CINCINNATI -- The Reds and Bengals will pay rent at their sports stadiums for the first time, a deal that will trim back a tax cut for property owners but is intended to pull the stadium fund out of the red, officials said Thursday.
The Hamilton County Commission voted 2-1 for the plan designed to erase projected deficits for the next two years in the fund that pays for the stadiums. The county had projected a $16 million deficit for 2011 that was expected to grow by another $16 million in 2012.
Under the deal reached Wednesday, the Cincinnati Bengals agreed to pay $7.4 million in rent for Paul Brown Stadium over the next five years, and baseball's Cincinnati Reds will pay $2.2 million for Great American Ball Park.
The county commission committed to reducing a property tax rollback put in place when taxpayers approved a half-cent sales tax increase in 1996 to pay for the stadiums. The rollback was an incentive to get taxpayers to support the tax increase and is paid out of money the county receives from that increase, but in recent years the tax hasn't generated enough money to provide for all obligations of the stadium fund.
County commissioners David Pepper and Greg Hartmann, who voted for the deal, said reducing the rollback was a tough decision.
"But what we did takes a dire situation and puts the stadium fund on a very sound footing for several years," Pepper said.
The reduction means the owner of a $100,000 home in Cincinnati -- the county's largest taxing district, will pay $42.94 more than last year, Christian Sigman, assistant county administrator, said. The county expects to get revenue by 2012 from Ohio casinos being built in Cincinnati and three other cities and will seek about $7 million the state owes the stadium fund, he said.
Hartmann said the county was "truly facing a fiscal emergency, and we got concessions from the teams that have never been done before."
Since construction of the Paul Brown Stadium that cost $450 million with overruns, relations between the county and the Bengals have been rocky. County commissioner Todd Portune, who voted against Wednesday's deal, has said the original lease terms for the Bengals stadium helped push the county into a financial crunch. County officials in 2007 attempted to get the Bengals to negotiate a new lease, saying it was a bad deal.
Portune doesn't believe the Bengals or the Reds contributed enough to Wednesday's deal, and he had a problem with the county agreeing to give exclusive naming rights for Paul Brown Stadium to the Bengals.
"We don't need to give up revenue, or even the potential for revenue," he said.
Stadium and arena leases between sports teams and communities or companies that own stadiums vary widely, said author and attorney, Aaron Wise, who practices sports, entertainment and business law at Gallet Dreyer & Berkey, LLP, in New York City.
"Anything is possible in terms of how you structure these things," said Wise, co-author of "International Sports Law and Business."
He said government entities have been criticized since the early or mid-1990s by those who accuse them of giving away too much and making sweetheart deals with professional teams.
"The trend lately ... is for the public authorities to give less," he said. "What happens is it becomes more of a partnership, less of a giveaway."
The Reds and Bengals received concessions under the plan that are still being negotiated, Sigman said. Concessions for the Bengals include the exclusive naming rights to the stadium and a commitment from the county to fund the first $750,000 of a field replacement in the next five years. The county also would forego any additional revenue for non-football events that generate more than $150,000 a year.
The Bengals said in a statement that they were pleased that the agreement "does not impose any new charges or taxes on fans" and hope that it "serves as the basis for a more positive relationship between the two parties."
A message seeking comment from the Reds was left for Libby Korosec, a spokeswoman for Reds owner Bob Castellini. Korosec had said in a statement to The Cincinnati Enquirer, that the team's commitment "is a continuation of our longstanding history of cooperation with the county."