Revenue from Sports Venues Flood City Coffers

 

Pittsburgh’s city government appears to be scoring big from the construction of the city’s three major sports venues and related public facilities, reaping more than $100 million over the past five years from projects it barely supported financially, a report released Tuesday shows.

Facilities owned by the city-county Sports & Exhibition Authority and the city’s Stadium Authority generated $107.2 million in taxes and fees for city government over a five-year period that ended in 2013, according to a report by City Controller Michael Lamb’s office.

Federal, state and county government funding for construction of the facilities, including PNC Park, Heinz Field and Consol Energy Center, totaled more than $800 million combined. Construction costs exceeded $1.4 billion, the report said.

Lamb said the contribution from city government was minimal “” less than $1 million a year in parking tax revenue that the city diverted to help pay off construction bonds.

“The report “¦ shows that the city as a whole has gained a financial benefit from the construction of PNC Park, Heinz Field and Consol Energy Center. From the perspective of the city, this has been a very good deal for us,” Lamb said.

Jerry Bowyer of Elizabeth Township led opposition to an 11-county referendum in 1997 for a sales tax increase to pay for the new football and baseball stadiums, which voters rejected.

“The report doesn’t prove these projects were good for the region. It proves they were good for city government,” Bowyer said.

Jake Haulk, an economist who heads the Bethel Park-based Allegheny Institute for Public Policy, said the report does not calculate the facilities’ “net benefit.”

“We don’t know what the city would have brought in had Three Rivers Stadium, the Civic Arena or the original (David L. Lawrence) Convention Center still been there, and we don’t know how much city residents have had to cough up in tax dollars to pay for the extra government services for these (new) facilities,” Haulk said, adding much of the privately owned land used for PNC Park is now tax-exempt and generates no property tax revenue.

Lamb said he was directed by city council to calculate the direct revenue received by the city from the SEA and Stadium Authority facilities, which in addition to the stadiums and arena, include the expanded convention center and two parking garages.

The $107.2 million generated over five years included money from amusement, parking, payroll, earned income and facility usage fees.

“Everyone said I was trying to bankrupt the city by supporting the stadiums … But we believed all along what is now being proven, that these facilities could provide direct economic benefits to the city and indirect benefits with all the related development and jobs created,” said former Pittsburgh Mayor Tom Murphy, who led the push for the new stadiums on the North Shore, where developers and government officials have invested more than $2 billion in the past two decades.

Lamb’s report said the city received $1.3 million from 2000 to 2013 from real estate transfer taxes generated by the sale of land owned by the agencies.

“We still need to make sure that those city neighborhoods surrounding these venues are reaping those same benefits,” Lamb said.

Among recommendations made in the report, Lamb said the city should find ways to close what he called a loophole in the facility usage fee.

The fee is for entertainers, performers, sports team employees and others who don’t live here but use the publicly subsidized facilities. It is calculated based on a person’s self-reported income for the time that he or she is in Pittsburgh. These figures vary greatly, Lamb said, noting as an example that pop star Taylor Swift paid a $70,411 usage fee for a 2013 show at Heinz Field, while country star Kenny Chesney paid a $132 fee for his Heinz performance the same year.

Tom Fontaine is a staff writer for Trib Total Media. He can be reached at tfontaine@tribweb.com. This article was republished with permission from the original author, Tom Fontaine, and the original publisher, Pittsburgh Tribune-Review.

 

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