Category: Cincinnati arena

We spend a lot of time here looking at ways wealthy sports team owners lobby for public spending on new stadiums and arenas to make themselves richer, or at least give them fancier places to entertain their friends and make their competitors jealous, as one does. But then there are the cases where the sports-industrial complex takes on a mind of its own and demands subsidies for buildings that no team in particular stands to benefit from, on the general principle that all the other kids are doing it, so it must make sense.

One can usually depend on local chambers of commerce to lead the charge for public money to be used for this kind of thing, and sure enough, that’s who’s pushing for Cincinnati to spend around half a billion dollars on a new arena:

“What became clear through our work is that our region is an epicenter of cultural vibrancy, music, art, and sports in the Midwest,” said Brendon Cull, President & CEO of the Cincinnati Regional Chamber. ” In terms of assets, we are missing one key component: a modern arena. Our study makes clear that the opportunity before us is more concerts, more sporting events, more family entertainment, and more comedians that contribute to growth in population, the economy, and cultural vibrancy in our region.”…

“The results of this study mark a significant advancement in the ongoing conversation about the necessity for a state-of-the-art modern arena for Greater Cincinnati,” said Bill Baker, Vice President & Managing Partner of MSA Sport. “By being located in Cincinnati’s vibrant urban core, a new arena will attract more visitors and events, spur additional investment in the city, and further enhance our great region.”

Okay, there’s not no self-interest at work here: MSA Sport would be in line to design and build a new arena, so clearly they have their own reasons to want to drum up business. Other names on the study are the Machete Group, Turner Construction, and Populous, all big names in the sports construction world. (They say they consulted with the owners of the Cincinnati Cyclones minor-league hockey team, who have “expressed a willingness” to partner on the project if the city brings its checkbook; FC Cincinnati owner Jeff Berding has been hot for a new arena for years now as well, though it’s not clear if he thinks he could get operating rights to one or what.) The report’s authors argue that if the city puts up 70% of the money toward a $675 million–$800 million arena project, it could reap $829,000 a year in new tax revenues, which would only amount to a $30 million a year or so annual loss — hey, nobody said they were big names in math.

The study also includes a list of musical acts that toured nearby in recent years but skipped Cincinnati, with the clear implication that it’s because their arena is a dump:

Build a new arena, and Elton John will come! Or, well, maybe not, but somebody will, and who can put a price on that? Sure, pointy-headed economists probably, but who wants to listen to them when there are arena contractors with such nice clear plastic binders?

Cincinnati is considering building a new basketball and hockey arena? At the behest of Jeff Berding, co-owner of its soccer team, F.C. Cincinnati? Apparently yes and yes, but while this raises a lot of questions, I’m afraid we will only have time today to investigate one of them, which is: Who would be paying for this exactly?

“There doesn’t need to be a tax increase to do this. There doesn’t,” Berding said. “However … that’s the whole point of having an independent study. It includes a financing plan. There’s government dollars. There’s also private dollars that can go into these things.”

Okay, so: No “tax increase,” but “government dollars.” That implies using some existing stream of tax revenues ($300 million worth, according to the last time this was proposed back in 2018), which otherwise could be spent on something else (thus reducing the need for new taxes to pay for the something else) or returned to taxpayers (and missing out on a tax refund is effectively the same thing as an additional tax). Unless maybe Berding thinks he can get federal infrastructure dollars for a new arena, since that’s worked out so well elsewhere? Who knows! (It’s always fun, incidentally, to see sports spending proponents choose between “no new taxes” pledges and “no diversion of existing budget” ones, even though one precludes the other if public money is going to have to come from somewhere.)

But Berding didn’t go into detail because, as he noted, there has been no independent study of costs or financing, though he would like the city of Cincinnati and Hamilton County to conduct one, since he sure isn’t going to do one on his dime. So how does he know how one would turn out?

“I’ve seen enough high-level financing models that suggest there doesn’t need to be a tax increase.”

Well then!

