cockamamie loans (piggybacks) that have helped trigger the national mortgage-housing crisis — but at least now everybody should know this kind of scheme is doomed to fail.

It is time to pull the plug on Mulcahy’s Folly.  We do not need this $100 million extravagance and apparently very, very few genuinely want it.

We demand to see a financial statement/business plan that shows neither public monies nor student monies will be needed to pay for Mulcahy’s Folly.

Rutgers students: Demand a halt to the stadium expansion…or hold your silence when the next round of tuition increases is imposed as the university scrambles to pay for Mulcahy’s Folly.

Rutgers alums: Hold on to your contributions to Rutgers because no matter where you want your money to go it will probably wind up helping to pay for Mulcahy’s Folly…unless our voices are loud enough to stop Phase 2 before the school finalizes its commitment.

McCormick’s Learning Curve

It seems plain: Dick McCormick is a slow learner. Just as Rutgers now is mired in contretemps over the wanton waste of taxpayer dollars to fund lavish follies at bowl games – so exactly the same scenario played out at the University of Washington when McCormick was president. That triggered a state ethics investigation that prodded the university to spell out, in detail, who could swill from this particular pork barrel. Read the details in this Seattle Times story.

In that sorry case, the university even was forced to reimburse the state’s ethics board for the costs of the investigation.

Curiously enough, just as Rutgers has lost money on its bowl appearances, Washington managed to lose money on its 2000 Rose Bowl appearance: “The UW spent $1.45 million on the Rose Bowl trip, about $1.3 million of which was paid for by the Pacific-10 Conference, which invited the Huskies to the game,” according to the Seattle Times. Fancy that: money gets lost even on the biggest bowl appearances!

Those losses came because McCormick apparently invited his in-laws, many spouses, random politicos — and even picked up the tab for Disneyland visits. Talk about pirates of Puget Sound!

What is stopping Trenton? We need a full-on investigation of Rutgers’ wasteful and thoughtless expenditures in connection with all three money-losing bowl appearances — and we need an apology to the university’s students who will see classes canceled in the fall, classes that could have been held if the money hadn’t been squandered on football and bread and circuses for hangers-on.

And we need an apology to the state’s tax-payers who, ultimately, are picking up the tab for Mulcahy’s Folly. It’s time to halt this expensive and mindless pursuit of big-time sports. There just is no more public money to pour down that particular sinkhole.

Rutgers Fails Its Audit Exam

The Asbury Park Press editorializes vigorously against chronic, lax financial oversight at Rutgers. The editorial explicitly points to the $11,000 wasted on in-room movies and telephone calls enjoyed by guests of the football program at the Texas Bowl as a prime example of conspicuously stupid consumption.

But as become more evident, the McCormick administration honestly has no idea where Rutgers’ money goes. No idea whatsoever.  Read the Gannett reporting on the cavalcade of ignorant waste that characterizes Rutgers under McCormick.

How much shame does spending on football have to bring the university before somebody blows the whistle?

Joe Cryan, why aren’t you holding hearings on waste at Rutgers as it pursues Mulcahy’s Folly?

Stadium Funding: Impossible?

Read Class of 1955 Ed Schwartz’ piece in the Targum. It’s an interesting perspective on financing public projects such as the $100+ million Rutgers Stadium expansion (aka Mulcahy’s Folly). Says Schwartz: “I am just saying that raising this amount of money in the current environment is next to impossible. I did not say impossible. But it’s close!”

A key to the difficulties, per Schwartz, is how “polarized” the citizenry is. On the one side there are the frothing boosters. On the other side, there are New Jersey taxpayers who are mad as hell and not going to take it anymore, there are those who care for Rutgers academics, and there are the students and faculty who will take it on the chin as Rutgers keeps cutting more programs.

And of course there is the recession that is crippling New Jersey’s economy, just as soaring energy prices have every New Jersey family scrambling to balance personal budgets.

The economic turmoil makes fundraising for Mulcahy’s folly all that much harder, whilst, per Schwartz, the politically fraught environment repels potential donors and many political supporters.

