They called it "Rebirth of the Riverfront," but they said the 1996 sales tax's ripple effect wouldn't end at the river. Backers promoted that the stadiums' sales tax package would:
· Spark spin-off downtown development;
· Give property owners a partial property tax refund to help offset the sales tax they pay;
· Provide millions for Cincinnati Public Schools; and
· Allow us to keep our heads high, knowing that we're still a major league city -- all at the reasonable cost of $544 million for two stadiums, not including interest.
Some of these promises came true, some are works in progress and others are difficult to measure.
"Everything that's been done in this has been second-guessed by somebody," Hamilton County Administrator David Krings says.
It's true that many of the promises -- especially the football stadium's cost -- have been raked over the coals again and again. Others, such as the economic spin-off effect, are an open question.
Project cost and spinoff development
Back when the sales tax was on the ballot, the two stadiums were supposed to cost $544 million, which would be repaid over 20 years. That financial plan was for a riverfront ballpark and a football stadium just west of the Roebling Suspension Bridge.
City council, however, wanted to use the land near the bridge for a larger riverfront project. After months of stalling -- the city controlled the land -- a compromise deal moved Paul Brown Stadium a few blocks west. The lost months tightened the stadium construction schedule.
For this and other reasons, contractors often had to go back and redo their work because the drawings weren't finished or were changed on the run. That led to a wave of change orders and millions more in costs, which weren't publicly disclosed until early 2000, several months after Hamilton County Commissioners approved them in closed-door meetings. The additions included a scoreboard that cost $6.5 million more than expected and $406,000 in modifications to make the field soccer-ready, for example.
Audits by PriceWaterhouse Cooper found that these change orders weren't being contested very strongly by construction managers. The audits also said the construction schedule was a factor but that incomplete initial drawings also created problems.
Suddenly, the $406 million football stadium project jumped in cost to $455.5 million. With limited sales tax dollars, that overrun is putting a new kind of pressure on the Great American Ball Park construction managers.
Time is always a factor, but cost is probably in the front of the mind of Mike Sieving, the county's construction project executive. He's trying hard to keep the baseball stadium cost at $280 million, not including parking and the Reds' administrative building and Hall of Fame.
A few weeks ago, however, he notified commissioners that he expected a "medium" cost increase to be disclosed in December.
The two stadiums have cost a total of $735.5 million so far, which the county began paying back in 1998 but won't finish until 2032 -- a total of 34 years, not 20. Throw in interest over the period, and the real cost for the stadiums is $1.425 billion. That doesn't even include the $68 million needed to build riverfront parking garages, the source of which hasn't been identified yet.
The massive stadium projects were supposed to create a flurry of interest in riverfront development. But the $50 million football stadium overrun used the bulk of the money needed to build riverfront parking garages, which will serve as the foundation for The Banks, the planned mixed-use neighborhood.
The work also has been hampered by a sluggish economy. The county expected a 3 percent sales tax growth -- something that occurred steadily over the previous 30 years -- to pay back the stadium bonds. But that hasn't happened since 1999. Last year sales tax revenues actually shrank by 2.6 percent.
The Port of Greater Cincinnati Development Authority, the organization in charge of developing The Banks, is finally close to selecting a primary developer for the six developable riverfront blocks, more than three years after The Banks was unveiled. Earlier this year it netted a $21 million investment from the Hamilton County Treasurer, and it's hoping for a $10 million federal transportation grant to help pay for parking. Up to $40 million can be borrowed against The Banks' future tax revenues to help build the parking.
All of this tax-funded development work doesn't impress Tim Mara, the attorney who forced a pubic vote on the sales tax in 1996.
"I have yet to see dollar one (of private investment) on the riverfront," Mara says.
The National Underground Railroad Freedom Center, due to open in summer 2004, will anchor The Banks. But Mara doesn't count this $110 million project as private investment.
Hamilton County Commissioner Todd Portune also is disappointed in The Banks' progress.
"I think that the promise of developing the rest of the riverfront has not been met," Portune says.
Portune and the other commissioners have refused to take on more debt for the project, saying enough sales tax dollars have been spent on the riverfront.
Another potential development obstacle is the Bengals' stadium lease, Mara points out. It gives team owner Mike Brown a lot of control over riverfront building heights and where and how the county can build parking for the football stadium.
Three years have passed since The Banks was proposed, but it will probably take two more years for the final riverfront development decisions to be made and for the money to be raised.
Creating and sustaining jobs
On Bengals' home game Sundays, it's difficult to find an open parking meter up to Ninth Street. Downtown bars, restaurants and hotels obviously benefit from the tens of thousands of people who come to watch the team. The same goes for Reds games; that spinoff will likely increase during Great American Ball Park's first season.
Someone had to build the stadiums, so there were some temporary jobs created. Someone also has to take tickets, serve beer and brats and play the games.
Outside those jobs, the economic impact gets murkier.
