As Cincinnati moves forward with its new casino in Pendleton, Chicagoans are dealing with a political setback that is preventing a casino from operating in Illinois’ biggest city. While Chicago Mayor Rahm Emanuel (D) supports the idea, Illinois Governor Pat Quinn (D) is concerned expanded gambling could open “loopholes for mobsters.” More from Next American City:
Emanuel insists that a downtown casino is so lucrative an economic development tool that any delay in construction is depriving the city of valuable tourist dollars and a new source of educational funds.
The debate is just the latest in a decades-long controversy over what role, if any, casinos can play in the revival of America’s cities. The economic downturn has given states an impetus to open up new sources of revenue, with gambling often viewed as low-hanging fruit. Twelve states have expanded gambling options in the last three years, 22 now permit commercial casinos (up from two in 1974), and Hawaii’s legislature is currently considering plans that would leave Utah as the sole state without some form of legalized gambling.
Depending on the outcome of the political struggle, Chicago could supersede Philadelphia as the largest American city with legalized gambling.
Art Modell’s two most notorious business decisions – the 1963 firing of Paul Brown and the 1996 move of the Browns to Baltimore – each had profound unintended effects in Cincinnati. Upon Modell’s recent passing on September 6, Cincinnati media noted that Brown’s ouster led directly to his 1968 founding of the Bengals, but the story is much more complex.
In 1961 Modell bought Paul Brown’s minority share of the Cleveland Browns for $500,000, and was then contractually obligated to pay his head coach’s salary for several years after his firing. It was with this money that Brown and investor Austin Knowlton established the Bengals and resolved to beat the Browns on the field and Modell in the business of owning an NFL franchise.
But the greater issue missed by the local media was Mike Brown’s 1996 negotiation of a stadium lease that, in two ways, assures the Bengals franchise he inherited from his legendary father will avoid a similar fate to Modell’s Browns and Ravens.
First, Brown will never be burdened with unpredictable stadium maintenance costs or the loss of a tenant. Second, the terms of the Paul Brown Stadium lease are so favorable that in late 2011 the Brown family paid approximately $200 million in cash to buy out minority owner Austin Knowlton. With no significant minority owners remaining, the Brown family is invulnerable to the sort of hostile takeover that brought down Art Modell — twice.
“The Move”
On December 17, 1995, just weeks after Modell announced his decision to move the Browns to Baltimore, footage of Browns fans tearing apart Cleveland’s Municipal Stadium was broadcast nationwide:
Scenes of Browns fans tearing apart Municipal Stadium were shown across the United States in 1995.
The groundwork for this mob scene was laid decades earlier, when Modell negotiated control of Cleveland Municipal Stadium from the City of Cleveland during its infamous financial crisis. The terms of the deal gave Modell all revenues – including luxury box revenue – from the city-owned stadium in exchange for upkeep and nominal annual rent. For 20 years Modell was able to maintain the 1930s-era stadium in part with luxury box revenue collected from the Indians (this lack of revenue for the Indians helped make them perennial AL East basement dwellers).
Folklore surrounding The Move speculates that Art Modell failed to anticipate that luxury box owners would abandon the Browns entirely after the Indians moved to Jacobs Field in 1994. But more astute observers assert that Cleveland’s business community used The Gateway Project – which built Gund Arena for the Cavs and Jacobs Field for the Indians but made no provision for Modell’s Browns – as a way to strip Modell of his Indians luxury box revenue and send his finances into a tailspin.
Mike Trivassono, sports host for Cleveland’s WTAM, asserts that this trap was sprung in order to transfer ownership of the Browns from majority owner Art Modell to minority owner Al Lerner. In 1999 the NFL sold the new Cleveland Browns franchise to Lerner for $500 million, and in 2012 Lerner’s son sold the team to Jimmy Haslam III for $1 billion.
The Move’s Effect in Cincinnati
After Paul Brown died in 1991, his son Mike assumed control of the team. The younger Brown, a graduate of Harvard Law School, maneuvered to put the Bengals well ahead of the Reds in negotiations with Hamilton County for a new stadium and lease – he would not be cornered by Cincinnati’s other professional sports franchise in the way Modell allowed himself to be compromised by Cleveland’s Gateway Project.
