Cincinnati Soccer Scores Public Financing, Expansion Finalist Nod

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By Alex Ebert

A resounding “Goal” echoed through the Cincinnati City Council room after minor-league FC Cincinnati secured the latest part of a $52 million public-finance agreement that put the team within striking distance of a Major League Soccer franchise.

That cry wasn’t from the crowd—it came from a councilmember’s microphone as the city government joined Hamilton County Nov. 29 to seal a deal for public support for infrastructure development surrounding a proposed $200 million, 21,000-seat stadium. In total, the city pledged up to $37 million of existing tax money and tax increment financing (TIF) incentives, and the county has offered $15 million to build a parking garage near the stadium.

The votes came the very same day Major League Soccer named Cincinnati as one of four finalists for two new pro teams in the league’s expansion. When the league decides later this month on winning teams, one of the requirements is concrete planning for a soccer-specific stadium, which has become a drawn-out and contentious process in the Queen City.

Twice-Bitten, Not Shy

FC Cincinnati was treading a well-worn path this year as the team asked for $100 million in public incentives to build its stadium. Two other Cincinnati venues—Paul Brown Stadium for the NFL’s Bengals and Great American Ballpark for MLB’s Reds—have relied on millions in county sales tax for their construction or upkeep.

For Councilmember P.G. Sittenfeld, this stadium also represented a hasty use of public funds from existing hotel taxes or TIFs that he believed should be used elsewhere.

“I do feel like FCC and Cincinnati’s grass roots soccer movement absolutely represents what’s best of our city, but I believe that showing little public interest and draining one of the city’s reserve accounts represents an unvigilant way of governing,” he said before casting a no-vote.

But other councilmembers and Mayor John Cranley (D) said the city had to take calculated risks if it wanted to play in the “big leagues,” and that government support would only be for local infrastructure and wouldn’t involve any new taxes.

“We had about a week on GE, and we did it unanimously. A couple months ago we were asked to weigh in on Amazon.com, and we pitched in together,” Cranley said in the meeting. “Big cities have to be nimble, we have to move quickly to get things done. And I think this is a big thing worth getting done.”

Councilmember Charlie Winburn agreed, arguing that to play on a national stage, the city has to invest in big projects.

“I know my friends won’t like it, and they can either go to heaven or to h-e-l-l-o, because this is the right thing to do,” Winburn said to laughs from the audience. “People say we want to be big, we want to be known all over the world. Well, this is your opportunity to be big again.”

Final Four

Cincinnati joins Detroit, Nashville, Tenn., and Sacramento, Calif., as the finalists for an expansion spot. And those don’t come cheap.

On top of the $150 million each team must pay the league to join, the league also prefers a soccer-specific stadium so that teams can capture more revenue than through shared spaces. That might be a determining factor against Detroit, which recently scrapped its plan for a soccer stadium and is pitching using a newly renovated Ford Field for both the NFL’s Lions and its soccer team.

FC Cincinnati estimates it could invest up to $350 million for the professional bid and stadium project. And while it initially asked for $100 million from Cincinnati, the team has been supportive of the Cranley-led deal to get existing public money from a hotel tax to support the smaller $52 million amount. Some of that money is contingent on area-wide hotel tax revenues, so it could be even smaller.

Contender Nashville is issuing between $200 million and $225 million in bonds to erect a 27,500-seat stadium. Cranley said before the vote that there’s no way the city would be able to compete for the bid without public financing.

To contact the reporter on this story: Alex Ebert in Columbus, Ohio at aebert@bloomberglaw.com

To contact the editor responsible for this story: Cheryl Saenz at csaenz@bloombergtax.com

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