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A TD for Plan B

Steelers, Pirates add millions for stadiums, agree to long leases

Sunday, June 21, 1998

By Robert Dvorchak, Post-Gazette Staff Writer

After agreeing to ante up millions more, the Pirates and Steelers have reached a deal with local officials to build new stadiums that will keep the teams in Pittsburgh until at least 2031.

The announcements yesterday at the Doubletree Hotel Pittsburgh, Downtown, concluded the bargaining between the two franchises and the city and Allegheny County under Plan B. Seven months ago, the same principals had gathered in the same hotel when their original plan for funding stadiums and economic development projects was soundly beaten at the polls.

The three architects of Plan B -- Mayor Murphy and Allegheny County Commissioners Bob Cranmer and Mike Dawida -- hailed the achievement as a "great day." So did the two principal sports figures -- the Pirates' Kevin McClatchy and the Steelers' Dan Rooney, who cut short his vacation in Ireland to attend the wrap-up session.

"We have accomplished what nobody thought was possible," Dawida said. "This is Pittsburgh making a statement to the nation and the world. This shows Pittsburgh is alive and well."

With the deals in place, the only remaining hurdle is a vote by the Regional Asset District to approve the use of $13.4 million a year from a county sales tax surcharge. That vote is expected by early July. Six of the seven members must approve it.

If the RAD board approves, the city and county will begin to borrow the money that will be used initially to acquire properties for expanding the David L. Lawrence Convention Center and building a 38,000-seat baseball park near the Sixth Street Bridge and a 65,000-seat football stadium on the far end of Three Rivers Stadium.

The state has pledged $150 million toward the $300 million convention center expansion. And Gov. Ridge has promised to pay one-third of the costs of the sports facilities.

Murphy said construction on the sports facilities would begin in April. The completion date for the baseball park is April 2001; the football stadium is to be done in August 2001.

"What a great way to begin a new century," said Murphy, praising the cooperation between the city and the county for getting the deal done.

Using public money for sports facilities has been a complex issue. Voters in 11 counties around Pittsburgh turned down a proposal in November that would have meant an increase in the sales tax, and public opinion polls in May showed that a majority of voters opposed Plan B, even if it meant no increase in existing taxes.

County Commissioner Larry Dunn renewed his objection to stadium financing yesterday.

"Cranmer should call this deal what it really is -- Scam B -- because the teams are not putting up one red cent," Dunn said in a statement. "All the dollars they are talking about are anticipated revenues they will receive after the stadiums are built."

Negotiators said, however, that it didn't matter how the Pirates and Steelers came up with their share as long as the city and county were sure the teams would make good on their promised totals.

The Pirates raised their share of the cost of a ballpark from $35 million to $40 million, saying the increase would come from ticket surcharges and naming rights. The ballpark will cost between $203 million and $209 million.

The Steelers, originally committed to providing $50 million for a football stadium, have increased their share to $76.5 million. Art Rooney II, the chief negotiator for the team, did not give details on where the additional money would come from. But he said surcharges on the price of tickets and personal seat licenses, in which season ticket holders pay a fee for the right to obtain their seats, were part of the mix. The stadium is expected to cost about $210 million.

Both teams have agreed to pay any construction cost overruns. And both have agreed to stay in Pittsburgh until 2031.

A new baseball park was a condition in the sale of the Pirates to McClatchy and a group of investors three years ago. McClatchy maintained that he needed a new ballpark to draw enough fans to be competitive in major-league baseball.

"What happened today is preserving a 111-year tradition in this city," McClatchy said. "I've been talking about a new ballpark for three years. I'm the happiest person in the world this subject is going to come to an end."

The Rooneys also argued that they needed a new stadium, with private boxes and club seating, to generate the money needed to keep key players under contract. While football teams share revenue from tickets and TV contracts, teams that generate revenue from their stadiums can pay higher bonuses to free agents. The Steelers argued they would be at a competitive disadvantage without a new facility.

"We're Pittsburghers," said Dan Rooney, who had said during the negotiation process that his team wouldn't subsidize other elements of Plan B. "We're going to be here in the city of Pittsburgh."

The final day in negotiations was spent in striking a balance between what the teams could pay toward new homes and still generate enough income from tickets, concessions and parking to compete in their sports.

In the final hours, the Pirates occupied one ballroom, the Steelers another and the architects of Plan B operated from a third to work out the final details. When the talks ended, the Pirates signed a 10-page letter of intent to seal their deal and the Steelers made an agreement in principle. Negotiators said there wasn't enough time to type up the agreement.

Murphy, Cranmer and Dawida have taken the position from the start that keeping the Pirates and Steelers in Pittsburgh is part of their economic development strategy for the region.

They came up with their $803 million Plan B -- to expand the convention center, build two sports facilities, pay off the $40 million Three Rivers Stadium debt and demolish it, and develop other projects to spur growth.

"There's been a great war waged in the media between the forces of optimism and the forces of skepticism. This is about optimism. This is about feeling good about the future," Cranmer said.

The principal sources of public money for the projects are the RAD sales tax and a tax paid on hotel rooms. The RAD tax is a surcharge on the existing 6 percent state sales tax. So the tax paid in Allegheny County is 7 cents on every dollar.

It was approved by the state Legislature Dec. 14, 1993, and first levied July 1, 1994. Half of that money goes to property tax reduction and half goes to assets such as parks, libraries, the Pittsburgh Zoo, the Carnegie Science Center and Three Rivers Stadium.



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