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NFL lockout won't cost Heinz Field

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Friday, March 25, 2011
 

Every time someone buys a ticket to a Steelers home game, a sliver of the proceeds goes toward paying off debt on Heinz Field.

If the National Football League lockout that began March 12 sacks the 2010-11 football season, the Sports & Exhibition Authority would tap into a reserve of ticket surcharges for the first time since the North Shore stadium opened in August 2001 to replace Three Rivers Stadium.

"We have enough in reserve to cover about one year of debt service," said Mary Conturo, executive director of the SEA, which owns the 65,050-seat stadium. That amounts to approximately $1.5 million in reserve, the equivalent of 500,000 tickets sold.

In Florida, Tampa Bay Buccaneers officials agreed last week to grant an interest-free loan to the Tampa Sports Authority, which owns Raymond James Stadium, if the football team doesn't play next season because of the lockout, the St. Petersburg Times reported. The loan would equal the amount lost on ticket surcharges and would be repaid to the team once surcharges begin flowing again.

Without the loan, Hillsborough County, Fla., and Tampa would stand to lose about $1.2 million in surcharge proceeds, the newspaper reported.

In Pittsburgh, the SEA prepared for an NFL work stoppage, said David Donahoe, director of the Allegheny Regional Asset District, which pays $13.4 million yearly toward debt for the $281 million Heinz Field, PNC Park and the David L. Lawrence Convention Center.

"They had it all spelled out in their lease," Donahoe said of the agreement between the Steelers and the SEA.

Each Steelers ticket sold includes a surcharge equivalent to 5 percent of its value, up to $3 a ticket. Non-NFL events, including concerts and University of Pittsburgh Panthers games, have a 5 percent surcharge capped at $2. It increases 25 cents in the stadium's 10th year.

Each year, the SEA collects more than it needs for the $1.5 million debt payment from Steelers home games and other events, Conturo said. The excess goes into a reserve account that pays for stadium improvements. For instance, the authority paid $1.9 million and the Steelers chipped in $2.4 million in 2006 to replace a malfunctioning scoreboard.

The capital reserve contained about $5 million in December, the last time the authority provided a figure after Steelers President Art Rooney II proposed adding up to 4,000 seats to the stadium.

Conturo initially agreed to discuss how much the surcharge brings in during a season of Heinz Field events, but she did not return subsequent calls.

If the reserve fueled by the surcharges is depleted, the Steelers must replenish it.

"When the team starts producing money again, surcharges plus ticket revenues pay back everything that was covered by the debt service reserve fund and (bond) insurance. It refills the reserve fund," Conturo said.

"There really isn't any significant risk in the bonds," Mark Hart, business manager for PSSI Stadium Corp., wrote in an e-mail. PSSI manages Heinz Field and other Steelers real estate interests. Hart declined to comment further.

Fans who attend events at Heinz Field are not the only ones paying off debt on the stadium.

The Allegheny Regional Asset District makes its payment to the SEA to pay down principal and interest on the stadiums, which opened in 2001, and the Downtown convention center, which opened in 2003. RAD gets money from the extra 1 percent sales tax collected in Allegheny County.

The yearly payments are due through 2031, Donahoe said, for a total of $268 million.

 

 

 
 


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