of funding is critical
By Tom Barnes, Post-Gazette Staff Writer
This is the last of 15 articles taking a closer look at ''Plan B,'' the financing mechanism proposed by Pittsburgh and Allegheny County officials to pay for new baseball and football stadiums and the expansion of the David L. Lawrence Convention Center. Today's installment is about how the funding dominoes would fall to get the deal done and why the sequence of funding plans is critical.
Q.How will the funding sequence work for the two new stadiums and larger convention center envisioned in Plan B?
A.How do you juggle three bowling balls at one time? By keeping a close eye on each one.
For simplicity's sake, let's look at each project individually. But remember, all this activity will be going on at roughly the same time, complicating the picture.
As for expansion of the David L. Lawrence Convention Center, there are two pieces to the funding picture. The cost is now forecast to be at least $267 million and perhaps as much as $290 million. It could go up, however, as time goes on and prices rise.
One major piece of the funding is already in place: the state's commitment of up to $149.3 million. Gov. Ridge recently came to town and gave that assurance to Mayor Murphy and Allegheny County Commissioners Bob Cranmer and Mike Dawida, the three principal architects of Plan B.
That amount is the ceiling on the state's commitment. If the final cost for the expansion comes in at $267 million, the state will provide half, or $133.5 million. If the final cost comes in at $310 million, the state will provide no more than $149.3 million, or less than half.
The other piece of the convention center funding is to be from city and county funds. Murphy, Cranmer and Dawida have proposed two sources for their share: a portion of the county's 7 percent tax on the price of hotel and motel rooms and the county's 1 percent sales tax.
The commissioners control the hotel/motel tax revenues, so that money is assured. The Allegheny County Regional Asset District board, which doles out half of the $122 million collected annually from the county sales tax, will vote later this month on the requested RAD contribution.
The outcome of the RAD vote isn't an absolute certainty, but since Murphy, Cranmer and Dawida appoint five of the seven RAD board members, odds are favorable.
The hitch is that at least six of the seven board members must approve any new expenditures -- and one of the board members was named by Commissioner Larry Dunn, a foe of Plan B -- so nothing is guaranteed yet. (The seventh board member is chosen by the other six from a list of nominees submitted by local economic development groups.)
The Public Auditorium Authority, a five-member city-county agency that operates the state-owned convention center, recently voted to borrow $27.5 million from Mellon Bank to begin the process of land assembly for the expansion. Three buildings across 10th Street from the center -- a PNC Bank building, United Engineering and the Bowne building -- are to be acquired, along with three parking lots behind the buildings.
A new agency, the Southwestern Pennsylvania Convention Center Design Commission, will choose an architect this summer to design the expansion, which is expected to take about a year.
Property acquisition is to be completed by the end of 1999, with construction starting in early 2000 and being completed by late 2001 or early 2002.
Q.How will the funding for the two new stadiums work?
A.That gets even more complicated, because there are three parts to that formula: state, local and private.
Ridge has agreed to provide about a third of the cost of each stadium, but, unlike with the convention center, he hasn't come up with the cash yet.
Political sources in Harrisburg suggest that he probably won't provide the money until after the November election, when he will be seeking a second term.
Providing money for two Pittsburgh stadiums -- not to mention the state money being sought for a new baseball park and a new football stadium in Philadelphia -- could anger voters in other parts of the state, and thus hurt Ridge's re-election effort.
The estimated price tag for the baseball park is $228 million -- $184 million for construction of the facility itself, plus $25 million to acquire the needed land at the North Shore end of the Sixth Street Bridge, plus $19 million for demolition of existing buildings and other site work. So the state's one-third of the project cost would be about $76 million.
The estimated cost of the football stadium is $233 million -- $192 million for the stadium itself, plus $22 million for property acquisition and $19 million for demolition of those buildings. The state's share would come to about $77.6 million.
As with the convention center, the local share of the stadium funding is to come from the county sales tax -- administered by the RAD board -- and the hotel tax. The upcoming RAD board vote will determine if the plan developed by Murphy, Cranmer and Dawida prevails.
Q.What about private funding for the stadiums?
A.That piece of the funding formula is proving to be the most contentious, at least in regard to the new football stadium.
Steelers owner Dan Rooney last year offered to kick in $50 million for the new football stadium, while Pirates owner Kevin McClatchy offered $35 million. Neither owner has yet said exactly how he'll raise his share.
In view of the Steelers' sellout crowds and the National Football League's lucrative new TV contract, Cranmer has been leaning on Rooney to increase his ante -- to perhaps $75 million or even $100 million.
The Steelers aren't saying what they'll do, but they have pointed out that their current offer is a lot more than some of the National Football League owners are providing for their new stadiums.
Given the Pirates' precarious finances, fluctuating attendance and low payroll, the pressure on them to increase their share has been considerably less.
City and county officials are hoping to conclude the current lease negotiations with the two teams by June, but that isn't for sure yet.
The lease talks are expected to outline how much each team will provide toward the cost of the stadium and how long the teams will agree to stay in town in exchange for the large amount of public funding.
The leases are expected to run for the next 25 or 30 years.
Cranmer hasn't given up yet on renovating Three Rivers Stadium as a football-only facility instead of building a new one, but Rooney won't sign a lease for more than 10 years at a retooled Three Rivers. For a longer lease, he wants a completely new stadium.
Q.When do the new facilities have to be ready for occupancy?
A.The Pirates face the earliest deadline. McClatchy wants to be playing ball in his new stadium by April 2001, the start of the 2001 season. Murphy hopes to complete property acquisition for the park by late 1998 or early 1999, with demolition commencing soon thereafter and construction beginning by spring or summer 1999. Construction could take up to two years.
The Steelers want to be playing in their new stadium for the 2001 season also, which starts in August/September of that year. Murphy hopes that construction of the football stadium will be started by summer 1999 also.
There is no particular deadline for opening the expanded convention center, but officials would like it to be open by late 2001 or early 2002.
Organizations book conventions several years in advance, and before booking one in the expanded center they obviously would have to be assured it will be ready. At this point, booking a convention for mid-2002 would be a real act of faith.