Steelers eager to close deal on seating at Heinz Field
October 11, 2012 4:00 PM
Keith Srakocic/Associated Press
A view from a high seat in Heinz Field showcases Downtown Pittsburgh and the confluence of the Allegheny and Monongahela Rivers.
By Mark Belko Pittsburgh Post-Gazette
The Steelers say a project to add 3,000 seats at Heinz Field for next football season could be in jeopardy if a plan to pay for the construction isn't finalized by the end of the month.
Mark Hart, the team's director of strategic planning and development, said Wednesday that the project could be delayed until 2014 or killed entirely if the city-Allegheny County Sports and Exhibition Authority isn't able to complete the deal in short order.
"If we don't get approval for several weeks, I think we miss the construction season. I think this project will have to be delayed and it may put the whole expansion in jeopardy," he said. "The bottom line is further delays will cause increased costs, endanger a shovel-ready project and put more jobs at risk."
Despite months of negotiation, the SEA, he said, still has not been able to finalize the details of the plan to finance the construction, estimated at $38 million to $39 million, or resolve bond underwriting issues.
The Pittsburgh Post-Gazette reported last month that the team and local political leaders had negotiated the framework of a deal to help pay for the construction that involved a $1 increase in an existing surcharge on Steelers tickets and a new parking surcharge of $2 to $3 at lots around Heinz Field during home games.
Money raised from the surcharges would support a bond issue, estimated at $20 million, to be floated by the SEA, the stadium owner. Under the plan, the Allegheny Regional Asset District would guarantee the bonds. The other $18 million to $19 million would come from the Steelers.
Complicating the completion of the deal is that Merrill Stabile, president of Alco Parking Corp. -- which manages most of the lots around Heinz Field -- is objecting to the parking surcharge.
In a letter to the SEA and the city's Stadium Authority, he said the lease agreement governing the lots "does not provide for increasing rates to fund projects such as seating expansion at Heinz Field."
Any increases, Mr. Stabile said, are to be based on certain objectives, such as providing parking at reasonable rates, assuring proper management of the facilities and affording Alco the ability to cover expenses and realize a reasonable profit.
During an interview, Mr. Stabile said he is considering increases of his own for next season. Adding a surcharge on top of that could be too much for fans. "The whole idea of a surcharge sets a precedent that we don't like," he said.
Mr. Hart called Mr. Stabile's objections "very unfortunate."
"I think it would be a shame for the parking operator to object to this since they're probably the main beneficiary of all the parking business due to the events at Heinz Field," he said.
"All of us that worked hard on this project have agreed that a ticket surcharge and a parking surcharge is the preferred plan. You have one entity out there who is objecting to it, probably looking out for their own interests."
Mr. Stabile took exception to the comments. While he objects to the surcharge, he stressed that he's willing to explore other options, including a possible financial commitment, to help the Steelers and the SEA "achieve their goal."
"We are willing to explore certain avenues to help out with this project given the Steelers' 'delicate' financial position and their inability to pay for all of it themselves," he said. "Let's not forget all the great benefits it has for the Steelers."
SEA executive director Mary Conturo said the agency is continuing to work with the Steelers on the expansion and hopes to reach agreement on a "workable plan in a timely manner."
She declined further comment.
Even if the details are finalized by the end of October, the Steelers probably won't be able to have the new seats, to be built in the south end zone, in place until mid- to late September, missing the exhibition season and perhaps some regular season games, Mr. Hart said.
He added that a delay beyond 2013 could kill the project altogether, given economic uncertainties and the potential for increased cost. "I don't know what the future holds, but I know this project works right now with the funding plan we have in place," he said.
Under the team's lease at Heinz Field, the SEA is required to pay two-thirds of the cost for a "designated expansion" involving no more than 10,000 seats in the south end zone. The team is responsible for the other third.
The Steelers have yet to finalize the pricing for the tickets in the new seats, which will be marketed first to those on the lengthy waiting list for season tickets. The team likely will sell personal seat licenses -- a fee a fan pays for the right to buy season tickets -- to fund its share of the cost. The Steelers raised an estimated $40 million through the sale of such licenses before Heinz Field opened in 2001 and used that money toward the team's $123 million share of the stadium's $281 million cost.
The existing ticket surcharge of up to $3 raises more than $1.5 million a year, which is used to finance repairs and improvements at Heinz Field. Some of that money may be used to pay for the new seats.
In addition to adding 3,000 seats, the team plans to raise the plaza at the south end of the stadium, build a club level and revise the entry gates. It also intends to add a new scoreboard at the north end so fans in the new seats can see replays and other video during games.