It was supposed to generate millions of dollars in revenue and much-needed parking for Texas Tech University. Instead, it's generated massive debt, created contention, and brewed controversy.
Raider Park is a parking garage and rooftop bar located along the Marsha Sharp Freeway, across from Jones AT&T Stadium. It has created an extra 1,000 parking spaces and 18 RV spaces for Texas Tech games.
It has also raised one major question: Are tax dollars and alumni donations being wasted on a bad deal?
Raider Park was the brainchild of 29-year-old businessman Clayton Isom and his company, Tao Development and Real Estate.
Isom graduated from Texas Tech University. In 2010, Isom cut a deal with Texas Tech University and the Texas Tech Alumni Association, in which Isom would lease his garage to them both. In return, Tech and the Alumni Association would pay Isom $750,000 a year for the rights to sell student and game day parking.
The goal was to accumulate big profits and produce parking near Tech. However, after just the first two years, the deal has lost $1.24 million.
Dr. Bill Dean, CEO of the Texas Tech Alumni Association, says the first year was tough.
"It was not successful the first year," Dean said.
Dean says in the first year, a combined $630,000 was lost. Texas Tech and the Alumni Association were left to foot the bill.
"Part of the problem, I think that first year, was public perception. That was, the parking garage was not finished," Dean said.
At the time the garage first opened, construction was still being completed.
After the failed results of 2010, the Alumni Association and Texas Tech knew changes needed to be made. So, the Board of Regents and Chancellor Kent Hance negotiated a new deal. The deal now had Texas Tech, the Alumni Association, and Clayton Isom splitting the $750,000 dollars a year in rent three ways. That figure would be minus revenue made from spaces that were sold.
KCBD NewsChannel 11 wasn't the first to take notice of what was happening. The situation also caught the attention of Daily Toreador student journalists Ioanna Makris and Caroline Courtney.
"Kent Hance and some people on the Board of Regents decided to step in and help out, and in doing so, they ended up creating this new contract that's being stood by today," Makris said.
The pair, along with other student reporters, began to investigate it.
"I think Clayton Isom really started out with the idea that this would be a profit-making venture for himself and Tech," Courtney said.
Makris and Courtney learned the new three-way split wasn't the only change made for 2011. The Alumni Association entered the new agreement with an option to terminate it after four years. Texas Tech had the same option, only their termination would be allowed after eight years.
The new deal insured that Texas Tech University could only lose $675,000, by giving them a safety cap. The Alumni Association's cap was set at $525,000.
"And it actually helped the alumni association lose less money," Makris said.
Less money, but still, money was lost. In 2011, the deficit was $618,000. A loss, when split three ways, that totaled $260,000 for each party. The two-year grand total loss was now $1.24 million.
KCBD asked Dr. Dean if he felt this was a bad deal.
"If you look at just that figure and you look at the first two years, obviously the answer is yes." Dean said.
Tech also received a guarantee, in writing, from Isom's Company, Tao Development and Real Estate. The guarantee said that if Texas Tech University saw a loss over their eight-year agreement, Isom would pay all the money back to Tech.
The Alumni Association received a similar agreement, but it was not in writing. This agreement came from Isom's dad, Rex Isom. Rex Isom used to sit on the Alumni Board.
"He sat down and told me that he would guarantee me that the Alumni Association would not lose any money on this deal when it was all said and done. He would personally be responsible for that," Dean said.
Despite that promise, Dean admits he has some concerns about the parking garage, especially when it comes to Texas Tech Football. He worries the lackluster performance of the team this year will translate into poor ticket sales at Jones AT&T Stadium next year, and even worse ticket sales at the garage.
"Our fan base is somewhat fractured at this time. We didn't go to a bowl game, first time in 10 years. We were embarrassed by Oklahoma State. People are uneasy about that," Dean said.
In a statement to KCBD, Clayton Isom said: "Tao remains deeply committed to Raider Park. We will continue to work with all of our tenants to demonstrate that commitment and to make this a successful endeavor for all involved."
Student reporters Makris and Courtney say the endeavor may prove to lose money.
"Eventually, you run out of money. If you're not making money, you run out of money. So, I guess the question to everyone is - what are they going to do in the four years that the contract comes up - are they going to re-sign?" Makris said.
In the meantime, it appears Texas Tech, the Alumni Association, and Isom will continue to lose money, at least until Tech and the Alumni Association hit their caps.
"If this thing does not appear to turn around, then we probably will get out, but we hope that doesn't happen and I don't think it will," Dean said.
Only time will tell if Raider Park's numbers stay in the red or climb into the black.
The students who first broke the Raider Park story for the Daily Toreador say they also uncovered an interesting connection between those who took part in the deal. They say Claytom Isom, his father Red, and Dr. Bill Dean are all alumni of the Phi Delta Theta Fraternity. They say four other members of the Texas Tech Alumni Association were also members of the fraternity.
KCBD reached out to Texas Tech University and the Chancellor's office, but they declined to comment on this investigation. Instead, they sent KCBD a list of bullet points:
Copyright 2012 KCBD NewsChannel 11