CINCINNATI — Hamilton County’s new lease with the Cincinnati Bengals could do a lot of good for the region by keeping the team in town for up to 21 years, bringing $470 million in upgrades to Paycor Stadium and requiring the team to pay rent for the first time in years.
But it can’t do any of those things if it isn’t a valid contract.
“In its current form, it would not be enforceable,” said Marc Dann, a former Ohio Attorney General who reviewed the lease at the request of the WCPO 9 I-Team.
Dann said the lease lacks two certifications required by Ohio law for all county contracts exceeding $20,000 in value.
WATCH: Breaking down red flags in the new Bengals lease
The county prosecutor must certify that the contract “complies with the relevant statutory provisions,” often called an “approval as to form,” Dann said. In addition, the county auditor must confirm that the necessary funds are available in the treasury. Without these certifications, Dann said, “the contract is void.”
Hamilton County declined to be interviewed for this story but responded to questions in writing.
“The auditor certifies funds via purchase orders,” spokeswoman Bridget Doherty wrote. “There are little to no direct payments to the Bengals in this lease, so there are no funds to certify at this time. As payments are required, the auditor will certify funds.”
On the issue of prosecutor certification, Doherty wrote the county is “unaware of any statutory provision, opinion of the attorney general or judicial decision that requires every county contract to be approved as to form.”
The Bengals have not responded to questions about this story.
'All kinds of risks'
After the lease was finalized Aug. 1, the I-Team began sharing the document with legal and business leaders to sample their opinion on the deal’s strengths and weaknesses.
We heard from some who think the lease is an improvement over past deals with the team, and others who are just happy the issue is resolved.
We also heard from some who think the new lease gives the Bengals too much control over riverfront development and others who raised questions about a clause that could limit the county’s use of sales tax proceeds in the future.
Dann wasn’t the first to notice the lack of certifications by the county prosecutor and auditor, but he was the first willing to discuss the issue publicly. He said the terms of the lease could be honored if no one challenges the lack of certifications, but it could also lead to big problems if someone contests the contract’s validity.
“If they’re going to spend money to secure parking spaces, for example, that money might be able to be clawed back,” Dann said. “It might be subject to an audit finding. The Bengals could decide not to honor their obligations to the contract because the argument would be that it’s void.”
Another possible outcome, said Dann, is a taxpayer lawsuit that blocks enforcement of the lease. Still another is a future county decision not to honor contract terms.
“There are all kinds of risks,” Dann said. “Right now, everybody’s happy and agreeable, but things go wrong in these types of situations. So, when they do, the last thing the county wants is for the Bengals to be able to slither out of this based on the technicality that it wasn’t properly executed.”
Although the county claims now that the certifications aren’t required, Assistant Prosecutor Roger Friedman told commissioners otherwise on April 22.
“The statute requires an approval as to form,” Friedman said during a discussion of a memorandum of understanding with the Bengals.
On Aug. 1, Friedman signed a management agreement that’s required by the lease but not the lease itself. The signature appears beneath a line that says, “Approved a(s) to form.”
Dann said the problem could be solved by adding the necessary certifications to the lease and bringing it back to the Hamilton County Commissioners for another vote.
“The approval, of course, has to take place in a public meeting,” Dann said. “They could just convene another public meeting and redo it.”
Beyond the contract’s validity, the new lease has sparked some new conversations about deal terms, including a last-minute compromise on parking guarantees for the team, a new restriction on the use of sales tax proceeds and a failure to remove language that could limit new development at The Banks.
Article 22: Future Development of Riverfront
“Let’s finish out The Banks,” said former Cincinnati Councilman Chris Bortz. “Let’s remove barriers to getting that done, not add more. And I think this lease adds some barriers.”
Bortz, CEO of Towne Construction Services LLC, is a non-practicing attorney who served on city council when Cincinnati’s riverfront development project was in its infancy. So, he’s very familiar with height restrictions and parking requirements in the Bengals’ original lease, which many have linked to a lack of progress at The Banks.
He was surprised to see language from the old lease repeated in the new lease, along with a new paragraph that says future riverfront development “must be consistent with the joint city-county urban development plan … after approval by the city, county and team.”
Bortz questions whether that language gives the Bengals veto power at The Banks.
“Does that mean if the team doesn’t approve it can’t proceed? It’s not clear. And I think in this instance, given particularly how difficult it’s been to get The Banks moving, that language should have been crystal clear,” Bortz said.
Article 29: Parking
The Bengals won some new concessions on parking in the lease that could cost taxpayers up to $875,000 per year and make it harder to develop land now used for Bengals parking.
“It’s another question mark and another potential barrier to advancing development,” Bortz said. “There may be some kind of perverse disincentive to not finish the buildout.”
The new Bengals lease requires the county to make 9,000 spaces available to Bengals fans on up to 27 “team use days” per year.
If the number falls below that “parking space minimum,” the team can claim $60 per space for lost revenue, up to $875,000 per year. If it falls below 7,500 spaces, the team can declare the county in default of the lease.
In addition to those requirements, the county agreed to “make best efforts to ensure” that 3,460 surface spaces are available to Bengals tailgaters.
The county also agreed to “use its best efforts” to make city-owned lots available to Bengals fans.
To put those contract terms in context, it’s important to know that there are currently 9,407 spaces between the Brent Spence Bridge and Hamilton County’s East Garage at 443 E. Pete Rose Way, according to the lease. So, the county is agreeing to make 96% of all riverfront spaces available to the Bengals on days when it’s hosting games and events.
In addition, the original Bengals lease guaranteed the team access to 5,000 spaces. For most of its history at The Banks, the team had nothing in its contract about surface spaces. In 2018, a memorandum of understanding called for the county to “use reasonable efforts to assure” 3,200 spaces would be available to the team for the duration of the lease.
Bortz thinks all of that could make the county less willing to fill a surface lot with new development.
“I hope that’s not going to be part of the thinking, but with The Banks, anything’s possible,” Bortz said. “If it can go wrong, it will go wrong. It’s been Murphy’s law from the start. So, I don’t think it’s going to go smoothly from here on out.”
Section 4.5 – Other County Commitments
Another clause of concern for Bortz is a three-sentence pledge not to use “any part of the proceeds” from the 1996 stadium sales tax if it will “have a material impact” on the county’s lease obligations or “maintenance by county of a first-class stadium facility reasonably comparable to other NFL stadia.” Although the next sentence states the “team shall have no authority or discretion over use of such proceeds,” Bortz said the clause is confusing enough for the Bengals use as leverage.
“There’s some wiggle room there,” Bortz said. “What is a comparable stadium? Comparable stadium in a similar market? Comparable stadium to the entire NFL? You can drive a truck through the holes in that.”
Bortz is a member of the Hamilton County Growth Alliance, which has promoted the use of sales taxes to finance a new arena downtown.
“Hopefully, anything that the voters approve or the county commission approves will trump that, recognizing that it’s up to the voters how sales tax is spent,” Bortz said.
Doherty wrote that Section 4.5 does not “give the team any control over how the county allocates sales tax revenue, nor does it prohibit funding other major projects, such as upgrades to Great American Ballpark, or programs like property tax rebate. The clause is not new or unusual in professional sports facility agreements — it’s intended to protect the county’s ability to meet its contractual commitments, not to limit our broader budgeting authority.”
