SALEM, Ore. -- A key legislator who had reservations about the University of Oregon's proposal to build a lavish new basketball arena predicted Wednesday that lawmakers will soon sign off on plans to issue $200 million in taxpayer-backed bonds to pay the construction costs.

"I think that we are getting very close," said State Rep. Mary Nolan, D-Portland, who was one of only two lawmakers to vote against the proposal when it came before the Joint Committee on Ways and Means in January.

The other "no" vote, State Sen. Avel Gordly, I-Portland, said Wednesday that she, too, "might get there," and change her vote, though she still had questions about any potential burden on taxpayers.

Nolan said some of her concerns were alleviated by the university's agreement to start a reserve fund, fed by a $1 surplus on all tickets costing $8 and up for events at the new, 12,500 seat arena, which could be tapped if necessary to help pay off the university's debt.

Optimistic projections are that the arena would generate up to $15.6 million annually. But The Oregonian reported late last week on a 2004 report by an economic consulting firm that said annual revenues would be no more than $4.1 million. That analysis, however, was done before the broad scope of the project was envisioned. The university's annual operating costs and debt payments for the arena are projected to reach at least $19 million.

To cushion the cost, Nike founder Phil Knight last summer pledged $100 million for an endowment for the UO athletic department. That money won't be spent on the arena, but could free up other funding to help pay down the debt.

And just this week, the university announced plans for a lucrative $67.1 million advertising deal with Oregon Sports Network, including exclusive broadcasting and signage rights for all of the school's athletics. Money from the deal could be used to pay down the debt from the bonds.

Allan Price, the university's vice president for advancement, said if legislative approval comes in the next two weeks, the university will then seek a final signoff from the state Board of Higher Education in March. Construction could begin by late summer or early fall, he said.

And in the end, the project's hefty price tag might have helped it to become a reality, Price added.

"People are not so interested in daring to be average," he said. "You can generate more money in support of a grand vision than a mediocre one."

But Bill Harbaugh, an economics professor at the University of Oregon who filed a public records request to force the release of the 2004 report and its less-than-rosy projections, said the arena saga has been an eye-opener for entirely different reasons.

"This project has shown us what President (Dave) Frohnmayer can accomplish when he devotes his full energy to an issue," Harbaugh said. "I really wish he had put this same energy, commitment and passion into the academic side of the university, which has been neglected for years...I hope he gets his damn arena and retires."