Investigation reveals lack of state oversight in stadium project
Who’s in charge?
That’s the million dollar question hanging over construction of a new upper deck on the west side of the University’s fabled Tiger Stadium.
The question is raised because of the unusual nature of the project — the construction of public facilities on public land by a private athletic booster group that operates in a grey zone where no one seems to have ultimate responsibility for ensuring the public’s safety.
In a two-month investigation of the stadium project, The Reveille found that:
• The state Office of Facility Planning and Control has not yet reviewed or approved the plans that TAF submitted to them for the new west side desk of Tiger Stadium, even though construction on the facility by the Tiger Athletic Foundation began six months ago. Approval by that office is required for all projects built on state land.
• Even if TAF did have approval for its plans, the state takes a laissez-faire approach to reviewing projects done by private and public partnerships. The state does not actively seek out projectS to oversee and review, but only reviews plans that are sent to governments’ review offices by organizations doing the construction.
• State and parish government officials as well as local construction lawyers admit guidelines for letting private organizations build public buildings on public land are inadequate.
• The procedure TAF uses to decide who gets to construct the facilities it builds for LSU athletics invites suspicion. Since TAF is a private organization doing public business, it does not have to observe public bid or public disclosure laws. One local construction official said TAF effectively cherry-picks who can and can’t work on its projects, a process some liken to fraternities and sororities selectively choosing their members.
The upshot is that confusion is intermingled amid the cranes and demolition now taking place on the west side of Tiger Stadium. The most visible foundation in Louisiana has effectively privatized on state land more than $150 million in construction projects — and no one knows who, if anyone, is responsible for ensuring that the construction is bid fairly, built properly and inspected for the public’s safety.
“There’s going to have be some way to put some limits on [private organizations working for public entities],” says state Sen. John Hainkel of New Orleans. “The issue is guideline and control. If we’re going to build a stadium and rent it out to someone, that’s [the University’s business]. But it gets touchy when it’s quasi-public.”
But TAF’s Chief Executive Officer, Maj. Gen. Ron Richard, said TAF doesn’t need any more state supervision.
“This is as vanilla as it gets,” Richard said. “LSU has a lot of eyes looking at it, such as the Board of Supervisors… It’s required by law that we’re audited, but we want it that way, too.”
No one suggests that TAF has violated any laws. The issue is what laws apply and who is responsible for ensuring public safety when organizations are allowed to operate in an intersection of the public and private sectors.
And while it has allowed the University to quickly improve its athletic facilities, the question remains: who is keeping tabs on the most powerful non-profit group in Louisiana?
 
How TAF operates
TAF has come a long way from the days of the old Varsity Club booster group. It now boasts 14,000 members and its membership list looks like a Who’s Who of the rich and powerful in Louisiana.
It has floated more than $150 million in bonds on behalf of LSU athletics in order to build such projects as the east side upper deck of Tiger Stadium and now the west side deck. It’s about to build a new enclosure for Mike the Tiger, the university’s mascot, that will increase the space the 15-year-old Bengal tiger has to pace by more than 13,000 feet.
TAF can do all this because it owns 18,000 seats in Tiger Stadium. Those seats are sold at standard prices — $36 per ticket, plus a mandatory surcharge to TAF of a minimum $750 per ticket to get the right to buy them. Prices for rights to buy season tickets can get as high as $2,950 for the new west side Stadium Club suites, and TAF encourages members to contribute more by giving preferential seating to those with high “Priority Rankings.”
It operates behind two veils of secrecy — one, the veil that all non-profit private organizations enjoy, the other one gained through special legislation pushed through by the administration of former Gov. Edwin Edwards.
Letting TAF handle athletic building construction on campus clearly has benefited the university and LSU athletics. For one, LSU athletics no longer has to compete with academic needs — or with other state universities or state agencies — for scarce dollars from the capital outlay budget. It also gets to skip the state legislature and legislative hearings on the merits and demerits of its proposal. TAF self-finances its projects with bonds issued through the state bond commission and backed by banks. It pays off those bonds by collecting revenue from the sale of tickets to athletic events from seats in Tiger Stadium that it builds. Instead of waiting for years in the queue of projects needing state funding, LSU athletic construction effectively is moved to the head of the line.
