Could ticket tax or hotel tax be key to funding FC Cincinnati stadium?

Could this tax pay for FC Cincy stadium?
Posted at 5:53 PM, Nov 09, 2017
and last updated 2017-11-11 00:57:35-05

Could a ticket tax raise the $100 million FC Cincinnati says it needs to build a $250 million soccer stadium and earn a spot in Major League Soccer?

That's one of the questions FC Cincinnati general manager Jeff Berding said he and city leaders will grapple with over the next few weeks as an impending deadline to present MLS with a stadium plan nears.

The club is more seriously considering building its stadium in Oakley or Newport, Berding said. Staying in Ohio, he cautioned, hinges on the public kicking in $100 million for the new field.

RELATED: FC Cincinnati has eyes on bigger stadium in Oakley

Berding ruled out using sales tax -- which the county raised in 2001 to finance the construction of Paul Brown Stadium and Great American Ball Park -- but said the team is exploring other taxes.

The admission tax the city collects on tickets sold at concert and sports events is one the team is looking at, Berding confirmed Thursday. 

"FC Cincinnati didn't exist two years ago, so there was no admission tax generated from professional soccer," Berding said. "We do think it's appropriate look at the admissions tax and the revenue we generate with growing attendance to have that be a part of the financing puzzle."

Cincinnati charges a 3 percent admission tax on tickets sold at baseball or football games, as well as at concerts. The money goes to the general fund -- the bank account the city uses to pay for things like police and repaving roads. In 2016, that tax generated nearly $5.5 million for the city.
The city's current professional sports teams account for about half of those funds -- roughly $3 million between ticket sales from the Bengals and Reds -- every year. 

Berding said the team is also hoping to score a tax increment funding deal from the city or county to help fund the stadium, but he acknowledged that alone will not make up the $100 million the team needs. The city or county would need to approve the creation of a tax increment finance district, which would dedicate any additional property taxes stemming from the new development surrounding the stadium to pay for its construction.

Berding said the ticket tax isn't the only funding the team is hoping city and county leaders will consider.

When asked specifically about the possibility of an increased hotel tax, Berding said: "I would offer we have a couple different financing opportunities and we're in the process of vetting them now. ... We're not talking about using the county sales tax, we're not talking about putting a new tax in place on the residents of this community."

The ticket and hotel tax appear to be two of the most viable options to fund a new stadium. Neither would tax the residents living here on their property bill or the purchases they make every day. Still, both would need approval from public leaders. 

Under state law, the county and city can each collect a hotel tax of their own but -- here's the kicker -- both already collect more than state law allows.

If you stay in a hotel within city limits you pay a 4 percent city hotel tax and a 6.5 percent county lodging tax. That's higher than what travelers pay to stay in Cleveland or Columbus hotels.

Because the county's hotel tax is already maxed out, any increases to it would require approval from the statehouse.

A ticket tax, however,  could cut the county commission, which has given paying for a new stadium an ice-cold reception, out of the equation. The city taxes the tickets.

Hamilton County Commissioner Chris Monzel said in an interview Thursday that the prospect of a financing deal between the city and soccer club that could be announced as soon as next week was news to him.

Last he heard, the county was still working with FC Cincinnati to explore using Paul Brown Stadium, where the Bengals play football, as an option.

"That was a shocker," Monzel said of Berding's Wednesday night announcement. "I'm just curious what the plan is, right? I think the city has to be a majority player in this, so I'm happy to hear that it sounds like that is something that is there."

Berding dismissed suggestions to use the county-owned Paul Brown Stadium for professional soccer, saying Thursday, "It doesn't work.”

Hamilton County Commission President Todd Portune, however, disagreed.

"We don't need a third, public stadium in Hamilton County that's only going to be used but a few days a year," Portune said. "Frankly, the last conversations we had with FC, they were working toward that goal (of using Paul Brown) with us. Today's deviation from that is an interesting frolic and detour."

Up until Wednesday -- the day after Cincinnati's mayoral and council election came to a close -- FC Cincinnati had been pressuring the county to nail down a funding deal for the stadium.

After Berding unveiled the team's stadium design in June, he led a parade of soccer enthusiasts into a county meeting. Fans started a letter-writing campaign to commissioners.

The city's leaders, however, never took the stadium issue up in a public meeting.

That will have to change -- and soon -- Berding said.

"It's time for us to move ahead," Berding said. "Literally, we have a month ... There will need to be votes from elected officials."

Berding declined to speculate what kind of support he has for soccer stadium plans on council.

In an interview Thursday, Vice Mayor David Mann said hotel or ticket taxes to help fund the stadium are good options for council to consider.

Mann said he also believes the city and county taxpayers could help FC Cincinnati build parking garages and roads surrounding the stadium in the same way the city has helped with other big developments, such as The Banks.

"It would be easy to develop parking, and one more tremendous coup for Oakley," Mann said. "We happen to be season ticket holders -- we love going to games -- haven't seen that kind of excitement about sports games in forever. What's not to like about a new, well-supported team?"

RELATED: Is Oakley the right fit for FC Cincinnati?