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Plan B approved: Play ball!

RAD board votes 6-1 to fund new stadiums, expansion of convention center

Friday, July 10, 1998

By Tom Barnes and Robert Dvorchak, Post-Gazette Staff Writers

After five hours of debate, the Regional Asset District board last night voted 6-1 to approve local funding for an $809 million plan to build two new stadiums and triple the size of the David L. Lawrence Convention Center.

The Regional Asset District board's 6-1 approval of Plan B pleases County Commissioner Bob Cranmer and Mayor Murphy. (Annie O'Neill, Post-Gazette)

As board Chairman David Matter announced the vote, the room burst into applause from supporters of what has become known as Plan B.

Even some who voted for it called it an unpopular issue and a tough decision, and one person in the crowd appealed to the board again and again to "vote the will of the people."

"This isn't a perfect plan, but few things in life are," Matter said. "But I believe it represents an affordable solution to the problem of how to preserve these terribly important sports franchises and take advantage of the burgeoning market for conventions and trade shows."

Ralph DeStefano, the only RAD board member to vote against the measure, said it was "time to stop the insanity with sports salaries."

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"Let's stop it here," he said. "Why should the elderly and poor be forced to feed this insatiable monster?" he asked. He denounced the public tax funds being given to build the stadiums as "corporate welfare."

After the vote, two of the three principal architects of Plan B, Mayor Murphy and county Commissioner Bob Cranmer, hugged. Some of their aides gave each other high-fives.

Pirates owner Kevin McClatchy said he caught the end of the lengthy debate on the radio.

"It's been a three-year odyssey for me in Pittsburgh," he said. "This is a huge relief. This vote will signal the resurgency of Pittsburgh, and means the two franchises will be able to exist and thrive in the city. If we hadn't had a positive vote, it would've been tough.

"I think people will feel excitement and pride as they see these new stadiums go up."

All told, the $809 million will be used to build a $228 million baseball park at the end of the Sixth Street Bridge on the North Shore; a $233 million football stadium, just west of Three Rivers Stadium; and a $267 million expansion of the convention center.

It would also pay off Three Rivers' $40 million debt, pay to demolish the current stadium, and establish a $30 million fund to create a "first-day" attraction entertainment center on the North Shore.

Last night's meeting, meanwhile, went on for hours as members of the board grilled city and county officials on the financial details of the plan. Then, nearly two dozen citizens stepped to the microphone to give their comments.

Of the 23 members of the public who addressed the board, 14 said they were in favor of the plan while nine said they were opposed.

Matthew Berger, of Shadyside, said he spoke for young adults in the area who supported the spending package because it will bring vitality to the region.

"I know what will happen if we don't," he said. "Pittsburgh will cease to be a major league city."

But Rob Chesnavich of the Good Sports Coalition, formed in opposition to the Regional Renaissance Initiative that was defeated in November, pointed out there is no public support for using taxpayer money to help build sports facilities.

"What does the public need to do to show we don't want stadiums?" Chesnavich asked. "Any time the public's been polled on this they've said, 'No.' You're telling the public you don't want their opinion, you want their wallets."

And attorney Allen Brunwasser drew laughter and applause when he derided the numbers bandied about.

"If anyone came into one of our banks with the kind of arithmetic I've heard tonight, they would be laughed out of the place," Brunwasser said. "If this was a good deal, they wouldn't have to come here to beg for money."

After the vote, one of the most outspoken opponents of Plan B, Gerald Bowyer, who heads a conservative think tank called the Allegheny Institute, called it "a sad day for Allegheny County."

"Our elected officials, who are supposed to be working for us, have gone against our explicit wishes that tax dollars not be used for stadium construction."

Ralph DeStefano was the only RAD board member to vote against Plan B. (Peter Diana, Post-Gazette)

On the RAD board, the most critical questioning came from DeStefano, president of UPMC Passavant Hospital, who said he was displeased he hadn't been able to see confidential, financial information from the Pirates and Steelers.

The board had appointed board member Gerald Voros and David Donahoe, the Regional Asset District's executive director, to examine both teams' finances.

But DeStefano, who was appointed to the board by county Commissioner Larry Dunn, a strong critic of Plan B, said he wasn't satisfied with that disclosure arrangement.

In a statement released after last night's vote, Dunn said: "A tax is a tax is a tax, whether you call it a Regional Renaissance Tax, a stadium tax, or a Regional Asset District tax, they all come from just one place -- the peoples' pockets."

DeStefano pointed out that the RAD board requires many recipients to "jump through hoops" before they can collect the money.

He said, too, that he was angered by the removal of Fred Baker, a former RAD board member who resigned a month ago, saying he could not support Plan B.

