County inks stadium upgrade deal with Cincinnati Bengals

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Hamilton County, Ohio, announced a deal Thursday to chip in $350 million in county funds toward the $470 million cost of renovations to Paycor Stadium, home to the National Football League's Cincinnati Bengals.

The $350 million will be bond financed, a spokesperson for the county said.

The deal fleshes out the core terms of a new lease agreement. It requires the Bengals to contribute $120 million and commit to 11 seasons at 25-year-old Paycor beginning in 2025. 

The team must also pay for any cost overruns on the modernization project, and for the first time pay rent: $1 million annually for the first three years, and $2 million annually thereafter, with inflationary increases.

The deal also includes a formal community benefits agreement between the team and the county. The county spokesperson said they don't have the terms of that agreement yet, and are going to work out those details in the final lease agreement.

County officials said in a statement that the county will seek state funding, as well. The county spokesperson said that would be on top of the county's $350 million contribution, with the goal of making the project bigger. 

County officials may be looking for as much as $350 million or more from the state, but are waiting for the state budget to reach the governor's desk. There are already some parameters in the state budget regarding sports stadium funding, the county spokesperson said.

Any expense of public funds on projects for private sports franchises should take into account the opportunity cost of that investment, said Adam Hoffer, director of excise tax policy at the Tax Foundation, a Washington, D.C.-based nonpartisan tax policy nonprofit.

"Most U.S. cities are desperate to find additional funding for programs like education and transportation, whose economic benefits are well-established," he said. "The academic research consensus is that stadium construction's promised tangible economic benefits — economic growth, income growth, wage growth, employment growth, and higher tax revenues — do not occur the way that sports teams claim."

County officials framed the deal as a win for the public, because the previous deal required taxpayers to cover 94% of the costs of stadium construction and gifted the Bengals control of the stadium rent-free, according to the Cincinnati Enquirer. 

The earlier deal also gave the Bengals a veto on riverfront development and subjected the county to uncapped liability, according to a press release from the county.

Earlier this year, the Bengals had hinted that they were keeping their options open around re-upping their lease if local officials did not help out with stadium upgrades. Bengals Executive Vice President Katie Blackburn said at the annual NFL meetings that "our stadium obviously needs to continue to be maintained appropriately and… we're playing it one day at a time… We have to see where it all goes."

The Tax Foundation's Hoffer said teams threatening to leave may have the upper hand in negotiations not for any economic reasons, but because politicians are afraid to let them go.

"There doesn't seem to be one metric for how substantial or what percent of the total construction cost a subsidy will be," he said. "Each project is a negotiation between the team and elected officials. And while there may be no net negative outcomes following a professional sports team departure — real estate prices in Seattle and Charlotte actually increased after the teams moved away — there may be political consequences."

In a statement, County Commission President Denise Driehaus called the deal "a smart, future-focused deal that reflects our responsibility to the taxpayers and our commitment to keeping the Bengals here without raising taxes."

Commission Vice President Stephanie Summerow Dumas said in a statement, "This agreement strikes the balance we needed — protecting public dollars while ensuring long-term stability for our riverfront and regional economy. It's a deal that begins to right the wrongs of the past by taking the risk off the County and puts us on a stronger path forward."

Emily Parker, director of communications for the Bengals, said "we will share more details about stadium renovations closer to the season," and referred all questions about financing to Hamilton County.

"We thank the Hamilton County commissioners for supporting this agreement to ensure Paycor Stadium remains an excellent venue and a focal point for Cincinnati's riverfront," the Bengals' Blackburn said in a statement announcing the deal. "We are proud to call Paycor Stadium our home and to keep our future here in Cincinnati."