Cincinnati– Ray Harris, COO of Nederlander Entertainment, which owns and operates the arena, said Thursday in a sit-down interview with The Enquirer that the $370 million rebuild would tear the current structure down to the existing pad and take two years. It could bring events such as the NCAA men’s basketball tournament to the city.
The proposal, however, met with immediate skepticism from officials whose support would be critical to making it a reality. Hamilton County Commissioner Todd Portune said Thursday evening he hadn’t heard details of Nederlander’s plan and is focused on taking a bigger look at all the region’s needs.
“We’ve all been pretty firm, we’re not looking at any sales tax financing of U.S. Bank Arena,” Portune said.
You want the public to decide the fate of a $370M arena tax payers will have to pay for?
Tear it down.
That’s a pretty rash reaction to the ultimatum when there is actually a lot to digest with this story. It’s not a Paul Brown style deal from what Ray Harris has said. Keep the “Ray Harris Is Delusional” card in your back pocket as a reminder for yourself when you start to think this is a good deal in a few minutes.
Break Down The “Deal”
Ray Harris laid out what he thinks is a deal thinks the city and the taxpayers can get behind. County Commissioner Todd Portune doesn’t really care for what the deal is. Here is the breakdown of the deal that Harris has proposed.
Under the latest Nederlander plan:
- Voters would be asked to extend for seven years a quarter-cent sales tax now being used to renovate Union Terminal. That would bring in an estimated $313 million.
- Out of that money, the Port of Greater Cincinnati Development Authority would buy the arena from Nederlander for $35 million to $40 million, meaning it would be owned by the public. The Port would pay Nederlander to operate the arena. Nederlander would lease space there for the Cincinnati Cyclones.
- Increased events would bring in $34 million over six years, which would also be used for the renovation. After that, the revenue would flow to the Port, which has long sought an ongoing stream of revenue.
- Over six years, increased parking would bring in $14 million and the admissions tax $9 million. Both would go toward the project.
First things first, that .25% tax Hamilton County tax payers approved for the Music Hall renovations would stay around for another 7 years. In all likelihood there will be a Metro Bus tax added here in the near future too. So will tax payers be happy with increased tax rates? What if the city approves an FCC stadium issue to be on the ballot and the taxpayers approve that? Hamilton County taxes would be on the rise again. Personally, I don’t think the FCC issue will even make the ballot.
The city would be the owner of two stadiums and an arena under this deal. They’d buy the arena from Nederlander for $35-40M which seems excessive. As the arena currently sits it’s worth the price of the land and that is it. To keep it simple, the county pays for the new arena, the county has to buy the land and the county pays Nederlander to operate the arena while leasing space to the Cyclones. Remember the Cyclones are owned by Nederlander. Through it all though it looks like Nederlander makes out the best in this. They don’t have to pay for a new arena, they sell the old arena to the county and then the county pays them to operate the arena. Pretty sweet deal when you can get a new arena for essentially zero investment.
They talk about the $34M over 6 years to help pay for the arena and then after that it goes to the port. Fair, but is $5.67M a year really worth the hassle of having ANOTHER sporting venue on the books? The benefits of it are great but it’s still $370M plus interest. Not to mention the county/port would have to pay for all future enhancements and upgrades as well. What if holographic score boards become a thing?
How To Pay For It
Proposed sources of $370 million in improvements:
- Extension of Union Terminal sales tax: $313 million
- Revenue from building events: $34 million
- County parking revenue: $14 million
- City admissions tax: $9 million
That’s a little breakdown of the how the arena would be paid for.
Getting a new arena would be huge for the city. It something we truly need to take that next step into being a national player for big events. The RNC passed on Cincinnati because current USBA is a dump. The NCAA Tournament isn’t coming here unless this project gets done. What comes along with a new arena is hopefully much better concerts and events that the current USBA can’t attract because again, it’s a dump. The biggest problem with this is the only permanent resident of the arena is an ECHL hockey team. If the city was promised an NBA or NHL team then maybe people would support this. When you tell them you can have better concerts and events no one gets that excited about it. Hey you have all this money, you bought a really nice hyper car but you probably won’t want to use it. That’s what taxpayers are facing.
Cincinnati and Hamilton county also have public works projects that need to be addressed before any new stadiums should be built. The Western Hills Viaduct is going to fail at some point. A shiny glass arena is cool but when a Corolla falls off the viaduct and smashes a kid it’s not so cool then. The Brent Spence is a major issue but that’s more of a state issue, same thing though. When 140 cars plummet into the crystal clear water of the Ohio I’m sure they’ll be easy to find. Oh right, it’s the Ohio.
Both sides make sense. A new arena would be huge for the region. Kill the arena because it’s ugly and the city shouldn’t have to pay for it is also reasonable. It’s highly unlikely this gets done. If you had your hopes up the NCAA Tournament would actually be here, well to quote the President “you’re dumb as a rock.”
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