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Sunday, August 13, 2000

The deadline deals that built a stadium


Seven years in the making, Paul Brown Stadium almost didn't happen

By Dan Klepal
The Cincinnati Enquirer

        Mike Brown walked into a meeting, but it felt more like an ambush. Political and business leaders were lined up against him in force on that sunny February day in 1997 — a rare show of unity. The controversy at hand was where to build the Bengals football stadium.

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        Mr. Brown, the team's general manager, wanted it on public land next to the Roebling Suspension Bridge, smack in the center of Cincinnati's riverfront.

        Everyone else in the meeting was determined to move the stadium one block west to allow for a park, entertainment district and housing along the city's front porch. Mr. Brown thought it would be expensive and delay construction.

        The issue threatened to be a deal breaker. The new football stadium's future was up in the air and falling fast.

        “It was like being invited to a party to get our heads handed to us,” said Troy Blackburn, Mr. Brown's son-in-law and the team's director of stadium development. “They brought in all the business community folks to lean on us.”

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        The meeting opened in an office at the Enquirer Building, overlooking the disputed turf, and lasted five hours. By the time it was over, Mr. Brown was ready to make a deal: He agreed to move the stadium in exchange for three adjoining practice fields.

        “I was compelled to move it,” Mr. Brown said.

        The stadium meant to keep the Bengals in Cincinnati was back on track. Again.

        Paul Brown Stadium is nearing the end of a seven-year odyssey that started when Mr. Brown first threatened to pull the Bengals out of Cincinnati if he didn't get a new home for the team.

        Today, the stadium's swirling design, with angled concrete corners and curving steel frame, is unique in the NFL and winner of a national architecture award.

        But the stadium has been the source of repeated friction in the community. Time and again, problems threatened to kill the deal before the first shovel of dirt was turned.

        Those disputes contributed to soaring costs, which have pushed the stadium at least $46.2 million over budget — the crowning controversy for a project defined by a troubled past.

        At $453.2 million, Paul Brown Stadium is the most expensive public works endeavor in the city's history. Politically, it has taken years of backroom deals, often made at the last possible moment, to keep the project moving forward.

        That is nothing new in a city where the business elite — executives from Provident Bank, Procter & Gamble, Kroger and Western-Southern Life, to name a few — often are called on to resolve political gridlock. But Paul Brown Stadium is remarkable in the number of those differences that had to be overcome.

        “We have managed to get it done in spite of ourselves, which is the Cincinnati way,” said John Williams, president of the Greater Cincinnati Chamber of Commerce.

        “But five years from now, we'll have forgotten all the difficulties and challenges and view it with immense pride.”

        Perhaps. But what lingers with the people who made it happen is the way the stadium often seemed doomed, the deal about to fall apart.

        Each time, however, someone would emerge with an idea or the political cunning to keep it going.

Mike Brown's threat
        Mike Brown was eyeballing opportunity in 1993.

        Three cities were going to be left out of a National Football League expansion derby that fall, and Mr. Brown was ready to begin talking to one of them about moving his Bengals.

        Mr. Brown realized the team's playing days were numbered at Riverfront Stadium the year before. The issue was money. Specifically, the Bengals' lack of money.

        A federal jury in Minneapolis had thrown out the NFL's limited version of free agency, dramatically changing the league's economic landscape.

        The ruling meant veteran players could sign with the highest-bidding team, which put big-market clubs at a decided advantage.

        Owners of teams in smaller cities, like Mr. Brown, had to figure out new ways to generate cash, or they could never afford the talent to compete.

        At the time, Mr. Brown had what he thought was one of the worst deals in the NFL. He paid $2.5 million a year in rent for a facility that didn't give him much in return. He received no cash from parking or advertising, and got only a portion of concession sales on Sunday afternoons.

        Other teams got all of that money at their stadiums, and some didn't have to pay rent. Even the salary cap — a limit on the amount of money teams are allowed to spend on players — seemed stacked against him.

        The cap is based on average revenues of all teams in the league. Those organizations generating more money from shiny new stadiums drove up the average, making it more difficult for teams like the Bengals to compete.

        According to the NFL, the Bengals' 1994 gross revenue of $53 million ranked dead last in the 28-team league. Dallas, at $101 million, was at the top.

