Somebody’s going to ask the state of Ohio to cover FC Cincinnati’s stadium gap

Welp, looks like the owners of F.C. Cincinnati has figured out where they’re going to get their missing stadium money now that the city and county have topped out at $51 million:

The City of Cincinnati hopes to obtain $10 million from the state to help cover costs related to building the FC Cincinnati stadium, should the city be awarded a Major League Soccer team later this month…

The ask is among 43 Hamilton County projects totaling $64.6 million being vetted for a final list the region wants the state to fund. The soccer stadium project request is by the far the largest on the list, accounting for 15.5 percent of the total…

“These projects are very important to the community,” said Gary Lindgren, executive director of the Cincinnati Business Committee, which is coordinating with the Cincinnati Regional Business Committee and the Cincinnati USA Regional Chamber of Commerce to present requests to the state.

I am admittedly somewhat confused who’s doing the asking here — a bunch of local business groups? the city of Cincinnati itself? the Cincinnati Enquirer doesn’t seem to make a distinction — but the point is that the United States’ multi-level system of government may come to a team’s subsidy rescue once again: If you don’t get what you want from one level of government in this country, you can always go ask a different one.

Any state subsidies won’t be decided until the new year, so presumably this won’t help sway MLS’s expansion decision later this month, but maybe they’ll figure “Enh, close enough, they’ll figure out somebody to pay that last $20 million or so, not our problem so long as we get out $150 million expansion check”? I mean, maybe — or maybe this will be good reason to bump Cincinnati’s bid to next year after all the funding is (presumably) nailed down. We’ll see in just a couple more weeks.

Cincinnati okays $37m in soccer subsidies after neighborhood council unanimously says no

It looked for a minute there yesterday like F.C. Cincinnati‘s stadium subsidy demand was going to die an ignominious death, after the community council of the Oakley neighborhood where the stadium would go voted unanimously to oppose the deal on the grounds that it would soak up all of the area’s tax-increment financing money and leave nothing for other projects.

That didn’t happen — after a four and a half hour meeting yesterday, the Cincinnati city council voted 5-2 with one abstention and one absence (Wendell Young is still out after September heart surgery) to approve between $27 million and $37 million in public money for the project. But with team owners insisting they need $70-75 million in taxpayer subsidies to make a $200 million stadium happen, that still may not be enough to get the job done. Oh yeah, and also the team may still not want to build in Oakley after all — take it away, Cincinnati Enquirer politics columnist Jason Williams:

[Team president Jeff] Berding opened the door to the possibility that Oakley might not even be where the stadium ends up.

“The mayor and council may work with us to say it might be in a different neighborhood,” he said.

Said Councilman Kevin Flynn: “It may not be in Oakley. It may be somewhere else.”

Okay, then! Williams reports that “City Hall insiders” said $27 million of the city funds will still be available wherever a stadium is built in the city, so the F.C. Cincinnati owners can now shop around for the best deal. Though regardless of where they go, it sounds like the county isn’t interested in filling the team’s self-imposed funding gap, so … MLS is going to have a really interesting time deciding whether this is enough of a new-stadium commitment to hand Cincinnati an expansion franchise, let’s just put it that way.

If the league is just looking for enough cover to put a team in a city that has turned out for lower-division soccer in record levels, maybe this will do it. If, on the other hand, they’re just looking to use the expansion process to extract the most stadium cash from cities, they can pick two other winners next month (Nashville and Sacramento, say), and tell Cincinnati “close, but we’ll need another $25 million by next offseason before you get a cigar.” Three guesses which one my money is on.

Friday roundup: CFL in Halifax, Columbus ghost stadium, Sydney is the new Atlanta, and more!

Are any of my American readers even out there, or are you all too busy tormenting retail workers with your demands for discounted goods? If so, you’re missing out, because we’ve got all your goods right here, at our everyday discount of free!