Writes Schwartz: “The stadium project, from a fund-raising point of view, is the very worst-case scenario. Many alumni are against it, and very little – if any – money has been raised.”

Read his piece.

Then keep on keeping on.

There is plenty of time to stop the expensive Phase 2 of the stadium expansion and we continue to believe that is exactly what will happen.

Plenty of time for wise heads to prevail.

Plenty of time.

Lonely Being Luicci

Two days later and the Ledger’s Tom Luicci still is the only journalist reporting that Rutgers season ticketholders renewed at a staggering 99% rate, despite the recession, despite $4/gallon gasoline.

The only source cited in Luicci’s article was a self-interested Rutgers official (earning around $156,000, incidentally), whose pay comes because he is a flack for Mulcahy’s Folly. No external validation was offered. No corroboration. No proof of any kind. Just a flack’s word.

Do the Google News search yourself.

Note to the Scarlet Nation folks: the Feldman piece (ESPN) that turns up in the Google News search carefully attributes the 99% figure to Luicci. Journalists do that when they are hesitant about the facts. You folks wouldn’t know that because, well, you don’t know much that isn’t on your own myopic little message boards. The post that gleefully cites Feldman as disproving our point is in this thread. Sigh. We know there is no profit in arguing with message board posters but, sometimes, the impulse to educate carries us forward anyway.

But, we suppose, this post regarding Feldman stands as a prime exemplar of the Aronson thesis — where dissonance reduction is a life purpose for some. Good going! Do you think this was a witty for-instance of irony? A conscious attempt to win the Rutgers 1000 t-shirt?

OK, neither do we.

As for the bigger issue — the alleged 99% season ticket renewal rate — what there isn’t is new reporting confirming the 99% figure. The Home News, APP, Bergen Record, etc. are sitting on their hands. If the 99% figure is true, it’s an important story.

If.

What do other journalists smell that Tom didn’t?

“Ball Fumbled on Stadium”

Now the Asbury Park Press weighs in with a hard-hitting indictment of the thinking (rather the lack thereof) behind the stadium expansion. Read the editorial, entitled “Ball Fumbled on Stadium Expansion,” here.

The APP takes particular umbrage over something we have been harping on for months: “Rutgers shouldn’t have brought in a single backhoe until the private pledges were in hand,” says the editorial. The $30 million in private contributions is still missing.

And yet the construction — overseen by a contractor that just was fired from other public jobs — is rolling merrily forward, propelled it seems by a jock-sniffing Panglossian stupidity that has overwhelmed Old Queens.

The APP makes the second newspaper in as many days to editorialize against the reckless stadium expansion.

Watch for more voices to speak up against Mulcahy’s Folly.

Stadium Expansion Death Watch

Call this the official countdown to an acknowledgment by Old Queens that it does not have the money to pay for the $100+ million expansion of Rutgers stadium — in a time when the state of New Jersey is rushing into a deep recession, state parks are closing, and professors are getting fired.

Today the Home News & Tribune reported on the failure by Rutgers to make progress in raising the needed money.

The Record chimes in with this headline: No cash? No prob: Rutgers stadium expansion begins

Nationally, meantime, the economic downturn is causing numerous development projects to come to a halt. The Wall Street Journal documents this abrupt u-turn in construction here. Even projects that make sense are coming up short and getting shelved. And the Rutgers stadium expansion makes no sense; it clearly is on life support with the minutes ticking down.

Yesterday, this blog reported on the latest developments in the missing $30 million, that is, the failure by Rutgers and Gov. Corzine to raise the $30 million in private donations to pay for part of the expansion plan. And there is no word at all about the status of the $70+ million in bonds needed to pay for rest of the project, probably because Wall Street would laugh at that offering at this time.

What is staggering is that anybody in the school administration believes that adding some seats to a stadium is more important than doing something — anything — to shore up Rutgers’ plummeting academic reputation. As for New Jersey, the state is a national laughingstock for its pork barrel politics, so this stadium expansion is right out of the corrupt Trenton playbook. So what if Johnny can’t read — let him watch ESPN!

Keep reading this space. The obit for this foolhardy and reckless plan already is being drafted.