        Like his father, the coach and Bengals' founder for whom the stadium was named, Mr. Brown hates to lose. The deal struck with the city in 1967 to occupy Riverfront Stadium was, in his opinion, an outdated loser.

        He desperately needed the money more skyboxes and club seating would bring.

        “We were in an economic dead end at Riverfront,” Mr. Brown said. “It just could not be made to generate the necessary income to maintain an NFL franchise once free agency came.”

        All five cities trying to land expansion teams in 1993 had lucrative stadium deals on the table. Those cities not picked for expansion would use their deals to lure an existing franchise.

        Mr. Brown had talked for years about his need for a new stadium. Over at City Hall, his conversations were met with sympathetic nods and very little action.

        On Nov. 4, 1993, Mr. Brown threatened to begin negotiations with one of the three cities which would be denied an expansion team later that year.

        The time had come to move from asking for a new stadium to demanding one.

John Shirey's worries
        John Shirey walked into a hornet's nest.

        Cincinnati's new city manager was on the job about two weeks in 1992 when he learned the Bengals had been unhappy at Riverfront Stadium for a very long time.

        Mr. Shirey found a 10-year-old lawsuit — still unresolved — in which the Bengals were looking to get out of their lease early because the city had let the stadium deteriorate.

        The situation was worse by fall of '93. The Bengals were threatening to leave town. Mr. Shirey's most urgent job suddenly became keeping the Bengals in Cincinnati.

        “It hit me pretty cold,” Mr. Shirey said. “I felt it was important for the city's self-esteem to keep the team here. I just thought it would have been a disaster if they left.”

        He felt good about his chances. Mr. Brown told him privately that he liked Cincinnati and wanted to stay. Mr. Shirey saw a willingness to work on the problem.

        But a new stadium couldn't be built overnight. Mr. Shirey had to find a way to upgrade Riverfront Stadium and amend the Bengals' lease so Mr. Brown would be happy and successful until a new stadium opened.

        Negotiations started immediately.

        “I've always understood the Bengals' point of view,” Mr. Shirey said. “Mike Brown is a dying breed. He is an individual owner of a professional team who is up against giant corporations or huge financial empires.

        “I don't agree with him on everything, but I understand where he's coming from.”

        That understanding gave the men common ground.

        But Mr. Shirey also had to worry about Reds' owner Marge Schott, who would have to sign off on any changes at Riverfront. The Reds shared the existing stadium uncomfortably with the Bengals since its opening in 1970, and the baseball team wanted a new stadium, too.

        Mr. Shirey faced many questions: Would the city build one or two stadiums? Where would the Bengals stadium be? Who would pay for it?

        A year of negotiations led to a 1994 legal agreement that sketched a road map to some of those answers. Mr. Brown dropped the lawsuit and agreed to stay in town if a new facility opened by August 2000.

        And he brought something else to the table: An idea to form a regional task force, which would look for ways to spread the burden of paying for new stadiums beyond the city limits.

        “I felt very good about that,” Mr. Shirey said. “The city wasn't in a financial position to get it done. It was a clear sign to me that Mike wanted to stay in Cincinnati.”

        The agreement meant the Bengals' future in Cincinnati was safe, at least for the moment.

Bob Bedinghaus' calculation
        Bob Bedinghaus was an aspiring politician in the Republican party in 1995, looking for name recognition. He got it with one of the biggest political gambles in Hamilton County's history.

        The Regional Stadium Task Force had failed to come up with a viable way to pay for the stadiums. And Mr. Brown's attorney, W. Stuart Dornette, was now talking to Baltimore about moving the team there.

        Alison Asti, general counsel for the Maryland Stadium Authority, said the Bengals were offered the same deal the city had on the table when it tried to land an expansion team.

        It was a sweet deal that included a $200 million stadium next to Camden Yards, with all the revenue 100 luxury boxes, advertising, parking and concessions could bring. The team also would get half the revenue generated from concerts, college football games or any other event held there.

        Mr. Brown paid a visit, took in a baseball game and dined with key members of the sports authority.

        “We were in very heavy discussions with him, to the point where documents were changing hands,” said John Moag, then chairman of the Maryland Stadium Authority.