  • The CFL is considering expanding to Halifax, which means Halifax would need a CFL stadium, which means somebody would have to pay for a Halifax CFL stadium. Halifax Mayor Mike Savage says a stadium is “not a capital priority at this time” and would have to be built “without putting taxpayers at risk.” The Ottawa RedBlacks stadium model is being floated, which is slightly weird because that ended up costing taxpayers a bundle of money plus free land, but maybe “taxpayer risk” is defined differently in Halifax. Anyway, we’ve been this far before, so grains of salt apply.
  • Remember how I wasn’t sure what would be included in the $75 million in public “infrastructure” spending that F.C. Cincinnati is demanding? Turns out that’s because nobody’s sure: WCPO notes that the team hasn’t provided any cost estimates or a traffic study, which “leaves us wondering where, exactly, FC Cincinnati came up with its figures.” I’ll take “nice round number, slightly less than the $100 million elected officials balked at previously” in the pool, please.
  • A guy in Columbus came up with an idea to use county sales tax money to build a new stadium to keep the Crew in town, then the next day said it was just an idea he came up with over the weekend by himself and never mind.
  • The city of Worcester is still trying to lure the Pawtucket Red Sox to town, and the state of Massachusetts may be getting involved, with one unnamed source telling the Worcester Telegram that stadium funding would need to be a “a three-legged stool” among the city, state, and team. You know this article is just going to be waved around in the Rhode Island legislature as it heads toward a vote on public funding for a PawSox stadium there, and what was everyone just saying about the role of enablers in abuse, again? (Not that stadium swindles are morally equivalent to sexual harassment, obviously, but you get my point. Also, why are all the articles about the role of enablers in sexual harassment a month old, are we not going to pay attention to that after all?)
  • The state of Connecticut may spend $40 million on upgrades to Hartford’s arena and some retail properties near its entrance, on the grounds that it might make it more attractive to buyers. If this seems like getting it backwards to you, yeah, me too, but at least it’s better than spending $250 million on the arena and then not selling it.
  • Laney College students, faculty, and staff all hate the idea of an Oakland A’s stadium on their campus. “They want to disrupt our education by building a ballpark across the street with noisy construction, traffic gridlock, pollution, and alcohol consumption by fans,” Associated Students of Laney College President Keith Welch told KCBS-TV. “We will not sacrifice our education so that the A’s owners can make more money.” Pretty sure they won’t get a vote, though.
  • “Industry experts” say that the new Milwaukee Bucks arena will charge more for concert tickets because … it’ll draw bigger-name acts that cost more, I think they’re saying? That doesn’t actually seem like a detriment, though they also note that the new arena has a higher percentage of seats in the lower bowl, which people will pay more for even if they’re way in the back of the lower bowl, and helps explains why arena and stadium designers are so obsessed with getting as many lower-deck seats as possible even if it makes for crappier upper-deck seats. Which we kind of knew already, but a reminder always helps.
  • And move over, Atlanta, there’s a new planned stadium obsolescence king in town: The state of New South Wales is planning to spend $2 billion Australian (about $1.5 billion U.S.) to tear down the Sydney stadium it built for the 2000 Olympics, along with another smaller stadium in Sydney built in 1988, in order to build newer ones that are more ideally shaped for rugby, I think? Because nobody thought of that in 2000? I need to wait for my Australian rugby correspondent to return from holiday break for a more authoritative analysis, but right now this is looking like one of the worst throw-good-money-after-bad deals in stadium history, and it’s not even in America, the land that has perfected the stadium swindle. Crikey!

Cincy mayor offers $37m in MLS cash plus full property tax break, team says “please send more”

So Cincinnati Mayor John Cranley came out with his funding plan for an F.C. Cincinnati stadium on Friday, and while it included tax-increment financing as expected, it also included a whole lot of other proposed subsidies:

  • $9.75 million from an existing tax increment financing district in Oakley
  • $7.38 million from Blue Ash airport sale (money is currently in reserved fund)
  • Up to $1.5 M from hotel tax annually will be used to pay off a $20 million loan for the project. But that will cost up to $45 million in hotel tax over 30 years to pay down.
  • The city will also give FC Cincinnati a tax break for employees through a 50 percent job creation tax credit. Under a job creation tax credit, companies receive a certain percentage of the city earnings taxes paid by their employees back as the jobs are created.

Oh yeah, and this:

Under the plan, the Cincinnati Port Authority — a government agency — would own the stadium. That means the city, school system or county would not collect any property taxes on the entire property, including the stadium.

So that’s $37 million, plus that kickback of city income taxes on any jobs “created,” plus a full property tax break. How much that second bit will come to is tough to say without knowing how much the team would pay its employees (or players, though under the single-entity MLS model where the players are technically paid by the league, can they count as F.C. Cincinnati jobs?), but basically a 50% credit means kicking back 1.05% of team payroll, so if anyone has access to a typical MLS team’s payroll documents, we can figure that out. It’s not going to be much, though — even if the team spent $10 million a year on payroll, which is unlikely, it’d only be present value of maybe $1 million and change.