Brown knew from his experience sharing county-owned Riverfront Stadium with the Reds, and Modell’s loss of the Indians, that the NFL’s financial structure cannot work in multi-purpose stadiums. He also knew that terms that removed Bengals ownership from any responsibility in maintaining or upgrading their future stadium were essential to eliminating unknowns from later years of the lease.
It is important to recognize that the lease is structured so that the Brown Family – Mike Brown will be in his 90s if he lives to negotiate a new lease –will enter negotiations in the mid-2020’s in a position of financial strength, rather than Modell’s state of desperation.
Political and Cultural Fallout In the 12 years since the first game was played at Paul Brown Stadium, Hamilton County’s financial obligations to the Bengals have remained a current event. The media and serving Hamilton County Commissioners are correct in placing some blame on the Commissioners who structured the stadium fund around an expected 3% annual increase in tax receipts. The source of the ongoing stadium controversy, however, is largely the creation of Hamilton County’s current commissioners who continue to play politics with the residential property tax rollback enacted in 1996.
The deal cut to fund the construction of Paul Brown Stadium has plagued Hamilton County since its passage. Photograph by Jayson Gomes.
By refusing to budge (except in 2010) on the inconsequential amount of money the rollback saves county homeowners, they are able keep the county in a perpetual state of crisis. They have then used this artificial crisis to justify shady activities, such as the recent sale of Drake Hospital.
The Long-Term Future of Paul Brown Stadium
Part of the 1990s effort to fund construction of two new stadiums in Cincinnati involved smearing Riverfront Stadium. A stadium celebrated as “The Jungle” during the 1988 Superbowl year was suddenly derided as “sterile”. Images of exposed parking garage rebar convinced the public that the stadium was too costly to repair. And other cities –notably Cleveland and Pittsburgh – had already started on new stadiums.
Save an unforeseeable change in the NFL’s revenue sharing arrangement, upon the expiration of the Bengals lease in 2026, Paul Brown Stadium should still be a profitable home for the Bengals or another NFL franchise. This means the motivation for a new football stadium will not come from the Brown family or the ownership of a replacement NFL franchise, but rather Hamilton County, should it determine that renovation and ongoing maintenance costs will approach the cost of debt service on a new stadium.
Lost in the never-ending stadium conversation in Cincinnati was the news that even after the epic drama and financial promise of The Move, Art Modell was forced to sell his majority ownership of the Baltimore Ravens in 2004 to a minority owner. As a result, just 1% of Ravens ownership will be passed onto his heirs.
In 2026 memories of Art Modell and The Move will have faded in Northeastern Ohio and his heirs might have completely exited Ravens ownership. But the grandchildren of the man Modell fired back in 1963 will still be in the football business, in complete command of a franchise worth well over $1 billion, and in negotiations for a new lease with Hamilton County or the ownership of a stadium elsewhere in the country.
Chicago is moving on from its infamous Cabrini-Green housing projects with a plan to create a mixed-income neighborhood. The plan, however, is facing early criticisms that have also troubled Cincinnati’s similarly built City West development. More from Salon:
“They still be gangbangin’ out here at night,” says Andrea of the neighborhood. Still, it’s nothing like it once was. There’s now a supermarket, a Starbucks, bicyclists riding by, and these immaculate apartment buildings. Andrea says it’s the nicest space she’s ever lived in. A 150,000-square-foot Target is in the works, and an urban farm sprung up nearby in 2007.
But though Andrea likes the new buildings and the neighborhood, she recognizes that this sort of carefully engineered milieu is an environment that doesn’t exactly feel natural, even to the people who live here. “We have meetings where people talk to each other,” she says, referring to activities organized by the management. But aside from that, she says there’s not much interaction between the low- and high-income residents. “You can’t barbecue on the property,” says Andrea. “People aren’t really hanging out together.”
In the early 2000s the Ohio Department of Transportation (ODOT) formulated plans to rebuild and widen Interstate 75 between the Ohio River and I-275. The overall plan was divided into three project areas: The Brent Spence Bridge, Millcreek Expressway (Downtown north to Paddock Road), and Thru the Valley (Paddock Road north to I-275).