For those in need of a scorecard, Cincinnati’s current arena was built in 1975 and is home to the Cincinnati Cyclones minor-league hockey team, though it’s probably best known as the site of the 1979 Who concert disaster. Berding, meanwhile, is a Bengals executive who shepherded that team’s sales-tax-funded stadium to approval, then somehow served three terms on the city council while still working for the Bengals, then retired from politics before eventually going in with his boss on starting a new MLS team and getting a stadium built for it — one that Berding similarly promised would require no new taxes, and which ultimately cost taxpayers at least $81 million. I don’t know why you would question the secret financing models in this guy’s mind, he clearly has tons of expertise at something, even if the something he’s got isn’t good.

The NCAA has awarded a round of its 2022 basketball tournament to Cincinnati, for the first time in 30 years. Yay, Cincinnati! But this is conditional on Hamilton County making $200 million in upgrades to its arena. Boo, NCAA! But actually the NCAA’s upgrade demands aren’t that major or costly, it’s just the arena’s owner/operator who’s trying to leverage this into a major upgrade:

U.S. Bank Arena needs to add two locker rooms and greatly expand media space below the seating area if it’s going to host the first- and second-round games, Ray Harris, CEO of Nederlander Entertainment, which operates and is majority owner of the arena, told me on Wednesday…

Harris is shooting to make those changes as part of a planned massive overhaul of U.S. Bank Arena that would likely cost anywhere from $200 million to $350 million, he said.
“We’d certainly advocate the major renovation that addresses what the NCAA needs and provides additional amenities as opposed to losing events,” Harris said. “That’s certainly our hope. We think this is a great time to address all the shortcomings of this facility. It would put Cincinnati on the map to be competitive with all the major cities around us.”

Well, sure, you’d advocate that the city chip in on $200 million to $350 million of upgrades to your arena, rather than just adding two locker rooms and some media space. And what would that greater renovation entail, exactly?

[Harris] said Wednesday that the current plan to prepare for the 2022 NCAA men’s basketball championship includes tearing down the arena and building a new, larger arena in its place.

Okay, then!

Some backstory: Harris has been proposing a major overhaul of the arena for two years now, with the minor snag that he wants the county to help pay for it, and after coughing up big bucks for new stadiums for the Reds and the Bengals, spending nine figures on an arena whose highest-profile tenants is a minor-league hockey team isn’t exactly likely to be a priority. But if it’s about making the NCAA happy, and “putting Cincinnati on the map” — hey, sure, maybe somebody will buy it. Not anyone on the county commission, admittedly — commissioner Todd Portune replied yesterday, “Go do it. It’s your arena. We’ll be happy to help with permits and zoning, but don’t think that the county has a pot of money over here that we’re waiting to make available” — but maybe somebody somewhere.

Show of hands: Did you even know that Cincinnati had a basketball and hockey arena? It hasn’t had an NBA team since the Royals moved to Kansas City in 1972, and major-league hockey since the Stingers went away with the folding of the WHA in 1979. But it still has the U.S. Bank Arena, built in 1975 as the Riverfront Coliseum, and probably best known as the reason we don’t have general admission rock shows anymore.

Anyway, the arena is, according to its LinkedIn page, “a first-class, state-of-the-art venue,” and—

U.S. Bank Arena’s owners unveiled a plan Tuesday morning that showed how long-anticipated and extensive renovations could support the Downtown venue’s future.

Right, that’s what I meant, it needs $200 million in renovations to gut the place and add luxury suites and “revitalize downtown Cincinnati” and all that. Because after all, reports the Cincinnati Enquirer, “The 40-year-old arena has not undergone a major renovation since 1997”! Can’t be having that!

The arena is co-owned by theater operators Nederlander Entertainment and venue mega-managers AEG, neither of whom have said anything about how this major renovation will be paid for, though the Enquirer reports that “taxpayers will be asked to pay at least part of the bill for any improvements.” This wouldn’t necessarily be bad if taxpayers also got a share of arena revenues to help repay their investment, but something tells me that’s not what Nederlander and AEG are thinking.

Anyway, one hopes that Cincinnati and Hamilton County officials will drive a hard bargain here, and — oh, who are we kidding, this is Cincinnati. Once your elected officials have bought into the notion that having concerts in the same place with nicer cupholders is going to “revitalize” your downtown, all hope is lost. Unless you get some different elected officials.