        Back home, the regional task force was falling apart. It was made up of leaders from all eight Tristate counties. But that leadership failed when talk moved to raising taxes outside the Hamilton County lines.

        “Everyone got up and left the table except the city and the county,” Mr. Shirey said. “It was a lonely feeling.”

        On a brisk Saturday morning in April '95, Mr. Bedinghaus and then-Ohio Senate President Stanley Aronoff were together in South Fairmount, promoting an immunization program for children.

        The two were sitting together when Mr. Aronoff leaned over with an idea.

        “Bob, you can solve the issue,” he said. “You have the absolute power to raise the sales tax and do anything you want with the money.”

        Mr. Bedinghaus dismissed the notion. He was a young Republican in ultraconservative Hamilton County. Just mentioning a new tax could cost his political future.

        “But it kept gnawing at me,” Mr. Bedinghaus said. “We had other problems, too. We had to deal with jail overcrowding and we absolutely needed a new emergency communication system.”

        So he sat down with a legal pad at his kitchen table in Delhi Township and began scribbling.

        A former banker, Mr. Bedinghaus' eyes grew wide when he saw the numbers: Raising the sales tax a penny on the dollar could bring in about $96 million a year.

        “What could you do with $96 million a year?” Mr. Bedinghaus said aloud.

        He also realized raising the sales tax would succeed where the task force failed — anyone spending a dollar in Hamilton County would help pay for the stadiums, whether they live in Kentucky, Indiana or the outlying counties of Southwest Ohio.

        “It seemed like a pretty good deal to me,” Mr. Bedinghaus said. He decided to run the idea past his first political adviser. She shuddered.

        “Shut up,” wife Betsy told him. “If you just keep your mouth shut, your re-election in nine months is guaranteed.”

        Solid advice for a Republican in Hamilton County, where no Democrat has been elected to the commission since the 1960s.

        Mr. Bedinghaus ignored it.

        “It was a helluva risk, but I don't know if you could do more to change the face of the community,” Mr. Bedinghaus reasoned.

        By the last week in June, Mr. Brown had given the city an ironclad deadline: Come up with a workable plan for the stadium by the 30th, or he would enter into exclusive negotiations with Baltimore to move his team.

        The Bedinghaus plan, calling for the county to raise the sales tax and build the stadiums, was clearly workable. It was lawful, and he had met with the city's business power brokers and received their blessing.

        But he needed the approval of City Hall, and that wouldn't be easy. In exchange for the county getting in the stadium business, Mr. Bedinghaus asked for $5 million a year from city coffers.

        City leaders blasted the plan, then made demands of their own.

        The situation looked bleak the day before the deadline when city manager Mr. Shirey sent a fax to the county demanding tens of millions from the sales tax for the Metro bus system. Mayor Roxanne Qualls, who would make education a central theme in her re-election campaign that fall, also wanted a piece of the sales tax for public schools.

        Hamilton County Administrator Dave Krings called Mr. Bedinghaus at 7:30 a.m. on June 29, after getting a fax with the new demands. They drove over to City Hall immediately.

        It turned into a daylong meeting. Mr. Shirey and Ms. Qualls represented the city while Mr. Bedinghaus and Mr. Krings sat in for the county. Ralph “Mike” Michael, a longtime friend of Mr. Brown and head of PNC Bank Ohio, mediated.

        Talks broke off just four hours before the vote. Mr. Michael calmed everyone down.

        “I told them that if the Bengals left, no one would remember that they stood on their principles that day,” said Mr. Michael, who now is executive officer for PNC's Financial Services Group in Pittsburgh.

        “The only thing people would remember is that Cincinnati lost the Bengals,” he said. “We sat back down and ironed out the issues.”

        City Council approved the plan with a 5-4 vote at 11:58 p.m., just two minutes before the deadline.

        Mr. Michael headed over to the Queen City Club to meet Mr. Brown. The room was full of smiles. But Mr. Michael noticed something sticking out of Mr. Brown's pocket.

        “It was a plane ticket to Baltimore,” he said.

Tim Mara's defiance
        Tim Mara didn't share the elation at City Hall that night. He was outraged.

        A Cincinnati lawyer and leader of a group called Citizens for Choice in Taxation, Mr. Mara thought raising the sales tax without asking voters to weigh in was the height of arrogance.