Each year, the RAD board distributes $64 million. That money is raised by the county's 1 percent sales tax levy.

Currently, the board provides $10 million a year for the operation of Three Rivers Stadium.

Under Plan B, that amount will increase to $13.4 million a year for 30 years.

Combined with some of the new revenue from the county's 7 percent hotel tax, the money would pay off $305 million in bonds to be sold to build the three big projects.

The money would be combined with state, federal and private funds. Those private funds include $76.5 million from the Steelers and $40 million from the Pirates.

In response to DeStefano's objections, some RAD members pointed out the money for the two stadiums would go to the Public Auditorium Authority -- who will own the two stadiums -- and not to the teams.

Therefore, they said, the board wouldn't need to look at the teams' confidential, financial information.

But DeStefano raised another issue: Because much of the teams' contributions is coming from a surcharge on tickets, he thinks the fans are bearing the brunt of the cost.

Another board member, Joyce Baskins, said she wanted to make sure that ticket prices at the new stadiums were affordable to the average fan.

"I am not about to forget poor folks," she said. "That is where I came from."

She also said she wants city and county officials to ensure job opportunities for minorities and women in the construction of the three major projects.

After the vote, Mayor Murphy and County Commissioner Bob Cranmer, two of the three major architects of Plan B, were thrilled with last night's outcome.

"Tonight we took a big step in putting this region together," Murphy said.

At his side, Cranmer added, "This will create a tremendous amount of energy to move the city and region forward. It's a fitting way to end this century and begin a new one."

But problems for Plan B still loom.

Brunwasser, for example, has already filed one lawsuit against the RAD board members over Plan B.

In his opinion, the 1993 state law that set up the Regional Asset District doesn't justify its use for building new facilities, only improving existing ones.

A Common Pleas Court hearing has been set for Wednesday on Brunwasser's suit.

And Bowyer said his group's political arm, the Allegheny Institute Taxpayer Coalition, is strongly considering filing a lawsuit against the RAD board, too.

"We think the vote violates RAD law procedures," he said.

As he sees it, the board should have held more public hearings on the plan and the two teams should have been forced to publicly disclose their finances.

For more than two hours last night, city and county officials explained the complex financial details of Plan B to the RAD board.

Of the $40 million contribution from the Pirates, the team would provide $8.5 million in cash up front, said Steven Leeper, an aide to Mayor Murphy.

The remaining $31.5 million would be stretched out over an unspecified period of time.

That $31.5 million would come from the sale of naming rights to the new baseball stadium and a 5 percent surcharge on tickets.

Leeper said the Pirates estimate they will receive $1.4 million a year for as long as 30 years for those naming rights.

The Pirates expect $1.5 million a year from the ticket surcharge.

As for the Steelers, more than half of the team's $76.5 million share is expected to come in the "early stages" of a 29 1/2-year lease, said Charles Cohen, a lawyer for the city.

He said that money would be a combination of up-front cash, a 5-percent ticket surcharge, the sale of personal seat licenses and club seat revenues.

The vote came just eight months after voters in 11 counties rejected a one-half of one percent increase to fund the projects and other economic development.

But on Nov. 4, voters in all 11 counties rejected that idea, called the Regional Renaissance Initiative.

And they did so overwhelmingly: 530,706 people voted against the Regional Renaissance Initiative, compared to the 281,336 people who voted for it.

The idea came closest to passing in Allegheny County, but even there the gap was wide. It lost by a 58-42 percent margin.

The very next day, the three principal architects of Plan B, Murphy, Cranmer and county Commissioner Mike Dawida, began picking up the pieces and fashioning an alternative financing plan for the stadiums and convention center.

They had learned their lesson from the referendum: Residents did not want a tax increase.

So they limited their sights to Allegheny County and used the existing 1 percent county sales tax as the basis for much of the financing.

And they added to it some funds from the county's hotel tax.

During a March 9 news conference at the convention center, the details of Plan B were announced.

Officially, it was called the Regional Destination Development Plan.

By selling bonds that are to be repaid with the county sales-tax and hotel-tax revenue, the city and county expect to raise $305 million.

To this they have added $300 million in state aid and $28 million in federal aid.

There is also $176 million in private funds included in the funding formula, including the money from the Steelers and Pirates.

That money includes a projected $7 million over 30 years from a tax on the salaries of football and baseball players who don't live in Pennsylvania.

In voting for the measure, Mary Pat Soltis, a RAD board member from McKeesport, said it was time for such a move.

"It's time to take a risk, to create a vibrant city," she said. "If we miss this chance, if we don't take this risk, we may never catch up."

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