Financing

Overview: Financing

San Diego State University intends to increase its local impact through an expansion in Mission Valley. Here’s how it will be financed.

  • No reliance on tax dollars (state appropriation) nor tuition or student fees. These revenues are exclusively for our operating budget – instruction and instruction support. SDSU would not increase tuition or student fees to pay for SDSU Mission Valley.

  • Initial site development costs include land purchase site infrastructure, River Park and off-site mitigation (as part of CEQA process). These initial costs are estimated to be $300 million and would be financed through revenue bonds issued by the California State University system. These are not the same as taxpayer dollars. The bonds will be repaid with revenue generated by the leases with SDSU’s public-private partners, not taxpayer dollars.

  • The stadium is fully self-supporting with revenue generated by the facility (e.g., ticket revenue, facilities rental revenue, naming rights, sponsorships, donations) covering the development costs and ongoing operations of the project.

SDSU plans to utilize financing issued by the California State University. The CSU is “double A” rated with excellent, established access to the capital markets and $6.3 billion in outstanding revenue bonds. The CSU regularly issues bonds to construct revenue generating projects that do not require student tuition or taxpayer dollars—self-supporting projects similar to the types of projects envisioned for SDSU Mission Valley. The estimated site preparation costs and river park development costs are modest compared to the CSU’s overall capital program capabilities and experience.

The CSU has access to significantly lower cost of capital including:
  • Short and Medium term debt instruments (Commercial Paper, Floating or Fixed Rate Notes, Put Bonds, Direct Bank Loans)
  • Long Term Revenue Bonds, if needed.
Vertical development will be financed with ground leases to third party development partners through public-private partnerships. Development partners will provide private financing to develop and construct residential units, the innovation campus, hotel and retail outlets (vertical development). Public-private partnerships will allow the university to have access to new space without bearing the risk of financing, operations and maintenance of the buildings. The planned development schedule would begin in 2020 and is anticipated to take approximately 10-15 years for full build-out. Buildings would be occupied as they are constructed.

Contingencies are always built in to every project financed through CSU revenue bonds (including ensuring a cushion in revenues well above the debt service/repayment and anticipation of interest rate increases before final financing of the project). Other campus and CSU revenues, not generated from tax dollars (state appropriations) and not tuition or student fee resources, can be used to make financing payments.

Student tuition and fees are not part of the contingency plan.

The CSU has never defaulted on a debt payment.

Yes. Because the buildings will be shared with private entities and the general community, it will generate property taxes based on possessory interests. Due to the anticipated length of the lease agreements, the tax revenue will be similar to standard property taxes.

Additionally, retail establishments and the hotels on the site will generate sales tax and transient occupancy tax (TOT) revenue.

The SDSU Mission Valley development and its construction would result in significant economic impacts and new jobs for the region. Additionally, as the university is able to grow and accommodate more students, its economic impact on the region will also grow. For every 10,000 additional graduates, an estimated $200 million in annual economic output is generated for the regional economy. This would be in addition to the university’s current $5.67 billion annual economic impact.

Contact Us

La Monica Everett-Haynes
Interim Associate Vice President of Strategic Communications and Public Affairs and Chief Communications Officer
phone (619) 594-0232
leveretthaynes@sdsu.edu

Gina Jacobs
Assistant Vice President of Divisional Communications & Strategy
Business and Financial Affairs
phone (619) 594-4563
gina.jacobs@sdsu.edu

Rachel Gregg
Director of Government and Community Relations
Strategic Communications and Public Affairs
phone (619) 594-2078
rgregg@sdsu.edu

SDSU | Mission Valley