        “They were demanding that we build a stadium and that we not have a say in it,” Mr. Mara said. “It was like a stick-up, just give us your money and don't think about it.

        “We decided that, damn it, the people should have a say.”

        His phone had begun ringing even before the vote. The question on the other end of the line was inevitably: “What can we do?”

        Mr. Mara researched the law and came up with an answer. The group had 30 days to collect 26,000 signatures from registered voters in Hamilton County. That would force the issue onto a ballot.

        Their first organizational meeting was held in July '95 and drew about a dozen people. By August, more than 1,000 people had requested petitions.

        The group collected 90,000 signatures in 30 days. It was the first successful tax referendum in the county's history.

        “There was such momentum when we started,” Mr. Mara said. “At first, we weren't even sure if we could get enough signatures. We put up square yard signs and people would pull over their cars.

        “It was like a drive-through.”

        Seeing that a vote was inevitable, commissioners decided to put the sales tax on the ballot themselves. It became known as Issue 1, and was set for vote in March 1996.

        The pro-tax campaign was led by Jeff Berding, who was in public relations and now is a member of the Bengals' staff. They promised two stadiums could be built for $544 million, and that Cincinnati's status as a “major league city” hung in the balance.

        Mr. Mara led the anti-tax crusade and scoffed at the $544 million figure. He said the stadiums would cost twice as much. He would later be proven right.

        “They had no way of really knowing what the costs would be,” Mr. Mara said. “I just think they were willing to say whatever it took at the moment to get the tax passed.”

        Commissioners offered up a new deal for the vote. They cut the tax to a half penny on every dollar, which would take county sales tax to 6 percent, and traded new jail cells for a property tax rollback. They said the rollback would, over time, make the tax a wash for county property owners.

        History and money eventually worked against the anti-tax folks.

        Just four months before the vote, Cleveland Browns owner Art Modell moved his team to Baltimore, taking the deal Mr. Brown had passed up a year before.

        “I remember Art came up to me at the NFL meetings that summer and asked if we'd given up on plans to go to Baltimore,” Mr. Brown said. “I told him we were going through the process in Cincinnati, sink or swim.”

        Seeing Cleveland's beloved Browns leave town, Mr. Mara said, made voters believe the Bengals might really go, too. After all, there were plenty of other cities — chiefly Cleveland and Nashville — hungry for a pro team.

        And in eight months of campaigning, the pro-tax side spent more than $1 million, most of which came from the city's corporate giants. That bought numerous television commercials. Among the most effective was Mayor Qualls' appeal to non-sports fans, saying: “This isn't about touchdowns and home runs, it's about the rebirth of our riverfront.”

        Mr. Mara's organization raised only $40,000 and relied mainly on radio spots.

        “By January, I didn't need to take a poll to know we were beat,” Mr. Mara said. “I could see it in the way people would take our literature, lower their heads and quickly walk away.”

        It wasn't even close. The sales tax increase passed with 60 percent of the vote. Once again, the stadium had cleared a hurdle that threatened to kill the deal.

Joe Pichler's cookies
        Joe Pichler is used to dealing with crisis.

        As chairman and chief executive officer at Kroger, he had been through merger and takeover attempts. But he hadn't been through anything like this.

        In January 1998, city officials were holding hostage 10 acres right in the middle of the new football stadium's footprint.

        City Council refused to give up control of the land — meaning construction could not begin — because it thought the lease signed by the county and team gave the Bengals too much say over development along the central riverfront. For example, the lease gave the Bengals veto power over any nearby buildings that would block the stadium's view of the city skyline.

        The land was the only leverage the city had.

        “We were appalled by that lease,” City Manager Shirey said. “The county had ceded all control of the riverfront to the Bengals, from Broadway to the Clay Wade Bailey Bridge.

        “If that lease had been allowed to stand, we would have had nothing but a sea of parking along the central riverfront.”

        The county's Mr. Krings doesn't buy it. In addition to lease amendments, the city was asking for about $17 million for its Fort Washington Way project and the accompanying floodwall.

        “I think the major focus was taking the county's money,” Mr. Krings said.

