The College Board, meeting Thursday at Jackson State University, approved plans for the University of Mississippi to lease 8.3 acres on the west side of Vaught-Hemingway Stadium to the foundation.
The 9,500-seat arena is scheduled to be completed by January 2016 and would replace the 9,061-seat Tad Smith Coliseum, built in 1967. Ole Miss says the current arena is outmoded and worn out.
But first would come an 820-space parking garage, costing up to $15 million. University officials said Wednesday that they plan to look at proposals to build it as early as Friday. Because the garage is being built in the heart of the university's commuter parking area and next to the football stadium, it's important that it be completed before classes begin in August, officials said.
The foundation plans to borrow $14 million to build the garage and $64.8 million to build the arena. It will cost $1.1 million annually for 15 years to pay off the parking garage bonds, while it will cost $4.5 million a year for 20 years to pay off arena bonds.
Some of that money would come from lease payments from the university. But the foundation, which is raising money through its Forward Together capital campaign, hopes to pay off much of the debt with donations.
"Give us some confidence that we've got the money to pay for it," College Board trustee Alan Perry told Ole Miss officials in a committee meeting Wednesday.
"Absolutely," said Larry Sparks, Ole Miss' vice chancellor for administration and finance.
Sparks said that as design proceeds on the arena, the university will be able to get more seat donations.
"The vast majority of those, we have to get farther along in the design phase before we can sell those seats," he said.
Those capital gift agreements, payable over four years, give donors priority in ticket-buying for 10 years. If donors wish to retain ticket privileges after then, they would have to give more money.
But those future donations aren't factored into the current financial plan, which Sparks described as a worst-case scenario. "Frankly, we didn't want to get it to this point until we were confident," he said.
The College Board approved initial plans for the project and appointed architects in March. It also approved exterior renderings for the garage and arena Thursday.