FC Cincinnati wants to make a deal with taxpayers. So what would you get for your money?

Posted at 5:00 AM, Aug 09, 2017
and last updated 2017-08-13 07:47:18-04

CINCINNATI -- What makes modern sports stadiums so expensive? Here’s what taxpayers would be getting for their money if FC Cincinnati wins its goal of $100 million of public financing.

The basics 

FC Cincinnati wants to build a 25,000-seat stadium in one of three places: Cincinnati’s Oakley or West End neighborhoods or on Newport's riverfront.

Rendering of FC Cincinnati stadium designed by MEIS Architects.

The stadium would be horseshoe-shaped, and seats would be in a single bowl in the tradition of European soccer stadiums. Private suites would also be in the mix.

The stadium renderings have been designed by Dan Meis of MEIS Architects, which also designed Paul Brown Stadium, and was inspired by Bayern Munich’s Allianz Arena.

Allianz Arena

In the renderings, the façade glows with LED lights on translucent material, and a canopy stretches above the seats. A berm allows the stadium to hold an additional 5,000 people.

FC Cincinnati estimates the project will cost $200 million as designed. The team has started discussions with the Port Authority of Greater Cincinnati to possibly own the stadium. 

RELATED: Port Authority getting into the soccer stadium business? It's on the table

How does it compare to others?

Major League Soccer franchises live in a wide variety of stadiums and settings, which has translated into wildly different costs. The days of saving money by building stadiums that seat fewer than 20,000 appear to be gone thanks to MLS rules that require at least 20,000 seats for new franchises.

Some share astronomically expensive stadiums with other pro teams, including New York City FC, which plays in the Yankees' $2.3 billion stadium. The Seattle Sounders share the National Football League’s Seattle Seahawks’ $595 million stadium.

Others built or renovated their soccer-specific stadiums for a lot less money. Three new stadiums built since 2012 were completed for $155 million or less.

Others are part of a larger soccer complex, including the Vancouver Whitecaps, which plays in the $514 million National Soccer Development Centre. That facility is also used by the University of British Columbia’s soccer team and multiple youth and teenager clubs.

D.C. United is building a $300 million stadium scheduled to open in 2018.

Why $200 million?

FC Cincinnati President and CEO Jeff Berding told WCPO that the team first decided what was necessary for a successful venture and then figured out how much that would cost, not the other way around.

Since the club averages about 20,000 fans playing in the United Soccer League, they’re anticipating a bump in attendance that justifies a 25,000-seat facility with the ability to add 5,000 more.

“We worked with architects so that it could be done very economically. We want the iconic LED membrane, which is not necessarily more expensive than concrete or brick,” he said.

Berding aspires to draw high-profile soccer matches to the stadium to maximize its use. When the U.S. men’s national team plays Mexico, he wants that game here, he said.

“If the United States gets the World Cup, they’re going to have games throughout the country, and we put a bid in to draw that into Cincinnati,” Berding said. “You’re going to have to have a nice stadium to have those opportunities.”

It should be noted that when the United States last hosted the World Cup in 1994, games were played in nine cities with the smallest venue being 53,000 seats. However, current World Cup qualifying games are often played in MLS stadiums.

Similarly, FC Cincinnati would seek to host Olympic soccer games as part of Los Angeles's 2028 summer games.

What goes into a nice stadium?

“The design is part of it, having luxury seating and premium seating in the way of club seats, a big supporter section that generates noise, a grass field, putting it in a dense urban environment (with higher land costs),” he said.

Skeptics counter that the price is unnecessarily high because the team isn’t paying for the whole thing.

“The publicly financed ones tend to be more extravagant,” Roger Noll, Stanford University economics professor emeritus, said. “If you can get the public sector on board, you have the possibility of building a monument to yourself.”

Noll cited Cincinnati’s own Paul Brown Stadium as the poster child of unnecessarily expensive projects. “You’re famous worldwide,” he quipped.

Martin Greenberg, a veteran sports law attorney in Milwaukee, also cited Paul Brown Stadium as a cautionary tale as the Tri-State contemplates what a publicly subsidized deal should look like.

“Cincinnati should be on guard because it is a classic overrun story with Paul Brown Stadium,” he said. “You are the national example of what not to do.”

But for any new MLS stadium, he said there are multiple cost drivers, including:

  • State-of-the-art design to get approval from MLS
  • Extended acreage for related development. “All of these stadiums today are more than a stadium. They’re a real estate development because its’ become more of a public-private partnership,” Greenberg said.
  • Creating an intimate and European-style stadium atmosphere
  • Enhanced seating -- suites and clubs
  • Outdoor gathering space for fans who march and rally before the game
  • Lots of interactive technology. “Since the Millennials are dictating the future of America, technology is needed and expensive,” Greenberg said.

Job creation and secondary development

There’s been passionate disagreement whether the returns justify the costs to taxpayers as long as there have been stadium deals that use public money.

WCPO talked to Noll and James T. Bennett, a George Mason University economics professor, who are both in the camp that says it’s not worth the cost.

Bennett, author of "They Play, You Pay: Why Taxpayers Build Ballparks, Stadiums, and Arenas for Billionaire Owners and Millionaire Players," said MLS stadiums don't differ enough from baseball or football to justify public subsidies.

“The fat cats want Joe Sixpack to pay for their skyboxes," Bennett wrote in an email. "Joe struggles to buy tickets, if he can afford them. The jobs 'created' are bull**** jobs: groundsmen, peanut/hotdog/beer sales, ticket office. Low pay, part-time.

