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Facing huge budget gap, city councilman wants to reclaim funds pledged to FC Cincinnati stadium

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Posted at 3:22 PM, Apr 17, 2020
and last updated 2020-04-17 15:30:11-04

CINCINNATI — As the city faces tens of millions of dollars in lost tax revenue over the next year due to the coronavirus pandemic, one lawmaker wants to take back money previously pledged to the new Major League Soccer stadium currently under construction in the West End.

During Wednesday's City Council meeting, Councilman Chris Seelbach asked if it is possible to hold $33 million in city funds earmarked for road and infrastructure improvements around the planned FC Cincinnati soccer stadium. The council in 2018 approved a deal to reimburse the club for those upgrades to and around the stadium site at the former Stargell Stadium near Taft Information Technology High School.

Seelbach wondered why the administration was recommending cuts to human services agencies but not to other financial commitments made to other projects.

"These organizations are nonprofits who barely survive and only survive through fundraisers and people donating $25," Seelbach said. "Why wouldn't we be doing that to billionaires? Why wouldn't we be asking, I believe it was around $7 million in cash, that we gave billionaires to supplement building a soccer stadium?"

In a follow-up April 16 email between Seelbach and Budget/Finance Director Chris Bigham, the director indicated those funds have not yet been dispersed to the club. The ordinance passed in May 2018 "authorized the city to provide funding to reimburse FCC for the cost of eligible public improvements, including roadway improvements, utility infrastructure, site preparation, and a parking garage."

Bigham broke down the funding promised to the team in his email:

  • $2.5 million of Street Improvement GO Bond Proceeds from the FY19 capital budget. These capital funds can only be used for improvements within the right-of-way, including streets and other thoroughfares having a useful life of 20 years or more. Operating expenses are not an eligible use of these funds.
  • $6.383 million of Miscellaneous Permanent Improvement Revenue from Fund 757 (Blue Ash Airport Proceeds). These funds can only be used for permanent improvements, being defined by state law as property, assets, or improvements certified as having an estimated useful life of 5 years or more. Operating expenses are not an eligible use of these funds.
  • $7.1 million in bond proceeds to be issued by the Port and repaid from TIF District 4 - Downtown/OTR East. These funds can only be used for public infrastructure improvements, as defined by ORC 5709.40 and authorized by Ordinance No. 425-2002. Operating expenses are not an eligible use of these funds.
  • $17 million in bond proceeds to be issued by the Port and repaid from City’s Transient Occupancy Tax revenue. These funds can only be used as identified in the Cooperative Agreement between the City, the County, and the Convention Facilities Authority (CFA). The funds are currently authorized by Ordinance No. 248-2019 and the CFA Cooperative Agreement to be used for the limited purposes of convention center maintenance and operations, the promotion of local travel and tourism, and the stadium public infrastructure project.

Seelbach said he would introduce a resolution that would direct the administration to renegotiate the city's contract with the club in order to recuperate a portion of those funds. During that same budget meeting, Council approved withholding 25% of its typical funding contribution to area human services agencies.

As COVID-19 has swept through the region, it has eviscerated the city's earnings tax revenue, as service, retail and other industries have had to shutter the majority of their operations and record numbers of workers suddenly faced unemployment. Bigham estimated the city is facing a $15 million budget gap finishing out the current fiscal year 2020, and faces up to an $80 million budget gap next year. The next fiscal year begins July 1.

Seelbach-Bigham FC Stadium ... by WCPO Web Team on Scribd