TAF also can cut construction time significantly. It may be building state facilities on state property, but it still is a private organization. As such, it does not have to obey the state bid laws, the state public records act or any other legislation the state normally requires of state projects.
TAF can do this because of a provision of law that was enacted to let fraternities and sororities build houses on land owned by the university. This statute, 17:33:61, allows the University to lease land to fraternities and sororities, religious groups, military organizations, or, in TAF’s case, a private entity dedicated to boosting athletics.
The law, commonly known as the fraternity-sorority statute, states that any college or university can lease land to a private entity, “provided such private entity shall be obligated under the terms of the lease agreement to construct improvements on the leased premises which will further the educational, scientific, research, or public service functions of the board” and that the private organization conduct a “competitive bid or competitive bid process.”
TAF has competitive bids, but only hand-picked contractors are allowed to compete.
“We don’t put the bids out to people we don’t want to get the jobs,” Richard said. “If you’re on the list, then that means your work is superb.”
After choosing a general contractor, TAF promises to build the requested facilities which it will later put in LSU’s ownership after all the construction bills are paid. For the west side addition, this will happen in 30 years when TAF makes its final payments on the $90 million bond taken out for the project.
Until then, TAF owns the west upper deck along with the expansion’s seats. It will pay off the bonds from the proceeds of the 18,000 seats it controls in Tiger Stadium and from rent on the skyboxes it has constructed in the two new upper decks. It also will receive $2.5 million each season from LSU to lease seats in the upper deck that TAF will not control.
While appointing a private organization helps get around restricted laws, bidding and time, it could lead to unsupervised construction.
Local and state entities issue permits for projects and assign inspectors to oversee building projects. But if an entity does not contact the proper permit agency, the agency may not know it needs to supervise construction or a permit.
For the west side expansion, TAF is not required to get local permits because it is building on state land, and because it is a private entity, some have argued that it only needs University or local approval.
 
Too expensive? TAF can do it
There’s little doubt that TAF has aided LSU and its athletic department.
By stepping in with creative funding solutions to multi-million dollar projects, the Foundation has helped LSU afford luxuries that otherwise would come from the University’s own coffers or the state budget — or which wouldn’t receive funding at all. Along with raising the $60 million necessary to build the east side upper deck two seasons ago, TAF has also given about $3 million in student-athlete scholarships, renovated the new Cox Communications Center for Student Athletes, and has modernized athletic facilities ranging from the Pete Maravich Assembly Center to the tennis and volleyball complexes.
Athletics Director Skip Bertman said everything TAF does benefits the Athletic Department and the University.
Richard said the organization is sending a message of goodwill to the Baton Rouge community and the University because it secured financing without burdening the state.
“That means that the University does not have to withhold some monies that it would spend on academia scholarships that TAF and me, as CEO, personally sign for,” Richard said.
TAF helps the Athletic Department run its operations without University or student money. The Athletic Department is not even included in the University’s budget, something that makes Bertman and the department very proud.
Richard said TAF’s goal is to turn contributions into support of the University in general and LSU athletics specifically.
“A portion is for student athletes, but that thousand-seat auditorium and the equipment in there, that’s state of the art,” he said. “Computer rooms and computer labs are used by the student body in general. TAF paid for that. No student fees, no state money, all private contributions.”
Perhaps TAF’s proudest and most loyal commitment is to student athlete scholarships.
“It’s our goal to fund every scholarship for student athletes,” Richard said. “We’re not there yet, but we’re getting there.”
TAF also gives teaching scholarships for Provost Risa Palm and department deans to pass out to deserving professors, and it assists the chancellor in some of his endeavors from time to time, Richard said.
For example, TAF gave $50,000 to help supplement former Chancellor Mark Emmert’s pay raise in 2002 when Emmert was contemplating a job at the University of North Carolina.
And then there is Tiger Stadium, which began as a football stadium sold to the public as a dormitory by former Gov. Huey Long. As a result of TAF’s assistance, Tiger Stadium has been completely waterproofed and one upper deck expansion has been completed.
When finished next year, the more than 10,000-seat west side deck, along with its twin across the gridiron, will hulk over the 80-year-old stadium like massive shoulder pads, marking the culmination of a multi-year effort by the Athletic Department to bring LSU’s football facilities into the modern age of college sports. The new deck will push Tiger Stadium’s Saturday night capacity to more than 92,000, making it one of the country’s six largest on-campus stadiums.
