CINCINNATI — A new arena to replace the nearly 50-year-old Heritage Bank Center would cost up to $800 million and generate a one-time annual economic impact of $1.29 billion from construction, according to a feasibility study released Monday by the Cincinnati USA Regional Chamber.
The report follows years of public debate over how to replace the former Riverfront Coliseum, whose advancing age has kept big-name concerts, NCAA Final Four events and political conventions from visiting Cincinnati in recent decades.
The study was commissioned by the city of Cincinnati in partnership with Hamilton County, The Port, The Cincinnati USA Regional Chamber and several others in the region. It was compiled by the Machete Group, a real estate advisory firm, with input from Turner Construction and architectural firms, MSA Sport and Populous.
It concluded that renovating Heritage Bank Center was not the best course of action because the site is too small to accommodate the necessary upgrades.
"That’s just under 400,000 square feet of space now," said Bill Baker, managing partner at MSA Sport. "A new arena is about 650,000 if not more so it has more back of house, more club space, more concourses. Just the nature of these building types have evolved over the past 50 years."
Instead, the study recommended a new arena on the western edge of the city's urban core. One site is the Town Center Garage, south of TQL Stadium in the West End. The other site is caddy corner to the Duke Energy Convention Center, on land that will be freed up by the Brent Spence Bridge reconstruction project.
"Both of them build on a lot of the existing activity around it," said Brendon Cull, the chamber's president and CEO. "For the Town Center Garage site, you’re close to the vibrant business district of Over-the-Rhine. You’ve got the streetcar right there. You’ve got the plan to renovate the boulevard along Central Parkway and you’ve got availability to create more housing and more activity around that area."
Cull said the convention center site could boost development at The Banks and on Fourth Street.
"You’ve got two or three parcels of The Banks that are as yet undeveloped. And you’ve got a really great historic neighborhood right next door," Cull said. "And you’ve got additional land north of the arena site that would be available as part of the Brent Spence Bridge project."
The study offers potential funding sources to cover what it expects the project will require in public financing. Based on other arenas, the study predicts private investors will cover only 30% of the cost, or up to $240 million. The remainder, up to $560 million, could come from bonds backed by revenue from sale tax, rideshare fees and “sin” taxes on cigarettes, alcohol and marijuana.
An arena project would likely compete for public resources against Paycor Stadium, where Hamilton County has proposed a $1.25 billion renovation in advance of its lease expiration with the Cincinnati Bengals.
The number and diversity of events at a new arena might make it a better investment than a renovated NFL stadium, said Adam Beissel, associate professor of sport leadership and management at Miami University.
“The number of different people that would benefit from an arena investment would be significantly higher than one for a football stadium that's open 20 days a year and really speaks to the same people over and over again,” Beissel said.
The study projects a new Cincinnati arena would attract 26 more events annually than the four-year average of 90 events at Heritage Bank Center in 2018, 2019, 2022 and 2023. It would generate an operating profit of $5-6 million if the Cincinnati Cyclones remained as its anchor tenant, double that amount if it attracted an NHL team and up to $40 million if an NBA team arrived.
“That’s a risky proposition,” Beissel said. “It's likely that it takes at least 50 years for this facility to pay itself off unless of course, it's able to secure a primary tenant in terms of an NBA or an NHL franchise.”
Cincinnati Mayor Aftab Pureval raised similar concerns last October, when he was asked about the potential of a new arena in the West End.
“I’m not convinced we need an arena,” Pureval said. “I’m not convinced that we can have an arena with good ROI for the community without an anchor tenant.”
Asked whether the study allayed those concerns, Pureval’s office provided a statement from the Mayor:
“The study shows a strong case for the importance of a new arena … Moving forward, we will need to dig into the financing and location options that were laid out, as well as better understanding the level of community support.”
The study did say the Cincinnati Cyclones and the current operator of Heritage Bank Center, Nederlander Entertainment, were on board to explore a new site and interested in partnering to get it done.
You can read the full study below:
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