        In response to the dispute, Mr. Brown set another deadline: Transfer the land by Jan. 31, 1998, or he would kill the stadium deal and begin shopping his team. Any further delay, Mr. Brown reasoned, would make it impossible for the stadium to open on time.

        The deal appeared to be falling apart again. And all this after a year of tough, and sometimes bitter, lease negotiations.

        “It was one of the lowest points for me,” the Bengals' Mr. Blackburn said. “We had overcome so many things and then, all of a sudden, we have these peripheral issues crop up and delay us.

        “If the city and county weren't able to get it done, it would have put us in one heck of a pickle.”

        Mr. Brown had gone to watch the Super Bowl that January in San Diego. He sat with old friend Mr. Michael and groused about the stalemate, saying he didn't see a way out.

        Mr. Michael suggested a call to Mr. Pichler. After all, in addition to being top man at Kroger, Mr. Pichler was head of the Cincinnati Business Committee, the close-knit group of city business leaders, and had done a stint with the Department of Labor in the 1960s.

        “I just felt like the private sector could break the logjam,” Mr. Michael said. “Joe was the best person to get that done.”

        Mr. Pichler called everyone to a meeting at the Kroger Building on Jan. 28, 1998. They had 72 hours. The strain was beginning to show.

        A core of three or four people from each side didn't go home until there was an agreement three days later. The meetings moved between the Kroger headquarters, City Hall and county buildings. People caught naps whenever they could, in chairs and on couches.

        “Someone finally brought me some shaving cream on that third day,” Mr. Krings said. “By the time we were done, I did manage to wash and shave, so I felt halfway human.”

        There were heady issues on the table, few of which dealt with the stadium itself: Should the Bengals have a say in the height of buildings nearby the stadium? Who would pay for parking and the new streets along the riverfront? Would the county contribute to the city's reshaping of the highway?

        “We were dealing with an enormously complicated project,” Mr. Pichler said. “Building the stadium itself is enormous, but we were talking about it in the context of the development of the entire riverfront.

        “All the pieces had to fit together. And we couldn't solve one problem by creating a different problem.”

        One of the first things Mr. Pichler did was call for a truce between city and county officials. Both sides agreed to put aside past differences.

        Mr. Pichler gives credit to the three sides for wanting to make a deal happen. It would have been impossible if not for that, he said.

        “My job was to clarify issues and break them down into component parts,” Mr. Pichler said. “Certainly, the substance of the matter was among the most complex I've ever dealt with.”

        But he had a secret weapon — chocolate-chip cookies.

        The group went through boxes and boxes of cookies, along with a case of soda. Kroger-brand soda, of course.

        “It's pretty tough to be angry at someone when you're eating a cookie,” Mr. Pichler said.

        The parties finally emerged with an amended lease that reduced the Bengals' veto power over development along the riverfront. “Not since the Alamo has 10 acres of land seen such a battle,” Mr. Brown said at the time.

        City Council finally voted in favor of transferring the land at 1 a.m. on Feb. 1. This time, they missed the deadline.

        Councilman Todd Portune, who is running against Mr. Bedinghaus for a seat on the commission this fall, playfully turned the clock back to 11 p.m. after the vote.

        Mr. Brown doesn't hold the missed deadline against council.

        “I understand what the city was after and let's credit them,” Mr. Brown said. “They wanted to develop the riverfront and they should. It's a one-in-a-million opportunity, and they seized it.”

        The Kroger meeting would prove to be the last real threat to Paul Brown Stadium. But it would not be the last controversy.

The managers' warning
        A killer heat wave was stalled over the Ohio River Valley last summer as controversy hovered over Paul Brown Stadium again.

        Enormous cost overruns were shredding the budget.

        Unlike the other conflicts, cost overruns could not kill the stadium project. But they have cut deeply into the political capital of stadium backers and may color the stadium's image, even as Cincinnati this week celebrates the first major step in its riverfront revival.

        It had become obvious in August 1999 that the stadium would not be built on budget. The only question was, how much more?

        The first sign of trouble actually came in June.

        County commissioners approved big, unexpected expenditures to the project without a vote or word of public comment.

        They paid $750,000 for special concrete corners along the stadium's playing field that could be removed to accommodate World Cup Soccer. They approved another $1 million for personnel when their construction manager said he needed help in processing the hundreds of changes to work orders at the job site.