As for the property tax break, going by this example, the commercial property tax rate is about 8.6%, and the assessed value of a property is about 35% of its market value, so if a soccer stadium costs $250 million, then it would normally be paying $7.5 million a year, which would make present value of a full property-tax break worth more than $100 million. That seems high — maybe I’m wrong in assuming that “market value” equals construction price in tax assessment — but given that Minnesota United‘s $150 million stadium is getting $54 million in property tax breaks, and Cincinnati has higher property taxes than St. Paul, maybe not all that high.

In any event, as noted last week, the county is willing to put up $12-15 million for a parking garage, so at this point F.C. Cincinnati has offers of $50 million in hand (assuming the Cincinnati city council okays Cranley’s proposal), and is seeking $70-75 million. I know I probably shouldn’t be saying “Why quibble over $25 million?” when I haven’t had that much money in my entire lifetime, but you know, when you’re spending $150 million just on an MLS franchise, it does seem like less of a huge sum. Or, you know, maybe it’s a sign that MLS should lower its fees some in order to get in on a hot soccer market, but we’ve been over that one before.

UPDATE: So I wasn’t far off:

 

FC Cincy cuts subsidy demand to $75m in “infrastructure,” county and city offer $50m instead

A last-minute flurry of negotiations between F.C. Cincinnati and Hamilton County yesterday over subsidies for a new soccer stadium didn’t actually end up resolving anything, but it sure was a flurry:

  • FC Cincinnati president Jeff Berding said the team was no longer asking for $100 million to pay stadium construction costs, and was instead asking for $70-75 million in “infrastructure” costs.
  • Cincinnati Mayor John Cranley said the city would cover the balance from tax increment financing kickbacks if the county would put in about $40 million via $2.8 million a year in existing hotel taxes. “There’s no way for the city to finance it by themselves,” Berding said. “This should be a layup. It’s a layup in that it’s infrastructure and it’s a layup in that it’s a source of funds that no one is currently using and doesn’t raise anyone’s taxes.”
  • The Hamilton County Commission replied with two options: Either $12-15 million from existing parking garage revenues toward building a new garage by the stadium site, or the soccer team could play in the Bengals‘ Paul Brown Stadium.
  • Berding wrote back in a public statement that while “it was good to see the County Commission come to the table,” the team “will not be funding public infrastructure routinely covered by governments” and “the financial data that we transparently shared with the County proves to us that Paul Brown Stadium would not support an MLS team.”

That’s a whole lotta public haggling, with the promise of more to come. (Berding is out of town, but promised on his return to “be back at it working with elected officials” on a stadium plan.) If nothing else, Hamilton County’s hard line has gotten F.C. Cincinnati’s owners to knock off $25 million from their demands, which isn’t nothing. And if I’m calculating right, the combination of TIF money and county garage money would now come to around $50 million, meaning the two sides are just haggling over $25 million, a gap that seems surmountable.

Whether you consider $50-75 million still too much for Cincinnati area taxpayers to spend on a team that already has multiple other stadium options that the team keeps turning down will depend on what you consider government’s responsibility to build “infrastructure” — garages, for one, are not something governments normally build for just anybody, and team execs weren’t specific on what “roads and utilities” would include. It’s still a large chunk of change to throw at a soccer team — as large as Nashville approved for its proposed MLS expansion team — but maybe at least small enough now to be out of the running for Worst Stadium Scam of the year.

Handicapping Deadspin’s “Worst Stadium Scam” Vote

Deadspin is holding its second annual Deadspin Awards, and among the categories, you will be excited to know, is Worst Stadium Scam. And it’s set to be a tight race, with these candidates, not all of which are technically from 2017, but let’s not nitpick:

  • The Raiders robbing Las Vegas
  • The Flames trying to rob Calgary
  • The Falcons robbing Atlanta
  • The Louisville Cardinals robbing Louisville
  • FC Cincinnati robbing Cincinnati
  • The Pistons and Red Wings robbing Detroit

Even though these seem mostly selected by which stories were covered by Deadspin in the last year (Nashville SC robbing Nashville didn’t make the cut, nor did the Cavaliers robbing Cleveland), that’s a pretty solid selection. The Raiders and Falcons stand out for the scale of the subsidies — the Raiders will get $750 million in state cash while paying zero rent, while the Falcons will end up getting almost that much over time — and the Falcons have the bonus scamminess of hiding $400 million of their payday in a “waterfall fund” that will keep paying out long after the stadium’s opening. The Flames and FC Cincinnati haven’t been successful in their shakedowns yet, but are notable for trying (and failing) to get a more team-friendly mayor elected in the former case, and for demanding subsidies on the grounds that their owner has never asked for them before so he’s due in the latter. The Red Wings and Pistons are getting about $350 million in public money from a bankrupt city (or from a state that is otherwise starving a bankrupt city, at least), while the Louisville basketball arena deal is just a nightmare without an end.

