Texas Tech and its alumni association lost about $400,000 in 2011 from leasing Raider Park parking garage, while two other Tech-related organizations hesitant about the deal made a profit.
Tech’s University Parking Services took in the most profit, despite the fact the university did not request more parking spaces, according to an October 2011 interview with Heather Medley, marketing and training coordinator for University Parking Services.
“(The parking garage) was a university decision,” Medley said in October 2011. “It wasn’t a choice. We were just kind of told to do it. They wanted it for game days and other things.”
According to the April 2011 lease agreement between RaiderPark Limited Partnership and Tech, University Parking Services would receive the first $50,000 generated from student parking sold in the garage. However, in 2011, student parking revenues only totaled about $39,000, meaning University Parking Services received all the student parking revenue.
University Parking Services sold 375 out of 1,000 student parking spaces, as of Nov. 29, 2011, and spent less than $2,000 on marketing expenses, providing them with more than $37,000 in profit.
The Red Raider Club, the non-profit fundraising arm of Tech athletics, was the other entity which protested involvement in the Raider Park deal, President Terry Fuller said. The organization was entitled to 10 percent of game day profits for marketing and operational costs on game days, according to the lease.
Ten percent of game day sales amounted to about $14,000. The Red Raider Club spent $6,250 on marketing expenses, leaving it with a profit of some $8,000.
In the original 2010 lease agreement between Texas Tech Alumni Association and RaiderPark Limited Partnership, the Red Raider Club was not involved. It was only when Tech renegotiated the lease in April 2011 that the Red Raider Club was asked to market and sell game day parking spaces.
On Oct. 10, 2011, Tech and RaiderPark Limited Partnership agreed to amend the renegotiated lease agreement by paying the rent shortfall in two installments instead of one. The rent shortfall equals the $750,000 annual lease payment less parking revenues. The Daily Toreador has not received an explanation as to why $750,000 was agreed upon as the annual rent.
The Daily Toreador published its first article regarding Raider Park on Oct. 26, 2011. The Daily Toreador was not made aware of the October amendment until last week.
Russell Thomasson, the chancellor’s chief of staff, said this amendment was made at the request of Clayton Isom, the principal representative for RaiderPark Limited Partnership.
“Clayton wanted two payments the first year, because he told his bank there would be two, so he asked us to make an exception this year,” Thomasson said.
American State Bank loaned RaiderPark Limited Partnership $18 million to build the garage, according to Lubbock County deed records, also posted on The Daily Toreador’s website. American State Bank was named in the October lease amendment as a joint payee of the October payment from Tech and the alumni association.
Tech and the alumni association paid $440,000 in rent shortfall in 2010, as previously reported by The Daily Toreador. Thus, Tech and the alumni association’s rent shortfall payments to date are about $427,000 each.
Tech’s total rent shortfall payments are capped at $675,000, according to the lease, in which Isom guaranteed any losses to Tech would be repaid. No such guarantee was given to the alumni association, whose losses are capped at $525,000.
However, Bill Dean, CEO of the alumni association, said Rex Isom, Clayton Isom’s father, said he would make up any losses to the alumni association.
Thomasson said he expects the cap from the stop-loss amount to be met next year, after which Tech and the alumni association would not owe RaiderPark Limited Partnership any rent shortfall. Tech has an eight-year lease, while the alumni association has a four-year lease.
For 2011, Tech made the first payment of approximately $150,585 to RaiderPark Limited Partnership in October, and the second payment of $170,207.63 in December.
This $320,000 total is made up of total game day revenues of about $143,000, plus one-third of the rent shortfall of about $207,000, less $15,000 in operational expenses and the $14,000 paid to the Red Raider Club.
The alumni association also paid $207,000, one-third of the rent shortfall. This means Raider Park received about $527,000 last year in parking receipts and payments from Tech and the alumni association. In 2010, Raider Park received a total of about $528,000 from the three sources. Clayton Isom has not divulged the annual loan repayment amount owed to American State Bank.
The breakdown of the 2011 costs is posted on The Daily Toreador’s website.
The Daily Toreador requested the final amount Tech paid to RaiderPark Limited Partnership on Dec. 15, 2011. Chris Cook, director of communications and marketing, released three numbers revealing which parties were responsible for the December payment.
However, attorneys in Tech’s general counsel’s office provided incorrect numbers to Cook, who initially claimed the Red Raider Club owed RaiderPark Limited Partnership more than $35,000.
Fuller said this number was “erroneous,” and the Red Raider Club never paid RaiderPark Limited Partnership or Tech $35,000. According to the lease, the Red Raider Club is only responsible for marketing of the garage and operational costs on football game days, which cost them a total of $6,250.
After examining the payment numbers, The Daily Toreador asked to sit down and discuss the payment. Cook said a spreadsheet was being created detailing the numbers and payments.
The Daily Toreador requested an explanation from Sheila Kidwell, an attorney in the university’s general counsel’s office, of the final payment. She said a spreadsheet was compiled explaining the payment.
After many phone calls, Kidwell said the original numbers were wrong and that the new spreadsheet would be accurate.
Cook sent the spreadsheet to The Daily Toreador the following morning, which has been posted online.
The Daily Toreador also posted the return of an open records request filed in September 2011, for all emails and documents related to Raider Park Parking Garage and RaiderPark Limited Partnership.
Tech sent the request to the Attorney General to determine whether or not the emails could be released. When the open records request was filed in September 2011, Tech did release some emails, which have also been posted online in a separate file.
On Dec. 5, 2011, the Attorney General returned a favorable opinion for The Daily Toreador, releasing most of the emails. However, sections of the emails were withheld due to exemptions provided for under the Texas Public Information Act.