Originally all fifteen miles of work were expected to be completed by 2020, but ODOT’s financial crisis has meant just three of the 17 phases comprising the Millcreek Expressway and Thru the Valley sections have commenced construction. The complex character of the planned reconstruction means some phases must be built before others but little benefit to safety and traffic capacity will be realized until nearly all sections are complete.
September 2012 I-75 reconstruction photographs by Jake Mecklenborg for UrbanCincy.
In short, work currently underway will build retaining walls and build new overpasses for an expanded highway, but the expressway itself cannot be widened in these areas until adjacent phases are completed. So improvements currently under construction at Mitchell Ave. might be decades old before they are put to full use – or worse, these future phases might never be built.
Thus far, ODOT has only completed the $7.1 million second phase which rebuilt the Monmouth Street overpass in Camp Washington. Originally planned to be built as part of Phase 5 (Hopple Street to Mitchell Avenue), the Monmouth Street Overpass was deemed “shovel-ready” and funded through the American Recovery & Reinvestment Act of 2009.
The $53 million reconstruction of the Mitchell Avenue Interchange (Phase 1) began in 2011. Construction crews are presently demolishing the 57-year-old Mitchell Avenue and Clifton Avenue overpasses and preparing the right-of-way necessary to widen I-75 from six to eight lanes.
ODOT has scheduled a summer 2014 completion for the Mitchell Avenue work.
Modification of the Colerain/Beekman/I-74 Interchange (Phase 3) also commenced in 2012. This $13 million project is also currently taking place, and is also scheduled for completion in 2014.
An ODOT official explains what led to the financial troubles of ODOT at a Transportation Review Advisory Council meeting in 2011. Video by Jake Mecklenborg for UrbanCincy.
Yesterday ODOT Director Jerry Wray announced funding for the first phase of the $467 million Thru The Valley project. Although funding is now programmed for reconstruction of I-75 between Shepard Lane and Glendale-Milford Rd. beginning in 2021, there is still no definite timetable for the Thru the Valley’s other 7 phases.
These delays in work on I-75 in Cincinnati illustrate the central problems with state and federal gasoline taxes: the taxes are not automatically adjusted with inflation, causing revenues to drift downward over time, and proceeds fall when high gas prices motivate people to drive less. Until either or both gasoline taxes are raised, or ODOT identifies new funding sources, reconstruction and widening of I-75 will proceed at a glacial rate, and drivers will realize little benefit from completed early phases.
Due to the Reds home schedule, we had to adjust our regularly planned meeting time for this month’s URBANexchange at the Moerlein Lager House. Instead of being held on the first Tuesday of the month, we will be holding it on Thursday, September 13 from 5pm to 7:30pm.
This month we will be getting together just as we have been, but to jumpstart the conversation we thought we would give it a transit theme. We hope you come to discuss ideas that could help improve urban mobility.
Attendees enjoy the Moerlein Lager House and conversation at the August 2012 URBANexchange. Photograph by John Yung for UrbanCincy.
All of the ideas submitted will be reviewed by the UrbanCincy team. The person with the winning submission will then have their idea profiled in an UrbanCincy.com feature story. Will we also do a drawing, from the submitted entries, for a free Metro monthly bus pass courtesy of the Southwest Ohio Regional Transit Authority (SORTA).
The themed transit discussion corresponds with the Metropolis & Mobility Seminar taking place at the University of Cincinnati, and we have confirmed that Paul Grether, Metro’s Manager of Rail Services, will be among those in attendance.
Other notable transportation experts are also expected to be confirmed within the coming days, so stay tuned for those announcements as we get closer to the event date.
Those interested in attending are encouraged to stop by the biergarten at the Moerlein Lager House (map) anytime between 5pm and 7:30pm. There is no entry fee, but we do strongly encourage you to support our host establishment by purchasing food or drink while you are there.
Due to scheduled events at the Moerlein Lager House, it is expected to be a bit more crowded than usual. As a result, we recommend that you arrive early so that we can reserve additional space as is necessary.
