FC Cincinnati yesterday released what it would offer Cincinnati Public Schools and the West End should it decide to build a stadium there. But the district and some community groups aren’t enthused about the proposed deal.
FCC would like the option to build its stadium on the site of Taft High School’s Stargel Stadium and on the block to its east should it win a Major League Soccer franchise. The stadium would face Central Parkway, away from residential areas of the neighborhood. The team would also like to build a 1,000 car parking garage near the site. The team is also mulling a site in Oakley and another in Newport, and says it wants to make a decision by March 31.
The CPS Board of Education must vote to approve the sale of Stargel in exchange for a new, $10 million CPS stadium on land just south of Taft. One major question has been what the district will receive in either property taxes or payments in lieu of taxes (PILOTS) from the $250 million in development associated with the stadium.
That came into focus yesterday.
Currently, the team says it will pay $100,000 a year to the district should it construct a stadium there, set to be finished in 2020.
After that, it will pay $250,000 a year for the next five years — during which time the team is expected to lose money as it recoups its $150 million Major League Soccer franchise fee (should it receive that franchise) and the $200 million it will cost to build its privately financed stadium. By MLS rules, one-third of the team’s ticket sales would go to the league.
The payments would kick up to $500,000 a year from 2027 to 2031, after which payments would be based on FCC’s profits.
But those figures are a far cry from both standard payments on recent developments or the full taxes that would be due based on valuation of the stadium, the district says.
At yesterday’s Board of Education meeting, CPS Chief Financial Officer Jennifer Wagner said that under current abatement programs offered by the city since the late 1990s, a developer building a $200 million commercial property would pay about $2 million a year in PILOTS. The full, non-abated amount due the district would be about $2.8 million a year, Wagner says.
Board members say they’re not satisfied with the offer, which amounts to $4 million in payments to the district over the next 12 years, but say they’re interested in staying at the table.
“The Board of Education will not consider a proposal to swap property with FC Cincinnati unless FC Cincinnati promises to pay its fair share of property taxes on a new stadium built in the district,” the board of education fired off in a letter to the team yesterday evening. “Any property tax abatement or exemption that is contemplated by FC Cincinnati should conditioned on the school district being made whole. And FC Cincinnati’s responsibility to pay its fair share of property taxes to CPS cannot depend on the Club’s future profits.”
FCC’s offer follows an earlier bid to pay $70,000 a year to the district, first made in a letter the team wrote in response to questions from the Board Of Education. That offer was promptly shot down in a March 9 letter from CPS attorney Dan Hoying.
“The Board was very disappointed with FC Cincinnati’s response,” Hoying wrote. “First, FC Cincinnati disclaims any responsibility to make Cincinnati Public Schools whole for its share of property taxes payable on a newly constructed stadium. You advised that a structured deal is contemplated that would exempt FC Cincinnati from paying property taxes. The Club proposes instead to make payments in lieu of taxes based on the current values of the West End parcels. FC Cincinnati’s proposed payment of $70,000 per year represents only a fraction of the property taxes that would be payable on a newly constructed stadium without a tax exemption or abatement.”
Neither Stargel Stadium nor the land proposed for its replacement generate property taxes, according to emails from the city’s Community and Economic Development Department obtained by CityBeat. Stargel’s site is owned by the school district, and the land across Ezzard Charles Blvd. where its replacement is proposed is tax abated. However, several parcels east of Stargel that FCC indicated yesterday that it will also need to build its stadium out to Central Parkway generate about $70,000 a year in property taxes for the district. A law firm that represents the team purchased many of those parcels recently for roughly $1 million.
In his letter, Hoying also laid into a proposal from the team about creating a community benefits agreement with the city of Cincinnati instead of neighborhood groups.
“In the Board’s view, a community benefits agreement should be negotiated with the community leaders who live in that neighborhood,” he wrote. “The Board of Education was willing to consider swapping parcels with FC Cincinnati and moving its existing Stargel Stadium to a newly constructed facility across the street. Without a more satisfactory response to the two issues above, however, the Board will not proceed with considering the matter further.”
The team could also opt for its proposed site in Oakley and has investigated the possibility of the Greater Cincinnati Redevelopment Authority owning its stadium, exempting it entirely from property taxes. However, Hamilton County Commission President Todd Portune has signaled willingness to explore making the team pay CPS under such an arrangement.
FCC has sketched out a new, legally binding community benefits agreement with the West End, which it announced yesterday. That agreement would include efforts to boost minority employment in the neighborhood during construction of the stadium, the prospect of funding for businesses started by residents living in the West End, a housing study to determine what kind of housing should be built on the roughly 60 parcels of Cincinnati Metropolitan Housing Authority land the team has under purchase option, soccer programs in the West End and 29 other Cincinnati public schools and other benefits.
However, neighborhood groups aren’t sure about the team’s offer.
The West End Community Council has yet to decide whether it will participate in a CBA, according to council president Keith Blake. That council’s membership swelled to more than 100 residents — most opposed to the stadium in the neighborhood — after debate over FCC’s proposal in recent weeks. The general body of the council will vote next week on that issue. The council’s executive board meets tonight to discuss its position on FCC’s CBA proposal.
Blake says that should the community council decline to participate in the CBA process, it will fall to a coalition called West End United to do so on behalf of residents. That coalition, which includes a number of other community groups in the West End and neighboring Over-the-Rhine, “rejects” the CBA proposed yesterday by FC Cincinnati.
“As of today, FC Cincinnati has yet to begin any good faith negotiations between a broad coalition of neighborhood organizations and residents for the purpose of coming together with a CBA all elected officials can be proud of,” Alexis Kidd, executive director of West End community development group Seven Hills Community Houses, wrote in a statement yesterday. “Instead, we are being told the team is writing a community benefits announcement without us, going against the entire principle of a community benefit agreement.”
This article appears in Mar 7-14, 2018.