I’m not going to reveal how I voted, except to say that it was a tough decision, and I won’t be unhappy at all if one of my second choices takes home the prize. Go cast your ballot now, and give extortionate corporate behavior and terrible public policy the shiny trophy it so desperately deserves.

FC Cincinnati exec: Our new stadium will be mumbletaxkickbacksmumble totally awesome!

Word puzzle time! F.C. Cincinnati president Jeff Berding has hidden an important piece of information in a mound of empty rhetoric. Can you find it?

“We’re going to put up, it looks like at this point, over $300 million of our own money to bring the MLS to Cincinnati,” Berding told 700WLW. “It’s going to look nothing like what happened on the riverfront. We’re not going to institute a new tax on our residents. We’re going to use growth-related revenues. We’re very excited about where we are. We think it’s a winning plan. It’s a model plan that people can feel good about. Nashville passed their (stadium plan) last night by a vote of 31-6, and I don’t want to take a backseat to Nashville or anyone else. We’re gonna show Cincinnati can get something like this done, and get it done the right way.”

Spot it yet? No, nothing about the riverfront, that’s misdirection. Not the bit where he tries to guilt Cincinnati about “taking a backseat to Nashville,” though that’s kind of amusing on its own. Keep looking. Ready for the answer?

“We’re going to put up, it looks like at this point, over $300 million of our own money to bring the MLS to Cincinnati,” Berding told 700WLW. “It’s going to look nothing like what happened on the riverfront. We’re not going to institute a new tax on our residents. We’re going to use growth-related revenues. We’re very excited about where we are. We think it’s a winning plan. It’s a model plan that people can feel good about. Nashville passed their (stadium plan) last night by a vote of 31-6, and I don’t want to take a backseat to Nashville or anyone else. We’re gonna show Cincinnati can get something like this done, and get it done the right way.”

There it is! In stadium-demand parlance, “no new taxes” means some form of existing taxes, and “growth-related revenues” means taxes paid by (or around) a new venue — i.e., tax-increment financing. Whether this would just be a kickback of taxes (property, sales, income, who knows?) paid by the stadium itself, or would include a larger district around the stadium, who knows, though it’d need to be the latter if it would pay for any significant chunk of a stadium’s price tag.

Berding has hinted at a TIF before, especially for a stadium in Newport, Kentucky, but this is one of his stronger statements on the matter, if you can call burying it in a sea of clichés “strong.” Berding also said he hopes stadium plans to be public by the end of the week, so maybe we’ll get more details then, though if I were a gambling man I’d put my money on more poorly-scaled renderings.

Cincinnati considers offering Bengals’ stadium as home for MLS team, seeing how that flies

Cincinnati really does appear to be one of the front-runners for an MLS expansion franchise, based on its record attendance for the minor-league F.C. Cincinnati, but local soccer advocates are worried about the league’s stated rule that any new teams need to bring with them new team-controlled soccer-only stadiums. (Which worrying is exactly the goal of said rule.) So while some people still dream of applying to have an MLS team play at the University of Cincinnati’s Nippert Stadium, the Hamilton County Commission is wondering, hey, maybe MLS would like the Bengals‘ stadium better?

Commissioners are offering up the stadium, which county taxpayers own, as a solution to keep FC Cincinnati in Ohio — without spending the $100 million from the public the team says it needs to build a $200 million stadium.

“We own a stadium on the riverfront, that from my understanding, soccer can be played at,” Hamilton County Commission Vice President Denise Driehaus said. “I’ve asked the (county) administration to take a hard look at Paul Brown, to pursue it or get it off the table.”

Yes, soccer can be played at Paul Brown Stadium, just as it can be played at Nippert. And sure, maybe MLS will be placated by a non-soccer-specific facility that isn’t owned by the local team if it’s a non-soccer-specific stadium that has nicer cupholders. But since MLS has made pretty clear that it intends to conduct its expansion decision as a stadium arms race — consistent with its greater mission of getting as much short-term cash as possible, because who knows what the future may hold, especially now that any hope of getting an attendance boost from the draw of seeing next year’s U.S. World Cup stars just went out the window — they probably would be just as well off saying, “We’ve got a terrific market, you’ll just have to put up with our oldish stadium if you want us,” and see how that works out. Probably poorly, but when the alternative is spending $100 million you don’t have, it’s worth a shot, anyway.

