Milford, Ohio – On September 9, the Clermont County Port Authority approved issuing $30 million in lease revenue bonds to finance the cost of building a training facility and youth academy in Milford for the professional soccer team, FC Cincinnati.
Self-described “Taxpayer Watchdog” and candidate for Clermont County Auditor, Chris Hicks told Loveland Magazine, “This deal is pure crony capitalism. It raises taxes, the hotel tax, specifically to support one private, for-profit, company. It buys land using tax dollars for that company. It then has the government issue bonds to finance it all for the private company and then has the government own the land and buildings so the private, for-profit, company never pays property tax.” Hicks also says that the City of Milford gets no new infrastructure such as road or sidewalk improvements. and it actually makes the citizens of Milford liable for $43,000 to 47,000 per year for 20 years, to pay for the land.
A recent increase in the Clermont County lodging tax will also provide $223,000 a year to support the project.
Because the Port Authority is tax exempt, FC Cincinnati will not have to pay property taxes. It has negotiated annual payments with the Milford School District to help compensate for what they might otherwise lose, however, other public agencies whose funding derives from property taxes will not be made whole.
Under the agreement, the Port Authority will lease the 24 acres of land on U.S. 50 in the City of Milford near Interstate 275, and the facilities to be built, to FC Cincinnati for $1 a year. The bonds will be privately purchased by FC Cincinnati. The Port Authority will receive a one-time fee of $105,000 and an annual average fee of $9,000, most of which will go to support various county levies.
The vote was 4-1. Port Authority Vice Chairman Loretta Rokey the Administrator of Pierce Township; Fiscal Officer Sam DeBonis an Assistant Vice President of Park National Bank, and members Greg DeFisher the President & CEO, Freeman Schwabe Machinery, and Rex Parsons the Administrator of Batavia Township; voted in favor. Member Greg Simpson a Principal with Key Transportation Inc., voted against the resolution.
In a statement released by Clermont County after the vote, Andy Kuchta, Executive Director and Secretary of the Port Authority, offered the following statement:
The structure of the lease answers all of the questions related to what the economic impact will actually be and if it is worth the level of incentives being provided. The Port Authority will have the choice to not renew the lease every 360 days for any reason. This is not a 20-year deal but a 360-day deal, full stop.
Within the next 3-5 years there will be a comprehensive evaluation of the actual economic impacts and benefits once the facility has been constructed and operational for a period of time. If that evaluation determines the economic impacts have not materialized, the Port Authority will be able to substantially renegotiate the terms of these agreements or simply not renew them and return the property to a fully taxable status.
On Aug. 22, Clermont County Commissioners approved an increase in the lodging tax in the county, from 6% to 7%. The revenue generated by the increase in the tax, approximately $223,000 a year, will be used by Milford to pay for the land. Commissioner David Uible said that “As a businessman, I love this deal. Clermont County incentivizes the City of Milford to buy this property for FC with a 1% lodging tax. This will result in $7 million in additional spending each year. The clear winners are the City of Milford, the county as a whole, and all the citizens who call Clermont County home.”
Hicks says that the statement by Uible is misleading because the $7 million figure pertains to all soccer in the region, not from the Milford practice facility. Hicks says in a fact sheet he released on August 29 that even if credible, their own study lists the actual impact at only $1.6 million per year.
Hicks has previously said that the 1% tax increase was not enough to cover the cost of the land. “To fund $3.5 million for land, based on Clermont County Convention & Visitors Bureau estimates, the hotel tax needs to be at least 1.2%, leaving Milford taxpayers holding the bag for $43-47 thousand per year.”
In an analysis of the deals, Hicks says that County agencies that rely on property taxes like library, safety services, developmental disabilities, senior services, mental health, the Park District, Live Oaks, the City of Milford, and the County general fund will all lose the funds they receive now, $1,144,160, because when the FC Cincinnati site is developed there will be zero property taxes assessed. Hicks says that a $30 million development should pay $866,744 per year.
Commissioner David Painter, who voted against the tax increase, said at the time of the vote, “I didn’t think the return was high enough to fully represent the stakeholders of Clermont County, who are the citizens of Clermont County.”
According to the County, the 1% increase in the countywide lodging tax will “sunset” in 2038 or when the balance in the lodging tax account is sufficient to pay off the debt, whichever occurs first.
The $30 million soccer complex is expected to include a 30,000-square-foot training facility and a 6,500-square-foot youth academy. FC Cincinnati said they hope to complete the training facility by next summer.
The Port Authority decision represents the last step before the project can begin. FC Cincinnati also entered into agreements with the City of Milford and the Clermont County Convention & Visitors Bureau.
Also according to the press release issued by the County, a study by Sports Facilities Advisory, a sports management consulting group based in Clearwater, Fla., estimated that the FC complex would generate “almost 65,000 visitor days” by out-of-town visitors and result in almost $7 million in direct spending annually. Hicks said, “Go deeper and find an economic study that has been misrepresented. It actually says a paltry $1.6 million in annual benefit will come from this site.” Hicks also claims that the economic study does not mention that FC Cincinnati will be selling “high dollar academy memberships for millions” as opposed to letting locals come and go as they please. “These type of facilities are money makers selling the ‘academy dream’ of your kid on a pro-soccer team,” added Hicks.
You can look at Hick’s August 10 breakdown of the cost of building the Milford facility: Massive incentives.
FC Cincinnati, whose owners were recently granted expansion status by Major League Soccer, will also build an estimated $200 million stadium in the West End of Cincinnati, which is expected to be open for the 2021 season. The team currently plays at Nippert Stadium at the University of Cincinnati. The City of Cincinnati is contributing 35 million dollars of public money to the West End Stadium.