“Basically, it's a rip-off from start to finish. And the political bull**** about 'civic pride' is just that. Somehow the town had pride even before the team even showed up,” he said.

Noll said the standard business model for successful stadium development tries to capture as much income inside the stadium as possible, not to let money bleed into the surrounding neighborhood.

The idea of neighborhood job creation “is just not true. Sports facilities are constructed to minimize the extent of that happening,” he said. “The only way you can actually get a neighborhood benefit like that is to ensure that the stadium itself doesn’t have adequate concessions.”

Noll said very few such stadiums exist, though Boston’s Fenway Park is one. Voters there have rejected attempts to expand concessions inside the historic stadium, so the club has accommodated fans by giving them easy in and out access to outside vendors during the game.

Berding bristled at this characterization, urging academic economists to stay in their “ivory towers” if they can’t recognize real-world benefits to stadium projects.

“They’re clueless,” Berding said of academic economists in general.

Having attractive stadiums that house popular sports like MLS draws high-skilled professionals to town, he said.

“In today’s economy, talent chooses cities. Where would they like to live? You better have a city that is top of mind. Economists may not understand this, but professional teams put us on the map,” Berding said.

The national and international praise that FC Cincinnati has garnered piques the interest of the kinds of companies that the Tri-State is competing with others to lure, and also for individual workers, he said.

"(A skeptical economist) isn’t in the meetings that REDI asks me to sit in where they’re trying to woo foreign  companies to Cincinnati," Berding said.

Asked to comment on Berding's assertion, REDI President and CEO Johnna Reeder said, "We often call on our sports and arts communities to help sell the region to business prospects. Just as we’ve called on FC Cincinnati to sell the ‘why’ of the Cincinnati region, FC has called on us to sell MLS on why it should expand a franchise here. It’s a great example of how businesses and the community connect in the Cincinnati region."

Greenberg said the best deal for a community is a stadium that is financed without direct public investment. But if it is to be owned by a public entity, as FC Cincinnati is seeking, he said taxpayers should demand that responsibility for the stadium's operation, upkeep and upgrades stay with the team, not with the public. The team gets the profits, but it shoulders the cost, too.

"Whatever dimes come out of this stadium are captured by the team," he said. It is the desire and standard of the industry to capture 100 percent of those revenues. On the other hand, the expense of operating the facilities, including putting up money for replacements is responsibility of the team," he said.

Berding said it's too soon to go into details about how a deal is structured, but he said he's open to the team or a private third party being responsible for the upkeep of the stadium. He likes the idea of the team being responsible for construction because it can then prevent and control cost overruns.

As for spillover into the neighborhood, Berding challenged WCPO to talk to bar owners near Nippert Stadium, where FC Cincinnati currently plays home games.

We did.

Old bar, new tricks

John Harten, a co-owner of the historic Mecklenburg Gardens on Highland Avenue, said FC Cincinnati has been a boon to his restaurant and beer garden. The only Cincinnati bar older than Mecklenburg's is Arnold's Bar and Grill Downtown.

Harten paid $400 or $500 to FC Cincinnati to become an official pub partner, and he expected 12-20 patrons to show up before the first-ever home game, and he scheduled a single bartender to take care of them.

Instead, 100 thirsty fans showed up.

“We had people out the gate in line to get beers,” he said.

Now, Harten hires three or four bartenders to accommodate fans before and after home games. He has upgraded his computer system, added another cash register and sells beer and food at a temporary kiosk in the beer garden.

“They start to come four hours before the game itself and start drinking beers. Ninety minutes before game time, they start chanting, playing drums, getting everybody stirred up. Forty-five minutes before game time, they start marching from Mecklenburg’s to Nippert and go past other pub partners and pick up people on the way. It’s a lot of fun,” he said.

The crowds for away games are more modest, drawing maybe 30 or 40 fans to watch on television, Harten said. He expects home game business to drop off a lot if the team builds a stadium farther away.

Berding signaled in a meeting with WCPO’s editorial board that FC Cincinnati intended to welcome other community uses of the stadium when the team wasn’t using it, including holding high school playoff games there and staging concerts.

Noll conceded that opening up a publicly owned stadium to such events would bolster taxpayers’ return on their investment. And he said a 25,000-seat stadium is sized better for concerts than mammoth football stadiums.

“There are very few things that can draw 60,000 people, but there are a lot of things that can draw 20,000 or 25,000,” he said. “A soccer facility has a better chance of drawing events.”

Still, he cautioned that Cincinnati’s cold weather limits the time events can be held there.

“You’re not in California, Texas or Florida, so there’s going to be a big hunk of the year that it’s going to sit empty,” Noll said.

Greenberg, 72, tried unsuccessfully to draw an MLS team to Milwaukee in the early 2000s when he said the franchise fee would have been a relative steal at $5 million to $10 million.

“This may be the international wave of the future, and we may see more international tournaments. I think younger people are taking it seriously,” he said. “The Morgan Stanleys and U.S. Banks of the world are putting their money into this sport, and they don’t invest where they don’t expect to make money.”

While he didn’t grow up watching soccer, he sees how young adults are flocking to it, especially in light of a growing body of evidence that alarming numbers of NFL veterans experience brain damage.

“There may be some future to this,” he said.

Bob Driehaus covers economic development. Contact him and follow stories on Facebook, Google, and Twitter.