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Stadiums projects raise questions
Tuesday, December 01, 1998 By Tom Barnes and Dan Fitzpatrick, Post-Gazette Staff Writers
Q: What happens now to the money from the Regional Asset District board and private commitments?
A:When the RAD board agreed to supply $13.4 million a year for 30 years toward the three Plan B projects, here was a catch: The RAD funds were contingent on city and county officials coming up with other pieces of the funding puzzle, including state and private money.
David Donahoe, RAD's executive director, said there is no time limit on the wait for the additional pieces of funding. But, he said, that money won't be released until other pieces of the funding are in place.
"The district board wants to make sure all the monies for a project have been raised before we release our portion," he said.
Likewise, the private money won't be turned over until the entire package is complete.
But keep this in mind: The RAD board members are appointed by Mayor Murphy and the county commissioners, and they could change their minds about unilaterally releasing the RAD money, although that is unlikely.
Q:So that means even if the city and county got together and wanted to move ahead with construction, they couldn't?
A: That's correct. Remember, none of the money will be released until all the funding is in place.
Q: How was the RAD money going to help fund the projects? And how much of their own money were the Steelers and Pirates going to put up?
A: The $13.4 million a year in RAD funds was expected to float a bond issue of between $180 million and $200 million, depending on interest rates.
In addition, the Steelers agreed to provide $76.5 million and the Pirates $40 million. Gov. Ridge pledged to seek $75 million to $80 million for each stadium.
Q: Is there any other place to get the money to make up the one-third loss in state funding?
A: Not a chance, said Chuck Cohen, chairman of the Downtown law firm Cohen & Grigsby and the chief negotiator for the city and county on the new football stadium.
"By the time they found an alternate source, whether local or federal or some other combination, I think the Pirates would be gone and there is some chance the Steelers would be sold," he said.
Q: Couldn't the Pirates take the money that's been committed for both teams and build their stadium first? Couldn't the Steelers build later?
A: The two projects cannot be built sequentially, Cohen said. To do so would take a total overhaul of the teams' financing plans.
Q: How much has the city spent so far on site clearance? Should that work continue?
A: The city Stadium Authority borrowed $14 million from PNC Bank to get started with site clearance, and so far at least $11 million has been spent or committed. One structure, the former Wesco Building, has been razed and the site is now being used as a stadium parking lot.
The authority had planned to pay back the bank loan once it got the proceeds from a bond issue of several hundred million dollars, which was to be sold in the spring. The bond issue was to be paid off using RAD revenues, revenue from the county's hotel room tax, the teams' money and perhaps from a tax on players' salaries.
But without assurances of state funds for the financing package, it will be difficult to float the bond issue.
If property acquisition has to be halted entirely, the North Shore land that has been acquired could be sold and the bank loan repaid that way, Stephen Leeper, director of the Public Auditorium Authority, has said.
Leeper couldn't be reached for comment yesterday about what might happen with the property that has already been bought.
Q: What does this mean for other developments on the North Side and Downtown?
A: "It certainly is not helpful," Cohen said. "On the North Side, the whole impetus for redevelopment there has been severely impaired."
Q: How long can the Pirates delay construction on a new stadium and still open for the season that begins April 2001?
A: The Pirates have been hoping to begin construction in April 1999, giving the contractors a stadium-construction standard of 24 months to do the work. A delay of several months would make it more difficult, but not impossible, to meet the deadline.
The Washington Redskins, for example, built the new 80,000-seat Jack Kent Cooke Stadium in 17 months to open for the 1997 football season.
To compensate for lost time, builders and designers can put the stadium on a "fast track," pulling double shifts or purchasing the materials quicker than normal.
There is a price, though. In Phoenix, the rush to open the new Bank One Ballpark led to $34 million in unexpected costs.
Q: What happens next in Harrisburg? Can't Gov. Ridge call back the Legislature?
A: Gov. Ridge and his staffers will continue to lobby lawmakers to support legislation to raise the state's debt ceiling.
The two-year session of the Legislature ended at midnight last night.
Legal opinion was divided about whether Ridge can force the legislators to convene between now and Jan. 5, when they are scheduled to take their oaths of office. But this much is clear: He has no intention of doing so, he said yesterday.
Staff writer Peter J. Shelly contributed to this report.
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