FC Cincinnati shuts down West End stadium plans, moving to Oakley or Newport

After Cincinnati's school board dug in its heels over tax payments again Friday, FC Cincinnati announced it would not build a stadium in West End and instead focus on Oakley and Newport.

The decision came after more than a week of tumultuous negotiations.

The soccer club said it was willing to $7.5 million to the schools over ten years, about $6.8 million more than the school is currently receiving on the property.

But in both a letter and a draft resolution, the Cincinnati Public Schools board said current tax abatement rules call for the club to pay more than $20 million.

"When FC Cincinnati moves forward to construct its stadium in Oakley or Newport, a tax-abated, high end CitiRama development on the proposed new Stargel Stadium site will permanently remove any development opportunities of this magnitude on the site proposed by FC Cincinnati," a statement from the team said.

The team also estimated that a community benefits agreement would cost another $50 million over 10 years.

"The economics of privately funding a stadium in the West End community are impractical," the team wrote. "This was a once in a lifetime development opportunity for a neighborhood that wants and needs new investment, and the jobs and business opportunities that would have come with it. FC Cincinnati regrets that it will be unable to construct a stadium in the West End community and have moved our focus to Oakley and Newport."

Earlier Friday, the school board reached out to the soccer team after previously rejecting the club's previous offers for payments in lieu of property taxes.

In a draft resolution sent Friday, the board said it was prepared to vote on Wednesday, the board wrote that payments should be $2 million a year, but offered the team a "deferred" payment plan.

More: FC Cincinnati: Is there any hope for a stadium in West End? Schools to give update Friday

More: FC Cincinnati: West End stadium deal appears to be dead

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FC Cincinnati General Manager Jeff Berding was traveling with the team Friday and could not be reached for comment.

The full text of FC Cincinnati's statement

The proposed resolution received by FC Cincinnati this evening from the CPS Board of Education is consistent with its position of the past several weeks. CPS is asking FC Cincinnati to pay $20 million over 10 years. FC Cincinnati has offered to pay $750,000 each year over its first 10 years in the new stadium, and to pay a consistent annual amount thereafter. This investment by FC Cincinnati of approximately $7,500,000 over the first 10 years in the new stadium is more than $6,800,000 more than CPS currently receives. In addition to this investment by FC Cincinnati, CPS would have benefitted from a new $10 million first-class Stargel Stadium for Taft High School and more than a dozen CPS schools and community organizations. Finally, CPS will lose new tax revenues generated by new residential and other development in the West End community. When FC Cincinnati moves forward to construct its stadium in Oakley or Newport, a tax-abated, high end CitiRama development on the proposed new Stargel Stadium site will permanently remove any development opportunities of this magnitude on the site proposed by FC Cincinnati. CPS has also directed FC Cincinnati to enter into a legally binding Community Benefits Agreement with a coalition of community organizations and residents in the West End neighborhood. FC Cincinnati has been informed the benefits demanded under the Community Benefits Agreement will cost upwards of $50 million over ten years comprised of an initial payment of $30 million plus $1-2 million annually thereafter. As with any business, FC Cincinnati must consider the economics surrounding this significant investment. By CPS adding $50-60 million in CPS and West End neighborhood costs to the investment by FC Cincinnati of approximately $400 million, the economics of privately funding a stadium in the West End community are impractical. This was a once in a lifetime development opportunity for a neighborhood that wants and needs new investment, and the jobs and business opportunities that would have come with it. FC Cincinnati regrets that it will be unable to construct a stadium in the West End community and have moved our focus to Oakley and Newport. While we are disappointed we will not be neighbors with our new friends in the West End, we are committed to remaining partners working to improve the quality of life in the neighborhood.

How we got here

FC Cincinnati is gunning for a Major League Soccer franchise, but before that can happen, it needs a soccer-specific stadium. The club has been juggling three potential sites – in Oakley, Newport and West End – but West End has long been the favorite.

In order for that to happen, though, FC Cincinnati would have needed to make a land-swap deal with CPS. The soccer club would raze CPS’ Stargel Stadium, build its new soccer stadium on that site and build CPS a new Stargel elsewhere in the neighborhood.

On Wednesday, the club offered $750,000 a year along with an ultimatum: Make a decision by 5 p.m.

The school board called an emergency meeting and went into an executive session to discuss the matter. After several hours and a rushed meeting between attorneys from both sides, CPS released a letter saying the club’s offer is half of what the school district wants.

Berding has said a finalized stadium plan needs to be ready for MLS by March 31.

Even if the school board approved the land swap needed for a stadium in West End, Cincinnati City Council would have had to approve tax incentives and zoning for the project.

A stadium plan for Oakley has already passed council, and the city has pledged $37 million in infrastructure for a project there.

In Newport, a so-called "super TIF" tax district has been in place at the proposed Ovation site for more than a decade, and the team has a memorandum of understanding with the owners of the land.