Cincinnati crafts deal for new soccer stadium
The for-profit FC Cincinnati is close to finalizing a deal with Cincinnati for public dollars to help fund a new soccer stadium as it pursues a major league soccer franchise.
The recently announced financing plan for the roughly $212 million project will be presented to Cincinnati City Council’s budget and finance committee on Monday.
A memorandum of understanding released on Wednesday outlined the city’s $34.8 million commitment to the project. The funds would go toward infrastructure costs such as site preparation and the construction of 750 new parking spaces. The parking would be in addition to a 1,000-space garage that Hamilton County has agreed to build off Central Parkway at the northeast corner of the stadium site.
About $25 million will come from bonds secured by the city’s share of county hotel tax revenue and tax increment financing.
The bonds would be issued through the Greater Cincinnati Redevelopment Authority. The city plans to provide roughly $6.3 million from the sale of the Blue Ash airport and about $2.5 million would come directly from the city’s fiscal 2019 budget.
The team would cover the costs for the stadium construction and lease the stadium from the authority for a term of 30 years. With authority ownership of the stadium, FC Cincinnati will receive an exemption on millions of dollars in taxes over the years, including sales tax for building materials and some property taxes.
Congress, looking for ways to offset the effects of lower tax rates, considered eliminating tax exempt stadium finance in the new federal tax bill. The provision didn't make it into the final bill, which took effect this year.
Hamilton County Commissioner Chris Monzel questioned the use of public money to fund the FC Cincinnati stadium project. “Hamilton County already has two sports stadiums,” Monzel told Cincinnati local news channel WCPO. “We don’t need another.” Monzel could not be reached for comment.
The county already owns Great American Ball Park where Major League Baseball's Cincinnati Reds play and Paul Brown Stadium, home of the National Football League's Bengals. Both stadiums are funded with proceeds from a half-cent sales tax increase approved by county voters in 1996.
The plan also calls for FC Cincinnati to pay Cincinnati Public Schools about $25 million over 30 years and build the district a new stadium in exchange for land currently occupied by Taft High School’s Stargel Stadium. The CPS board approved the deal on Tuesday.
“I believe from our point of view, what we did was establish our position,” Board President Carolyn Jones told reporters after the meeting. “We were prepared to say no, and it would be done. But I honestly think, as has been stated in the media, that the West End was the No. 1 priority location. So the board had to establish its position and stick to its guns.”
FC Cincinnati is also required to develop a community benefits agreement with West End neighbors. A 15-year job retention tax credit equal to 50% of the income tax withholding of club employees is also being offered in the deal. The proposal doesn't specify how many jobs are involved or what the tax cut is worth.
The soccer club is awaiting word on whether Major League Soccer will award it an expansion team. Documents FC Cincinnati submitted to the school board indicated the soccer club's leaders are set to meet with MLS leaders on April 17, for a final decision on the team's bid.
S&P Global Ratings rate the city of Cincinnati outstanding general obligations AA and the city’s economic development revenue bonds AA-minus. The outlook is stable. Moody’s Investors Service rates the GO’s Aa2 and the economic development revenue bonds are rated Aa3 , stable outlook. The City has $601 million in outstanding GO bonds and $133 million in outstanding non-tax revenue bonds.