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Steelers sell bonds to help raise money for new stadium

Thursday, June 18, 1998

By Tom Barnes, Post-Gazette Staff Writer

With a Super Bowl on stadium financing set for Saturday, a possible way to break the Plan B stalemate has emerged.

County Commissioner Bob Cranmer said yesterday that if the Steelers helped sell "stadium investment bonds," as they indicated they would, it would count toward their share of the $803 million city/county proposal to build baseball and football stadiums and enlarge David L. Lawrence Convention Center.

Cranmer and the Steelers have failed to resolve differences about the amount the team plans to contribute to the proposal.

The bonds are a type of private financing. Local companies would buy elements of the stadium, such as seats or a scoreboard, and receive tax benefits as those assets depreciate. A second element of the financing proposal would let investors secure exclusive rights to stadium concessions.

If the Steelers could sell, for instance, $20 million to $25 million in stadium investment bonds, Cranmer said, it would be added to their previous commitment of $50 million, raising it to the level of $70 million to $75 million he's been pressuring the team to provide.

"If the Steelers could get involved in marketing those bonds, we would count that toward their contribution," he said in an interview. "We can talk about it (Saturday)."

No one has been willing to say how the Steelers will raise their $50 million commitment. Team President Dan Rooney has been out of the country, and his son, Vice President Art Rooney, hasn't returned several phone calls.

Cranmer, Commissioner Mike Dawida, Mayor Murphy and members of the city/county Plan B negotiating team will be on one side of the line of scrimmage Saturday morning, with Art Rooney and other team officials lined up on the other.

The place and time for the closed session, which officials said could go all day, haven't been disclosed. The meeting has all the more urgency because Dawida leaves Sunday for a weeklong trip to Poland, and both public officials and Steelers President Dan Rooney want to have a deal wrapped up by June 30.

Meeting that deadline would allow the Regional Asset District to vote in July on its portion of the public financing, $13.4 million a year in county sales-tax funds for up to 30 years.

Something that won't count toward the contribution, Cranmer said, is the team's willingness to cover cost overruns on the football stadium, which is estimated to cost $233 million. If the stadium is built on time and on budget, there won't be anything needed for overruns, he said.

Cranmer said he wasn't impressed by a recent Pittsburgh Post-Gazette story saying that the $50 million offered by Rooney is more than what team owners in some other National Football League cities have offered.

"What has happened in other cities is irrelevant" to the situation here, he said.

Cranmer conceded there is still a financial gap between the $803 million cost of the Plan B projects and the amount of funding available, but downplayed the significance of the shortfall.

Cranmer is, however, still looking at the renovation of Three Rivers Stadium into a football facility as a "fallback position" if enough money to build a football stadium can't be raised through Plan B.

He said it was still possible the RAD board could be asked to vote in July on funding for only two of the big projects -- a new baseball park and a larger convention center.

The Steelers have consistently said they need a new stadium, with revenue-generating features like more luxury boxes and club seating, to enable them to compete with other teams in their division. Dan Rooney has said he won't sign the 30-year lease sought by the city and county if he has to remain at Three Rivers.

The size of the gap in the Plan B funding is in the range of $45 million, but Cranmer said that could be made up through the sale of the proposed stadium investment bonds.

"It's a viable concept," he said, but it's only in the preliminary stages. He has held initial talks with banks and other local companies about investing in physical assets of the two new stadiums -- buying a scoreboard, seats or some other item.

The investor would get tax benefits as the asset depreciates over time, Cranmer said. Other private investors could buy exclusive rights to stadium food services or novelty sales, earning a modest rate of return.

Plan B envisions $305 million in city/county funds being combined with $328 million in state/federal funds and $170 million in private funds. The latter category includes $45 million in private capital from the stadium bonds.

"We bring a finite amount of public funds to the table, and it's not going to increase," Cranmer said, stressing the need for more private investments.

On another dispute related to Plan B -- a disagreement between the Steelers and the Carnegie Science Center over the precise location for the new football stadium -- Cranmer sided with the Science Center.

"I want to ensure the Science Center has room to do what they have in mind for expansion," he said.

County Controller Frank Lucchino, who is science center board chairman, has complained that the area on the North Shore where the Steelers want to put their stadium will destroy the old Miller Printing Co. building, now occupied by the science center, and part of a science center parking lot.

The dispute over the exact site of the football stadium is secondary to resolving the dispute over financing for Plan B, Cranmer said.

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