Looking at Newport as FC Cincinnati's potential future home

Show Caption Hide Caption FC Cincinnati eyeing three stadium sites FC Cincinnati is looking at three possible sites to build a stadium as part of its bid for Major League Soccer expansion.

Newport is emerging as Futbol Club Cincinnati's best option for building a stadium, a fact that became more clear Monday night when the burgeoning franchise unveiled the design of a $200 million soccer-specific venue.

Most of the renderings showed the stadium from the ready-to-build site in Northern Kentucky at the confluence of the Ohio and Licking rivers, although FC Cincinnati officials also continued to discuss locations in Cincinnati's Oakley and West End neighborhoods.

"Our preference is to be in Cincinnati," FC Cincinnati President Jeff Berding told a group of season-ticket holders on Monday.

However, he added, "we have to win the bid."

FC Cincinnati has to move rapidly on the stadium plan if it wants a chance to be chosen as a Major League Soccer expansion franchise. The plan must be in place by the end of the year, most likely not enough time to overcome major political and real estate hurdles in Cincinnati.

Regardless of timetable, a stadium involving any public money is likely a nonstarter in Cincinnati and Hamilton County, where many taxpayers' blood still boils over having to foot most of the bill for the Bengals and Reds' venues.

That moves Newport to the forefront, and Northern Kentucky city offers what Cincinnati doesn't have: a ready-to-build site in a primo location along the riverfront. Kentucky offers fewer public funding options than Ohio when it comes to sports venues. In Kentucky, for example, state law prohibits the use of sales tax money for stadiums.

Wherever FC Cincinnati goes, the club has plans that call for the private sector to pony up at least $100 million for a new stadium. The idea is for public money to cover the rest of the cost.

Approving a tax increase large enough to fund a $100 million mega-project through property, payroll or insurance taxes never been done in Kentucky, said J.D. Chaney, deputy executive director for legislative affairs for the Kentucky League of Cities, the main lobbying arm for Kentucky Cities.

"On a large scale project, it is not practical to fund a large project with a property tax," Chaney said. "You would not draw a significant enough funds."

But what few options Newport does offer could be more than what the soccer franchise would get anywhere else. In Kentucky, the two most likely options for public financing would be a tax-increment financing (TIF) district and tax breaks.

Any soccer stadium would likely have to involve a combination of those sources.

“It’s called putting together your capital stack,” said Jay Fossett, former Covington city manager. “You might get some state incentives, city incentives, tax breaks of some sort.”

Kentucky cities and counties often work out deals with developers. Under these deals, developers will either make reduced tax payments or be absolved of 20 to 30 years of state and local taxes.

The idea is that the development will bring in jobs to outweigh the lost taxes. The local governments would issue industrial revenue bonds to finance the project at a lower interest rate. Newport on the Levee and SouthShore in Northern Kentucky, as well as other major developments, got such deals.

The state, county, city and local school boards must sign off on the projects.

Tax-increment financing is probably a slam dunk for a Newport stadium, although it's uncertain how much money it would generate. Once envisioned for the mixed-use Ovations development, the site is part of a TIF district.

TIF is a nuanced financing mechanism which essentially allows for some tax dollars generated from new businesses and homes built on the site to be used to pay off debt on some site infrastructure. In Kentucky, TIF can only pay for public infrastructure, including parking garages, streets and utilities.

Northern Kentucky-based Corporex owns the Ovations site and thus controls the TIF. Company Chairman Bill Butler did not return a message seeking comment. It's worth noting that Berding started his career working for Butler, and they have remained close for several years.

Newport City Manager Tom Fromme said he talked briefly with Corporex CEO Tom Banta during a recent event in Covington. Banta asked Fromme what he would think about a soccer stadium on the site, Fromme said.

"It sounds good, right?" Fromme told The Enquirer.

Banta declined comment.

Here's Newport, Ky., site @fccincinnati is eyeing for new stadium, in case you're wondering. This very well could be where stadium ends up. pic.twitter.com/4Kay31cP2d — Jason Williams (@jwilliamscincy) May 31, 2017

FC Cincinnati has not officially talked to the city of Newport, Fromme said. It's believed the club has not launched a lobbying effort with Kentucky politicians like it has in Ohio. Berding, a former Cincinnati city councilman, did not return a text message seeking comment on Tuesday.

But perhaps FC Cincinnati doesn't have to aggressively lobby Kentucky politicos and government officials, considering the club's options for public financing are so limited by the law. Only the state can impose a sales tax, prohibiting citizens from attempting to raise taxes through a ballot initiative.

Plus, the soccer club might want to avoid public push back from a land where tea party groups fought the property tax that pays for libraries.

Public officials are reluctant to comment on soccer stadium until something is proposed.

"The pitch will need to be made based on the facts," said Campbell County Judge-executive Steve Pendery. "I'm interested to see what everyone comes up with."