In addition to the standard seating, TAF — just as it did with the east side deck a few years ago — is building a string of high-dollar luxury skyboxes, called “Stadium Club,” that will funnel an added $6 million into the Foundation’s pocketbook annually. TAF will use that money, along with ticket sales, surcharges for the right to buy seats and donations from Foundation members and private donors, to pay off the debt to bond holders. Once the now roughly $135 million debt is eliminated, TAF will essentially donate both decks — and their multi-million-dollar annual income stream — to the University.
That day remains decades away.
 
Moving ahead without approval
The use of a private group to fund and construct a public building on public land is good business for the University. After all, LSU is getting about $150 million in improvements to its athletic facilities without investing a dime of its own. It is getting the improvements now, when it needs them, without having to wait in line.
The downside? Mixing public and private cooperatives has led to confusion of who regulates and oversees private projects built on public land.
Every project built on state land is required to obtain a building permit from the State Office of Facility Planning and Control and review by the State Fire Marshal. These regulations ensure that all construction plans comply with state codes and that the structures will not fall down in later years because of substandard construction practices.
In the case of TAF’s construction of the west side upper deck, the permit and inspection standards exist to ensure that thousands of Tiger fans can safely enjoy games.
As of Nov. 30, Facility Planning and Control has not approved the west side expansion project. TAF has never received a permit from that office for permission to build the stadium, although construction started in August 2004.
Bill Morrison, assistant director of Facility Planning and Control, said part of the problem was that his office has a backlog of documents.
“We’re running behind on that,” Morrison said. “[TAF] just went ahead without us.”
For any state project to start construction, Morrison said it has to get a permit and approval from Facility Planning and Control. If any company or organization does not get the proper approvals, it technically does not have permission to build.
For private-run construction on state land, the private organization still needs to submit plans for review, but Morrison said Facility Planning and Control will not send anyone to oversee construction. Facility Planning and Control trusts the architect to take care of that.
To date, TAF has made significant progress on four elevator banks and demolition of the existing west side upper deck without any government supervision.
Since the project is being built on state land, the City of Baton Rouge has no jurisdiction to check to see if the project is up to code standards.
Pete Newkirk, assistant director of Baton Rouge Department of Public Works, said subcontractors usually need to get local parish permits to operate within a designated parish. Since the stadium expansion is considered a state project, he said those permits are not required from his office.
Morrison said that for projects done by a public body, state Facility Planning and Control normally will send inspectors to frequently oversee construction on state projects. He said Facility Planning and Control has not reviewed TAF’s structural plans, has not given official approval and has not sent any inspectors to monitor any stadium construction.
DPW’s Newkirk said he believed the TAF project, although owned by a private organization, would have to follow the same rules as public groups.
“Since it’s on state property, they may have considered that a state project, and in that case, 100 percent, it would be the state’s responsibility to do the inspections,” Newkirk said.
State Fire Marshal Chief Architect Don Zeringue said TAF has received approval from the State Fire Marshal’s office and that the office probably will inspect the completion of the west side addition for fire safety regulations.
Wanita Pepper, State Fire Marshal administrative services assistant, searched the database of inspections and reviews and found nothing relating to TAF and the west side expansion.
Documents from the State Fire Marshal’s office showed that TAF did submit requests to have the construction reviewed at completion, which the office has signed. Pepper said the Fire Mashal’s office is responsible for final inspections rather than continual oversight.
Richard told The Reveille that TAF got approval from LSU Facility Services to begin the west side expansion. He argued that the LSU office was similar to a state regulatory office.
“What is LSU? Is that a state body?” he said. “LSU acts on behalf of the state of Louisiana. It’s a state university.”
Director of LSU Facility Services Emmett David said, however, that his office has no regulatory control. He said LSU Facility Services examined building documents only to make sure TAF’s plans and design match the University’s goals for the project.
“I am not an official code review agent,” David said. “That is the responsibility of the State Fire Marshal and State Facility Planning and Control.”
Ken Naquin, Associated General Contractors of Louisiana executive director, said the city parish or Department of Public Works could shut the project down if TAF does not have a permit. However, Morrison said shutting down the project, which currently is running 24 hours a day in order to be ready for next football season, would be a remote possibility.
Click here for Part II!