Bengals Stadium Bites County

In a bad deal gone worse, Hamilton County, Ohio – home of the NFL’s Cincinnati Bengals – not only continues to foot the bill for constructing a stadium 11 years ago but more than a decade later is devoting more than 16 percent of its annual budget to pay for it.

Originally budgeted at $280 million, the cost to the local government didn’t just soar, it skyrocketed. The Wall Street Journal calls it one of the worst deals ever struck by a local government to keep a professional sports team from moving to another city.

And now, thanks to alleged insufficient financial controls and an agreement to pick up all operating and capital improvement costs, a Harvard University professor who studies stadium finance says the public cost is nearly double the original estimate.

Judith Grant Long arrives at a figure of $555 million once the cost of other expenditures, including a special elevated parking structure, are factored in, according to the Wall Street Journal.

But it gets worse. Hamilton County, like most local governments, is in a financial bind with the ongoing economic slowdown and has no means of cost cutting on the stadium as it does with, say, teachers’ salaries or its police force. The Journal estimates that Hamilton County’s 2010 stadium spending was $34.6 million, out of a total budget of $212 million. That’s 16.4 percent.

If taxpayers don’t already suffer buyer’s remorse, Hamilton County must soon roll back a property tax break it promised voters back in 1996 as an enticement to approve the plan to pay for two stadiums in 1996. The other, baseball’s Great American Ballpark, was completed in 2003 within budget and today largely pays for itself.

An analysis by the Wall Street Journal reported that of the 23 NFL stadiums built between 1992 and 2010, only one other involved deals similar to Hamilton County’s – a single county government willing to foot the entire debt burden of an expensive, shiny new stadium.

Some blame the deal on the willingness of city officials – and taxpayers – to go deep in the well in order to keep a team. And in the 1990s, plenty of NFL teams leveraged perceived threats from competing cities to get sweetened pots from the home crowd.

To help finance Paul Brown Stadium, Hamilton County assumed more than $1 billion in debt by issuing its own bonds without any help from surrounding counties or the state, according to the Journal. Next year, officials expect payments to stadium debt service to create a $30 million budget deficit.

“The Cincinnati deal combined taking on a gargantuan responsibility with setting new records for optimisitic forecasting,” Stanford University economics professor Roger Noll told the Journal. “It takes both to put you in a deep hole, and that’s a pretty deep hole.”