Big Bucks Don't Always Buy Quality
In 2012, the Dallas suburb of Allen, a rapidly growing and affluent area, attracted national attention, not all of it good, for building a high school football stadium at the eye-popping cost of $60 million. The stadium was supposed to be a state-of-the-art facility which seats 18,000, features a 38-foot wide video scoreboard, numerous luxurious amenities and just about every bell or whistle imaginable. The stadium was part of a $120 million bond issue and the school district vigorously defended the cost as an investment in present and future generations of Allen students. And indeed, in 2913, the Allen Eagles won the Class 5A Division I football state championship. More, they contended the stadium could attract area play-off games, host graduations and other functions and even host commercial events. But, just eighteen months after completion, the opulent stadium has been closed indefinitely due to the appearance of serious cracks in the concrete along a number of public access concourses. An engineering firm has been retained to assess the structural defects, which appear to be major, and it is about 10% finished with its initial assessment. Therefore, the stadium will be closed for at least this spring's graduation ceremony and probably next year's football season. It is presently anticipated that the stadium can be repaired, but it will be an expensive and time-consuming proposition.
It has been said that the road to hell is paved with good intentions, but even if damnation isn't on the table, (although the folks who designed and built this turkey may be feeling the heat as we speak), this revelation has to be a gigantic disappointment to school officials who clearly intended the best for the community they serve. It's sort of like waiting a lifetime to buy a Rolls Royce, only to find out that the one purchased has a cracked block and a bent frame. So, what can be learned from such a painful exercise? Well, for starters, just because you spend a boodle of money on something doesn't guarantee quality. And, in the case of investments into facilities intended for public use that can get problematic pretty darn quickly. School district officials are normally protected by sovereign immunity when somebody gets hurt in a school facility during a school related function. But, when the district engages in commercial activities that immunity falls away and they can be held liable like any other property owner. This is because property owners must take reasonable precautions to protect people from hazards they know about and which wouldn't be obvious to visitors. So, for instance, if the concourse collapsed and a bunch of people were injured or killed, there would be massive liability exposure.
Obviously, most of us aren't in the process of building any $60 million facilities in the near future. But, caution in exercising your investment judgment is relevant to a lot smaller exercises than that. For instance, if you are thinking about replacing your roof or added an addition or putting in a swimming pool or a tennis court or that sort of thing, read the fine print, know clearly who will be responsible if something goes seriously wrong and make sure you have plenty of applicable insurance. Otherwise, you just might have a mind-bending bout of buyer's remorse to equal what the Allen school district folks must be feeling about now.