Cincinnati’s WCPO has done a long analysis of the projected public and private costs of F.C. Cincinnati‘s new stadium, and determined that contrary to claims that contrary to claims it will cost taxpayers $63.8 million, the actual public price tag will be $213 million. That’s a lot more money!
Unfortunately, the charts that WCPO has used to accompany its article are not all too clear:
And even more unfortunately, WCPO has included 20-year costs as if they’re all payable now, meaning it’s impossible to figure out the cost in present-value terms. (Paying $10 million over 20 years isn’t really a cost of $10 million any more than paying $1 million in mortgage payments over 20 years means you bought a $1 million house.) So we’re going to have to break these down one by one:
- It’s projected to cost $34.4 million over 20 years ($1.72 million a year) to pay for the construction of two parking garages, and while garage revenues are projected at $2.6 million a year, some of that needs to go to pay operating expenses. Net cost: unknown.
- “The city of Milford is borrowing $3.5 million to cover the cost of purchasing land for FC Cincinnati’s training facility.” Net cost: $3.5 million.
- The city of Cincinnati is “likely to finance up to $25 million in funding commitments for road improvements, a 750-car garage and other stadium infrastructure.” Net cost: $25 million.
- The stadium and practice facility will be owned by Hamilton and Clermont counties, respectively, and to get around a law that private entities must pay property taxes on any port authority land leased for more than one year, the team will operate under a series of 360-day leases. The team will make a lump sum payment of $9.3 million to the Cincinnati public schools, which is estimated to be 25% of the present-value total of future property taxes, so if we assume the other 75% to be a tax break then we get net cost: $27.9 million.
- The team will be exempt from sales tax on construction materials. Net cost: $7.7 million.
- Cincinnati is providing $8.9 million in cash, and the state has committed to $4 million in cash and is expected to approve another $4 million. Net cost: $16.9 million.
- There’s a bunch of land changing hands in complicated ways, and the WCPO article isn’t clear about what’s a cost and what’s a revenue, so net cost: unknown.
That gets us to a total of upwards of $81 million, which is definitely more than $63.8 million, but not nearly as much as $213 million. This is why it’s important to specify your units: There’s a massive difference between paying $213 million now and paying $213 million over 20 years, and headlines confusing the two are, well, confusing.
That said, there are still hidden costs to this deal, and upwards of $81 million is still a lot to pay for a soccer stadium for a team that was already drawing well in its existing stadium. The F.C. Cincinnati deal was a major taxpayer handout to begin with, and it’s only getting handoutier.