        The changes — alterations to the stadium design that usually increased the amount of work and cost — were troubling to construction manager Turner-Barton Malow D.A.G. There seemed to be more changes than normal for a job of this size. The company worried they were pushing the stadium budget into the red.

        At the same time, the Bengals wanted the county to upgrade their new home. The deal was that if the stadium came in under budget, the Bengals could spend the leftover money on enhancements. The Bengals wanted to spend the anticipated savings now.

        Construction managers warned against it.

        The Bengals' Mr. Blackburn responded harshly with a June 10 memo when he heard of the million-dollar fee going to the construction manager.

        “It seems unseemly that (they would) exacerbate the problem by requesting additional fee(s) now,” Mr. Blackburn wrote, “when ... they are arguing that the project not release any dollars for improvements or upgrades.

        “This strikes me as analogous to the child that kills his parents and then asks the court for mercy because he is an orphan.”

        In August, construction managers knew the stadium was $17.6 million over budget. By October, the figure had grown to $24.8 million.

        County commissioners were informed of the overruns, and even received periodic updates in closed-door executive sessions, but did not make them public.

        A construction auditor hired by the county found that changes to individual contracts at the stadium were the main cause of the overruns.

        Bids were accepted before the drawings were complete because of the tight time frame. Later, the work would have to be expanded, and costs got out of hand.

        The construction auditor found that some contractors intentionally bid contracts low to get the work, then charged a premium on all the change orders that followed.

        All the while, the county couldn't slow the pace of construction if it wanted the stadium to open on time. The changes had to be pushed through as quickly as possible.

        Project Manager Dan Streyle said the past problems, all of the lengthy wrangling and negotiations, contributed to the overruns. Time lost in the early years caused the project to be put on a costly fast track, where construction begins before the design is complete.

        “Our deadline never changed,” Mr. Streyle said. “So we get into situations where we're pouring concrete but we don't have all the details about where the ducts and doors and pipes will be.”

        The overruns were made public in February, only after the construction team ran out of money. The public acknowledgement came more than six months after commissioners first learned of the problem.

        Since then, the county has allocated a total of $45 million to cover the overages. And there could be more. Just last week, construction managers said it will take an additional $1.2 million to finish the job.

        But the final contracts won't be closed out for at least six months, maybe as much as a year. It's only then that taxpayers will know exactly how much Paul Brown Stadium will cost.

A vision's fulfillment
        Despite all of the trouble and headaches over the past seven years, Paul Brown Stadium has served as a catalyst for a new riverfront.

        The project has been a proving ground for a new sense of shared purpose between city and county political leaders. Their hope is that the accomplishments at Paul Brown Stadium will lead to a better working relationship between the governments as they tackle future development issues.

        For more than a generation, Cincinnati's riverfront had degraded to a dreary landscape of warehouses, parking lots and beer joints. The football stadium already has replaced the bars and warehouses along the western shore.

        The rest of the vision — a museum dedicated to the Underground Railroad, a 71-acre park, shops, restaurants, offices, housing and new roads connecting the points in between — is supposed to rise where there is a sea of asphalt parking lots.

        Experts say none of it would have happened as quickly if not for Paul Brown Stadium and the future home of the Cincinnati Reds, Great American Ball Park.

        “The two teams agreeing to stay on either side of the riverfront was the big thing, said Don Carter, principal for Urban Design Associates, a Pittsburgh-based development consulting firm. “It allowed for all of the land between to become something very special.”

        Mr. Carter said when viewed in its entirety, Cincinnati's riverfront project can be matched in scale by only a few in the world. “Clearly, this is one of the most complicated projects ever attempted.”

        Although many lessons have been learned, they won't guarantee an easier time as the city and county struggle to complete the riverfront remodeling job. When billions of dollars are in play, disagreements and conflict are part of the process.

        “There's probably plenty of pain to come,” County Administrator Krings said. “We'll certainly be less naive about it in the future.

        “But I don't know anywhere in the whole country where so much progress has been made in such a short amount of time, regardless of the form of government.

        “It's a messy system. Given that, we've done a remarkable job.”

       



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Henson: Big talent, big choice
Lindsay may transfer to UC


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