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Allegheny

Pittsburgh sports venues, convention center secure new $800K pot of taxpayer money

Natasha Lindstrom
| Tuesday, Dec. 4, 2018, 9:27 p.m.
A view overlooking PPG Paints Arena from the Steel Tower in Downtown Pittsburgh on April 11, 2017.
A view overlooking PPG Paints Arena from the Steel Tower in Downtown Pittsburgh on April 11, 2017.

Pittsburgh’s sports venues will share in a new pot of $800,000 in taxpayer money earmarked for major repairs and upgrades.

The Allegheny Regional Asset District, an independent body known as RAD, has agreed to award the Sports and Exhibition Authority an $800,000 grant to create a multi-facility capital fund. The SEA had requested closer to $1.2 million, said Dan Griffin, board president of RAD, which is funded using half the revenues collected via an extra 1 percent sales tax in Allegheny County.

The SEA must use the money “on capital improvements for the public facilities” that it operates, including Heinz Field and PNC Park in the city’s North Shore, PPG Paints Arena in Uptown and Downtown’s David L. Lawrence Convention Center. It should not be spent on everyday maintenance, RAD officials said.

“As the facilities get older, the capital repair needs, as you would expect, increase, too,” Sports & Exhibition Authority Executive Director Mary Conturo said. “It’s very important to us, and we are very appreciative of it.”

Teams will pitch in, too

The Penguins, Pirates and Steelers each has agreed to make annual contributions of various amounts to the same fund, which was a key factor in RAD’s volunteer-run board deciding to award the grant, Griffin said.

“It’s not going to go up,” Griffin said of RAD’s $800,000 commitment, which could be an annual award going forward. “They will still have to re-apply next year.”

Conturo said the money will add to capital reserves available to help with a variety of needs, such as replacing dilapidated concrete and repainting steel.

“There are existing needs with repairs to the facilities, and we are only spending what we are obligated,” Conturo said. “We submitted the application for this purpose and because we are regional assets.”

The new fund is in addition to $13.4 million that RAD will give the SEA next year toward debt payments for the stadiums and convention center dating to their construction years ago.

The SEA ended 2017 with a $27.4 million in operating revenue and an operating loss of $34.5 million, which “without depreciation and amortization expense” would have amounted to a $12.8 million surplus, the SEA’s 2017 financial audit said . Its 2018 operating budget is balanced with no operating cash flow issues, auditors said.

The SEA’s operating revenues come from ticket surcharges, team rent, parking revenue, convention center rental income, events, catering, concessions and other fees charged for facility use.

Last year, Heinz Field ticket and rent income increased from $4.2 million to $5.7 million, including January 2017’s playoff game, while ticket income from PNC Park dropped by $18,400 due to lower attendance, the audit shows. The convention center boasted its highest gross revenue yet, at $9.2 million in 2017, up $1.7 million from the previous year.

Among payments that subsidized SEA facilities and operations last year: $14.4 million from RAD for debt service; $17.8 million from the Allegheny County hotel rooms tax to operate the convention center and repay debt; $10.9 million in state grants from the state’s Economic Development and Tourism Fund for convention center operations and repayment of debt; $7.6 million from Rivers Casino; and $4 million from the state’s Redevelopment Assistance Capital Program toward constructing infrastructure in the Lower Hill District.

As RAD’s debt burden gets smaller and sales tax revenue climbs, the SEA asked the board to direct some of the freed-up money in the form of the new capital fund, Griffin said.

He said that the SEA’s annual $14 million debt contributions to the SEA have remained relatively stable over more than a decade, while the percentage of RAD’s budget that supports small arts and cultural groups has increased from 9 to 12 percent.

Record-high RAD budget

RAD’s overall 2019 budget is a record-high $108.6 million, about $70,000 more than its preliminary budget released in October and $8.5 million higher than the 2018 budget. It includes grants to 104 organizations, up from 46 organizations that benefited from RAD’s $53 million inaugural budget in 1995.

Also new in this year’s budget is $2.5 million set aside for a competitive grant program that will be available next year, with the broad criteria of “bold, forward-looking projects” to inspire the region. Requests for proposals will go out in early 2019.

“We are looking for unique ideas that will truly make an impact,” Griffin said.

Formed in the 1990s to prevent the region’s libraries and parks from closing, RAD has pumped more than $4 billion into the region since its inception.

More than 70 organizations received operating grant increases in 2019, including Arcade Comedy Theater, City of Asylum, Film Pittsburgh, Kente Arts Alliance, Quantum Theatre, the Pittsburgh Cultural Trust and the Pittsburgh Symphony.

The 2019 budget includes $101.5 million in new sales tax receipts, with the rest coming from the entity’s grant stabilization fund.

RAD’s allocation committee made its recommendations after evaluating each group’s regional impact, financial status and plans for spending the funding they requested. Awarding grants also gives RAD access to the entity’s records, financial information and other factors so the authority can be sure it’s doing its “due diligence” and efficiently serving people in the region, Griffin said.

Thirty-one percent of the 2019 budget will go to libraries; 31 percent to regional parks and trails; 13 percent to stadiums and the convention center; 13 percent to arts and cultural groups; and 8 percent to regional facilities such as the zoo and National Aviary.

About 3 percent, or $3 million, goes to Port Authority, and less than 1 percent will be spent on administration.

Natasha Lindstrom is a Tribune-Review staff writer. You can contact Natasha at 412-380-8514, nlindstrom@tribweb.com or via Twitter @NewsNatasha.

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