Taxpayers’ $350m in Bengals stadium costs could actually amount to $1B+, surprise, surprise

WCPO-TV has conducted an analysis of what exactly is in the new lease that Hamilton County signed with the Cincinnati Bengals last month, and, well, if you were hoping it shows that the public cost will be less than the $350 million the two parties announced at the time, you must be new to this website, welcome! Let’s break down WCPO’s breakdown:

• The county will contribute a maximum of $350 million toward a $470 million renovation project, with the Bengals owners covering the rest.
• To raise the $350 million, the county plans to sell 15-year bonds, which will have to be paid off with interest. WCPO counts the interest payments as an additional $210 million expense, but that’s not really fair on two counts: 1) a bunch of that money won’t be owed for years, and money in the future is worth less than money now, and 2) really this is just the cost of how Hamilton County is choosing to finance its $350 million expense, not a change in the expense itself. So if we’re sticking to present value terms, interest payments shouldn’t count.
• Hamilton County will also commit to several million dollars a year in “capital spending,” which is separate from renovation costs, over the next 21 years, starting at $3 million a year for the first three years, jumping to $6 million in year four, then rising with inflation after that. (The county says this is an improvement on the old lease, which had unlimited capital costs; presumably this means the Bengals will be limited to $6 million a year in holographic replay screens.) It’s a little tricky to figure out a present value figure for that, but let’s go with a little over $100 million as a reasonable lower bound.
• Bengals ownership will pay back one-third of that in rent payments, reducing the county’s costs by a bit over $30 million.
• The county will continue to pay for all stadium operating expenses other than game-day ones. The current county estimate for these costs is $16.9 million a year, which increasing with inflation would come to at least $300 million in present value over the course of the lease. However, WCPO doesn’t take into account that a newly upgraded stadium could come with additional operating costs for changing the bulbs on those holographic replay screens, so this number could conceivably go higher.

Add it all up, and the county’s $350 million stated cost looks more like … let’s call it “at least $700 million” to be on the conservative side. That’s less than the $1.1 billion WCPO came up with, though that blank check for operating expenses could yet end up pushing taxpayer costs into the ten-digit range. And that’s without even taking into account the additional state money the Bengals plan to seek from Ohio’s unclaimed property slush fund, which would almost certainly result in this costing state and county residents more than $1 billion combined.

The county commission is currently holding a public hearing to shed more light on the stadium funding numbers, so there may be more on this tomorrow. It looks certain that the total taxpayer cost will be “more than initially claimed,” though, which, again, we’ve seen that story before.