Debt in overtime
Public funding of arenas is for the long haul
The lingering debt on the Civic Arena is a poignant reminder of the extent to which Pittsburghers support their professional sports teams. Yes, the Steelers, Penguins and Pirates are good for the city. The taxpayers are darned good to them, too, however, something the teams should keep in mind.
The Civic Arena, constructed as part of a still-controversial urban “renewal” project that separated the Hill District from Downtown, has been gone five years now. It’s a parking area that the Penguins are overdue to turn into a mixed-use development. But debt on the old building will be hanging around for another year, even as various parties pay debt on PPG Paints Arena, the Pens’ home since 2010.
As the Post-Gazette’s Mark Belko reported Friday, the city, county and the Allegheny Regional Asset District still are working to pay off Civic Arena bond issues floated in 1991, 1994 and 1997. The bonds, totaling more than $30.3 million, were refinanced in 1999 and 2005. RAD still owes $685,000, due next July, while the city and county will split another $498,000 due in two installments this year and next.
Once free of those payments, RAD, the city and county theoretically will have more money for other initiatives. With revenue from the county’s extra 1 percent sales tax, RAD supports dozens of entities from government to museums to parks. If there’s more money to go around, there surelywould be no shortage of takers.
Meanwhile, debt on PPG Paints Arena is still as fresh as new ice. The arena, PNC Park and Heinz Field all are owned by the city-county Sports & Exhibition Authority and leased to the sports teams. According to the SEA, the $321 million arena was built largely with the proceeds from a 30yearbond floated by the SEA and to be repaid by a state economic development and tourism fund, local casino money and the team. The SEA also kicked in $5.5 million for arena-related work, taking two out loans to do so.
Lingering debt isn’t unusual for high-cost venues — debt on Three Rivers Stadium, former home of the Steelers and Pirates, was retired in 2010, nine years after it was imploded — but the taxpayers’ long-term investment tends to be forgotten once the venues open.
It shouldn’t be, partly because new public obligations can be incurred as venues age. The remaining debt on Civic Arena isn’t a holdover from construction. Rather, the 1991, 1994 and 1997 bond issues financed improvements ranging from lighting and seatingto escalators and concession areas.
Teams sometimes claim improvements are needed to stay competitive. In recent years, the Steelers and Pirates both have demanded the SEA make improvements to their North Shore venues and complained when, in their view, the agency was slow to respond. The Steelers even took the SEAto court and lost.
No one likes to fight the city’s sports teams, but the SEA, a public steward, is right to scrutinize requests and pay only for what the lease strictly requires. As the Civic Arena bond issues show, debit is easily taken on and difficult to retire.