Friday, September 28, 2001

The Banks on financial rocks


County too poor to start riverfront project

By Dan Klepal
The Cincinnati Enquirer

        Hamilton County won't have the money next year as planned to start building a riverfront neighborhood known as The Banks.

        Plunging sales tax revenues and open-ended commitments in the county's stadium deals have left the county too cash-strapped to front the Port of Greater Cincinnati Development Authority money to begin building the $700 million project.

        The county's budget director, Suzanne Burke, told Port Authority members that she will recommend county commissioners vote against ideas that would funnel cash to the authority for the development.

        It is unclear how long the project will be delayed.

        The county is committed to building about $70 million in parking garages to lift the development out of the flood plain, but only if the cash becomes available.

        Port Authority members have been huddling with county officials for months trying to find a way for the county to front it money. The authority asked county officials to pledge all excess sales tax revenue beyond what they need to pay for the new sports stadiums.

        County officials need an average 3 percent growth in sales tax receipts every year to pay the bills. So far this year, receipts have fallen 3.5 percent. Last year, the receipts grew at less than 2 percent.

        “It would not be financially prudent of me to recommend (to commissioners) that sales tax revenues in excess of 3 percent be pledged to The Banks for additional structured parking,” Ms. Burke said in a letter to Port Authority members last week.

        Ms. Burke said any excess sales tax should stay in county coffers to pay for unexpected bills, such as:

        • Operating and utility cost fluctuations at Paul Brown Stadium.

        • Costs from a lawsuit filed against the county by the Firstar Center over ballpark construction limiting its operations.

        • Payments to the Cincinnati Public Schools in lieu of property taxes on the two stadiums.

        • Lease requirements with the Bengals that could force the county to add expensive gadgets to Paul Brown Stadium if other National Football League teams get them.

        • Early retirement of bonds sold to build the stadiums — an idea Commissioner Todd Portune wants to pursue.

        “I believe there may have been expectations that the Port would be able to identify a financing plan that did not require a commitment backed by the county's financial structure,” Ms. Burke's letter says.

        Jack Rouse, chairman of the Port Authority, still hopes the project can break ground next year. But that will be more difficult without county cash, he said.

        “I just choose not to accept (delay) as an option,” Mr. Rouse said, adding that there are two blocks along the riverfront that can be developed without garages.

        “But it's going to be difficult to get the project started without some general agreement in principle,” he said.

        The three county commissioners will have the final say on whether to approve any interim financing plan.

        Commissioner Tom Neyer, whose company wants to develop the project, may not get to vote on the matter. But he said the project should move forward on schedule.

        “I continue to believe The Banks is a long-term vision we can help create today,” Mr. Neyer said. “I have confidence in the economy and believe we should express that confidence with a commitment.”

        Hamilton County prosecutors are researching whether Mr. Neyer can vote on matters related to The Banks. An anti-tax organization has said it will file a complaint with the Ohio Ethics Commission if Mr. Neyer tries to vote on matters involving The Banks.

        Commissioner Todd Portune has said he doesn't think there is enough money to pay for the parking garages. Mr. Portune believes the only way to get the project started is if some of the county's financial commitments — such as renegotiating the county's lease with the Bengals — are reduced.

        “All of the stakeholders — the county, the city, the Port and the teams — need to be willing to sit down and talk about what each is willing to do that will allow us collectively to make this happen,” Mr. Portune said.

        Commissioner John Dowlin is out of town this week and was unavailable for comment. But he has repeatedly expressed concerns about the county's financial situation.

        Port Authority members are evaluating more than a dozen development firms that have expressed interest in the project. They hope to narrow the field by the end of the year, asking a handful of the firms to present more formal ideas on how they would build the project.

        Tim Sharp, interim president of the Port Authority, said Ms. Burke's letter was not a surprise and vowed that the project would happen.

        “We will find a way to get the garages built, one way or another,” he said.

       



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