By Alicia Keene and Abigail Arroyos
©TheHub@TTU
The Texas Tech University Alumni Association has decided not to renew the contract that would continue its lease of the Raider Park parking garage, after sustaining a loss of $525,000.
Renée Underwood, president-elect of the Texas Tech Alumni Association Board of National Directors, said there was not a discussion about this at the last board meeting over Homecoming weekend because she thinks everyone expected that they were not going to renew the contract.
Underwood said the board quickly voted unanimously before going on to the next topic. In fact, she said the board spent more time deciding its calendar for next year than the association’s future with Raider Park.
Bill Dean, CEO and executive vice president of the Tech Alumni Association, said the reason the board is not renewing the contract is obvious.
The 2011 renegotiated lease requires the alumni association and Texas Tech to pay Raider Park $750,000 a year to lease 1,000 parking spaces. This is regardless of how much money is actually brought in from the parking, which has averaged less than $200,000 each year, according to a document released by Tech to The Hub under the Texas Public Information Act.
However, the lease set a cap on the rent shortfall losses of $525,000 for the alumni association and $675,000 for Tech.
The association is bound to the Raider Park agreement until the contract expires in December, while Tech’s contract does not expire until 2017.
The contract provides a guarantee that Tech’s losses (if any) at the end of the contract will be repaid by Clayton Isom, the principal member of Raider Park, and his company, Tao Development. The contract provides no such guarantee for the alumni association. However, Dean said Clayton Isom’s parents, Nancy and Rex Isom, gave the association a promissory note that provided they would pay back the association’s capped losses. Dean, Ed.D., an associate professor of journalism at the College of Media & Communication, declined to show the promissory note to The Hub.
Nancy Isom is a member of the alumni association’s board of directors. Underwood said the Isoms did not want people to think they were taking advantage of the association.
Clayton Isom said the contract’s end date, which was decided during the contract renegotiation, is a natural expiration of the alumni association’s part in the project. He said the focus of the renegotiation was to to fulfill the alumni association’s belief that the university be Raider Park’s primary contractor, rather than the association.
Tech officials have previously said the contract was renegotiated because Raider Park was in default due to the elevators not working properly.
Isom said the renegotiation took the alumni association completely out of the deal, from an operational standpoint. The alumni association has had zero direct involvement since then, he said.
“This is a non-event as far as the project’s concerned,” Isom said. “This is exactly what was negotiated a couple of years ago.”
Isom said the contract between Raider Park and Tech remains unchanged. The renegotiation put Tech in charge of marketing, sales and operations.
Isom said the alumni association’s shortfall cap was met last year.
“They were paying us an additional rent,” Isom said. “It’s really to compensate or make up for the ramp-up period. You know, that period of time where it’s kind of increasing in sales and trying to stabilize. The shortfall was associated with what they were paying us over and above what they sold. So, for the first few years they were paying us more than what they had sold just to get it off the ground.”
The Tech shortfalls each year have dropped from $220,418 in 2011 to $206,235 this year. As of the fiscal year ending Aug. 31, Tech’s rent shortfalls from the last three years total $633,743, which is only $41,257 away from the school’s rent cap.
Tech has been able to make back some of this loss through Red Raider Club commissions and non-game day parking revenue. The Red Raider Club commission has brought in about $14,000 each year.
The lease requires the Tech transportation and parking services to receive the first $50,000 of non-game day parking revenue, but the total for this revenue has fallen short each year. The 2013 fiscal year came close with $47,321.
RaiderPark, LP, member Clayton Isom said Tech does not receive any profit. Raider Park retains all of the net football game day parking revenue.
Isom said he hopes the contract with the university will be renewed in 2017.
Russell Thomasson, Tech vice chancellor of corporate engagement, said it is still too early to know what will happen with Tech’s decision to renew the Raider Park contract, which is at its halfway point. He said he believes a reasonable time to consider contract renewals is around a year before a contract’s expiration date and contract renewals are considered based on their ability to meet the university’s vision, needs and objectives.
Student and game day parking sales at the garage are slowly increasing, Thomasson said. He also said he expects them to continue to increase over the next four years as student enrollment increases and athletic success continues. He said people, such as students and game-day patrons, will use the garage for many years to come.
Tech Alumni Association Board President-Elect Renée Underwood said she thinks Tech has not yet grown enough to meet the original projections, but the students will come, sooner rather than later.
About Alicia Keene
