The Lexington Center Corp. board voted unanimously Monday to approve a $15 million Rupp Arena technology overhaul that includes a new center-hung scoreboard, wireless Internet for fans, and changes to the roof infrastructure so the arena can attract more concerts and major events.
The $15 million in upgrades are in addition to $800,000 that Learfield Communications — which has the contract for advertising for Lexington Center Corp. — has given the center to install ribbon boards around the second tier of the Rupp Arena bowl.
The ribbon boards will be installed by Oct. 2, before the University of Kentucky men's basketball season starts, said Bill Owen, president and CEO of Lexington Center Corp.
Lexington Center oversees Rupp Arena, the attached convention center and Lexington Opera House.
The two-year plan approved by the board Monday calls for upgrading in phases so arena programming won't be interrupted.
First, new production equipment will be installed, and four LED screens will replace the four static corner screens. Screen replacement probably will begin in the winter, Owen said.
During the May Lexington Center Corp. meeting, the board agreed to a three-year extension of Learfield's contract to sell and market advertising for Rupp Arena. As part of that deal, Learfield gave Lexington Center Corp. $800,000 to install the ribbon boards.
With ribbon boards, Learfield can sell more advertising. The more advertising it sells, the more money Rupp Arena receives, said Keith Burdette of Learfield.
Other improvements scheduled over the next year include LED displays for the lobby and new advertising signs on the Hyatt Regency Hotel next to Rupp Arena.
The center-hung scoreboard with new LED screens would be installed in time for the 2016-17 UK men's basketball season. Upgraded Wi-Fi would be installed during the 2016-2017 season. A new sound system and better lighting also are planned.
Judy Taylor, a board member, asked during Monday's meeting why the wireless upgrades had to wait until 2016. "That's one of the biggest complaints I hear, is that people can't use their cellphones."
Owen said the Wi-Fi upgrades can't take place before the other improvements because of the construction.
Improvements to the roof's infrastructure — which would allow for heavier lights and other overhead equipment needed for major concerts and for circuses and other events — would be completed in 2016 and 2017, Owen said.
DeWayne Peevy, deputy director of UK Athletics, told the board that Rupp improvements were in line with upgrades UK has made at its sports venues, including more than $120 million in renovations at Commonwealth Stadium. UK men's basketball is Rupp Arena's marquee tenant.
"Our main focus is on improving the fan experience," Peevy said. Fans want more. The upgrades to the screens and the new scoreboard will allow UK to communicate and engage fans directly. Currently, the only way to get the crowd involved is through UK's cheerleaders, Peevy said.
UK Coach John Calipari said via Twitter that he thought the proposed upgrades would be good for UK fans.
"I'm happy for the #BBN to hear about the upgrades to @Rupp_Arena," Calipari tweeted. "I'm excited to see how the changes improve the fan experience."
Julian Tackett, commissioner of the Kentucky High School Athletic Association, agreed with Peevy. The boys' high school basketball tournament has been held in Rupp Arena for years. Tackett said the KHSAA was seeing a drop in attendance at games where wireless and other modern technology is absent.
"We can't survive on ticket sales alone," Tackett said, and the additional advertising generated by the new LED screens could be a potential new revenue source for the KHSAA.
The board proposes to borrow $15.4 million to pay for the upgrades. The bond sale must be approved by Lexington's Urban County Council. Owen said he expected to appear before the council in the fall.
The corporation receives approximately 2 percent of a room tax on local hotel rooms to pay off a $22.5 million 2004 renovation. The bond payments on that renovation are to be completed in 2019. The corporation can use that 2 percent room tax after 2019 to pay off the new bonds by 2025, said Neal Werner, director of business services.
From 2016 to 2019, the board can use cash to pay the estimated $300,000 interest payment on those bonds.
Werner told the board during Monday's meeting that thanks largely to increased ticket sales for events in Rupp Arena — such as the Eagles concert Saturday — the corporation was expected to finish its fiscal year $4.3 million in the black. It has reserves of about $5.7 million, Werner said.
Owen said the group probably would tap its reserves to do some of the improvements scheduled this year. He also cautioned the board that the $15.4 million was just an estimate. The actual costs won't be known until all parts of the plan are competitively bid. But Owen said it was unlikely the cost would exceed the $15.4 million. The price estimate includes more than $700,000 in reserves for cost overruns.
Owen told the board Monday that all of the technology upgrades would be designed so they could be removed if a renovation and overhaul of Rupp Arena and the attached convention center ever move forward. Mayor Jim Gray had proposed a $350 million overhaul of the complex but put those plans on hold in May 2014 after the city and UK couldn't agree on the scope of the project.