Tuesday, March 18, 2003

Stadium mistakes not repeated


Reds more cooperative; county learned from Bengals' debacle

By Dan Klepal
The Cincinnati Enquirer

The Reds and Bengals both have new riverfront stadiums, paid for by taxpayers through a half-penny increase in the Hamilton County sales tax.

That's where the similarities between Great American Ball Park and Paul Brown Stadium - and the deals between Hamilton County and Cincinnati's two professional sports teams - end.

Consider these differences:

• There were no cost overruns for the Reds ballpark, even though the team agreed to pay for them.

Taxpayers paid $51 million in overruns at Paul Brown Stadium, plus another $1 million spent by the county in legal fees trying to get some of that money back.

• The Reds will contribute $30 million toward construction of their stadium - with money coming directly from the team's bank account.

The Bengals $26 million contribution to Paul Brown Stadium came from their fans, who purchased personal seat licenses for the right to buy season tickets. Hamilton County officials ran the seat license program and, last year, Bengals officials denied to the Internal Revenue Service that the $26 million was theirs.

• The Reds are paying more than $11 million for luxury items in the ballpark, such as statues of Crosley Field-era players, mosaics near the park's entrance, a sculpture on the side of the team's administration building and much of the Hall of Fame to open in 2004.

In contrast, the Bengals complained when the county declined - amid cost overruns - to spend additional money for unbudgeted upgrades.

In 1999, the Bengals were upset that Hamilton County refused to release funds for upgrades, which a lease provision allowed if the project came in under its $287 million budget. Construction managers advised the county against releasing the money, requesting instead that additional funds be used so they could hire more staff to ensure the stadium would open on time.

Troy Blackburn, who is Mike Brown's son-in-law and worked as the team's director of stadium development, criticized the county's decision to hold onto the money.

"It seems unseemly that (construction managers would) exacerbate the problem by requesting additional fee(s) now when ... they are arguing that the project not release any dollars for improvements or upgrades," Blackburn wrote in a June 10, 1999 memo. "This strikes me as analogous to the child that kills his parents and then asks the court for mercy because he is an orphan."

Hamilton County Administrator Dave Krings said the Reds took a much different and more helpful approach to their project. The team worked with a lease agreement that forced the Reds to pay for overruns and capped the county's contribution to the stadium at $280 million.

"With the Reds, it was a partnership arrangement from the start, both in terms of controlling the cost and producing a quality facility," Krings said.

Helping that improved attitude is a construction project that has remained remarkably free of the overruns, controversy and squabbling between the team and the county that came to define the Paul Brown Stadium project.

"To the Reds' credit, they did not push to get the kind of unconscionable deal that the Bengals got," said Todd Portune, Hamilton County commissioner. He won election in 2000 after running on a campaign that criticized overruns at the football stadium.

Portune and others say Bengals' management was more demanding than the Reds in lease and construction negotiations.

Architect Michael Schuster, who served as the Reds design consultant for the project, said cooperation defined the baseball project.

"The Reds were very cost-conscious and felt they had a responsibility to the fans and the city to make sure that we spent the right amount of money," Schuster said. "Money was never a hammer hanging over every single issue because the Reds were willing to study the issues and make decisions that were helpful."

John Allen, the Reds chief operating officer, wouldn't compare the deals. He said only that the Reds are pleased with their stadium.

"We have a very, very tight budget and in order to do certain things, the Reds are paying for a few things on our own," Allen said. "I think the learning curve from (Paul Brown Stadium) had to have a positive impact on our job."

The lessons learned include:

• The county hiring a construction project executive at more than $100,000 per year to act as a liaison between commissioners and the construction managers building the baseball stadium.

• Making sure there was sufficient contingency money in the budget for unanticipated expenses. The ballpark had a 10-percent contingency while the football stadium had just over 1 percent.

• The county hiring an outside construction auditor, at more than $500,000, to track expenses.

• Negotiating a Reds lease to make the team responsible for any overruns on the project. The lease also had no provision for financial penalties against the county if the ballpark wasn't completed on time.

• Holding all ballpark budget updates in public. That was something that didn't happen with Paul Brown Stadium until the Enquirer reported on the commissioners' practice of receiving project briefings in closed-door sessions, where they made decisions and even spent public money.

• The Reds' decision to hire a construction manager and design consultant to work with construction managers on the project.

"We were responsible for any cost overruns, so we spent some money" on consultants, Allen said. "The county will tell you it really helped out to have a voice coming from the Reds."

E-mail: dklepal@enquirer.com




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