Cincy may lack cash for MLS stadium because it has too many other sports venues to subsidize

About 100 F.C. Cincinnati fans attended a Hamilton County Commission meeting last night to urge the commission to spend $100 million on a new soccer stadium for the USL team, which is hoping to land an MLS expansion franchise. County Commission President Todd Portune, however, told them that “we have more projects than we have money,” with the county facing $1.5 billion in pending capital projects. Like, the county jail is overcrowded and needs expansion, and a new waterfront development project is still mostly undeveloped, and, um:

The city’s two current major league sports teams — the Reds and the Bengals — will eventually come knocking on the county’s door for a new deal. The Bengals stadium lease with the county expires in 2026 with the Reds’ lease expiring a few years after. Combined, the two stadiums could need more than $200 million in upgrades within the next decade.

“While no one is talking about demoing these stadiums, we know there will be substantial maintenance (needs),” [Hamilton County Administrator Jeff] Alutto said.

Those leases running out are worth planning ahead for, I suppose, but it’s still a little worrisome that Hamilton County is already budgeting for stadium renovation “needs” that the teams haven’t even asked for yet. Apparently either somebody hasn’t gotten the memo that it’s okay to demand that taxpayers not take a bath on stadium projects, or else Hamilton County leaders think that Cincinnati has less leverage to keep its teams without bribing them to stay, which, okay, maybe.

That said, the rest of the county’s wish list includes a $230 million convention center expansion and a $342 million rebuild of the city’s arena, neither of which exactly seems like a “need” per se. If the only choice for Hamilton County is which dumb project for private profit to sink public money into, I can sort of see why soccer fans would feel justified in saying, “Us first!” Too bad overcrowded prisoners don’t have fan clubs.

FC Cincy mulling Kentucky tax kickbacks to pay its entire stadium cost, and other week’s news

All the news that wasn’t fit to print this week:

  • FC Cincinnati now wants the Port Authority of Greater Cincinnati to own its stadium since Hamilton County doesn’t want to. (Does “own” mean “pay for”? Reply hazy, ask again later.) Or maybe Newport, Kentucky, since, according to team president and former city council members Jeff Berding, that would allow the team to recoup its entire $100 million through tax increment financing kickbacks of property taxes paid on the property. How would it generate a whole $100 million in TIFs? Reply hazy, ask again later.
  • Would-be Seattle arena builder Chris Hansen hired University of Washington public finance professor Justin Marlowe in May to compare the economic impact of his Sodo arena proposal to that of the KeyArena renovation plan, and he has issued his report, which says that the Sodo plan would create three times as much tax revenue for Seattle ($103 million over 35 years vs. $34 million for Key). On the other hand, the Key plan would include some kind of sharing of arena revenues, though that wouldn’t kick in until the Key developers got their share, and, yeah, basically it’s a muddle. On the whole, it seems to give the edge to Hansen’s plan, if only because that arena would pay property taxes, but I’d need to sit and break down the math to say exactly by how much, and I’ve been waiting for time to do that all week, so clearly it’s not happening. Reader exercise!
  • Oakland A’s executive VP Billy Beane promised that once the team gets a new stadium, it will stop trading all its decent players once they start to get expensive: “There’s only one way to open a stadium successfully, and that’s with a good, young team. … Really what’s been missing the last 20 years is keeping these players. We need to change that narrative by creating a good team and ultimately committing to keep them around so that when people buy a ticket, they know that the team is going to be around for a few years.” Which could make sense if a new stadium draws enough fans that having a winning team boosts revenues enough to pay for player salaries, though we’ve heard this song and dance before elsewhere.
  • The Nashville Sounds‘ new stadium was supposed to cost taxpayers $37 million, but it ended up costing $91 million.
  • What does $74 million in public subsidies buy Minnesota Timberwolves fans and staff? New seats, new restrooms, new locker rooms, an ice floor that doesn’t leak, two new loading docks, and a big glass wall, because everybody’s gotta have one of those.
  • The athletes’ village from the 2016 Rio Olympics is now a wasteland of unsold condos, because everything the Olympics touches turns to trash.
  • A homeless camp has arisen on the site of the planned Las Vegas Raiders stadium. Make your own metaphors.