In September 2000, Cincinnati Business Courier published an analysis of the stadium contracts that found Tristate firms netted 65 percent of stadium construction spending. Sharonville-based Waltek and Company Ltd., for instance, designed and installed the glass curtain walls on Paul Brown Stadium's suites. The $4.4 million contract generated about $1 million in payroll, according to Chief Financial Officer Rich Perkins.
The company also worked on the Fort Washington Way expansion, but Perkins says the stadium contract hasn't helped the 22-year-old company -- known as Waltek for the past six years -- expand or enter new markets. Perkins says the company usually works on four or five contacts at once and that they're already known as a reliable company.
On the other hand, consider Catt Lyon Design in Clifton. The 20-year-old small graphic design firm was awarded a $225,000 contract for Paul Brown Stadium's "way-finding" system, which included signage and murals of 26 Bengals all-stars.
"We may have uniquely benefited," says Vice President Simon Lyon. "We were just at the right place at the right time and it just changed everything."
Now the firm is working on similar contracts for football stadiums and convention centers in Philadelphia; Omaha, Neb.; and San Juan, Puerto Rico, and is competing against national design firms. All this for a company that not long ago produced low-cost brochures for local nonprofit organizations, Lyon says.
Besides pushing for a western riverfront site for Paul Brown Stadium, city council also pushed Hamilton County to sign a pledge to award 15 percent of the football stadium construction to small businesses, minority-owned businesses and women-owned businesses. In that order, the county did so for 14.1 percent, 7.5 percent and 3.1 percent of all the contracts, according to Bernice L. Walker, director of the county's Small, Minority & Female Business Development.
The county took some heat in the process, settling a 1998 lawsuit for $48,000. A Syracuse, N.Y. firm filed it because the county passed up its low bid for a demolition contract for a woman-owned business.
The numbers are higher for Great American Ball Park. As of Aug. 31, the county had signed 24.7 percent of construction contracts with small firms, 11.3 percent with minority firms and 3.9 percent with women-owned firms.
Property taxes and schools
Hamilton County property owners have been getting a small percentage of their property taxes back since the tax passed, ranging from a low of 3.9 percent in 1996 to a high of 4.74 percent in 1998.
The county estimates how much in sales and property taxes it will collect, then refunds 30 percent of the sales tax revenues towards the property taxes people pay, according to Joan Gilmore, deputy director of the Hamilton County Department of Administrative Services.
Since 1997, the county has refunded $100.73 million in property taxes, including $13.06 million in 1997, $15.88 million in 1998 and a high of $18.48 million in 2001.
"(The dollar amount) changes every year because of changes in overall sales tax collections and changes in property values," Gilmore says.
There are about 190,000 residential parcels in Hamilton County eligible for the property tax refunds, according to Susan Silver, director of administration for the auditor's office. That's out of 280,000 total residential property parcels in the county.
Only owner-occupied parcels are eligible for the refunds, Silver says.
In order to make up for a property tax shortfall to Cincinnati Public Schools (CPS), the district has separate agreements with the city and the county for direct cash payments. The city's payments began in 2000 and will bring CPS $5 million a year over 20 years. The amount is tied to the initial value of $382 million for Paul Brown Stadium.
The agreement with the county isn't finished yet because Great American Ball Park isn't finished, according to CPS Treasurer Mike Geoghegan.
CPS doesn't expect another $5 million because the ballpark is smaller, he says.
"I don't think it's going to be as high as Paul Brown," Geoghegan says.
Those payments won't begin until after Jan. 1, 2004, when the ballpark will be completely finished.
Missed opportunities?
Six years after the sales tax passed, and with one stadium built and another almost finished, county residents have asked themselves "What if?" more than once.
What would the economic impact have been if the Reds' ballpark had been built at Broadway Commons, which remains an 18-acre parking lot northeast of the central business district and south of Over-the-Rhine? As of several months ago, says Councilman Jim Tarbell -- the main advocate behind Broadway Commons -- there are still 500 vacant buildings in Over-the-Rhine.
What if the sales taxes had been used to fix the city's crumbling school buildings? Or what if they'd been used to bolster the region's arts, perhaps Cincinnati's greatest remaining claim to fame?
A study-in-progress from the nonpartisan Urban Institute in Washington, D.C., found that more residents from eight Tristate counties attend performing arts events than professional sports events. The study, called the Performing Arts Research Coalition, is based largely on 20-minute surveys from 800 Tristaters taken in early 2002. It found that 62 percent of participants went to a symphony, ballet, theater or dance event compared to 58 percent who attended a sports event. The survey didn't include the visual arts, such as gallery openings.
The survey also backs the current thinking from urban development consultant Richard Florida that the young "creative class" cares more about the arts than sports -- 72 percent of survey participants aged 25 and under went to an arts event, while only 38 percent of those 55 and older did so.
The point of the study, funded by the Pew Charitable Trust, is examining both the value people place on the arts and the lifestyles of arts supporters, according to study director Mary Kopczynski.
"Arts attenders don't only go to arts things," Kopczynski says. "They tend to be the most active participants in public life." ©
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