THIS IS AN ADVERTISEMENT.
The challenge of sports and convention facility financings. Sports and convention facilities pose a unique challenge in terms of public finance. Federal tax law places stringent rules on the use of tax exempt bond proceeds; they can be spent for governmental purposes, but not for private activity purposes. This requires a careful analysis of where dollars are spent and who pays for debt service on any bonds issued for a sports or convention facility. Other issues include state constitutional and statutory provisions, naming rights considerations and the bidding of public contracts.
Seasoned judgment and creative solutions. The careful structuring of a sports or convention facility financing requires seasoned judgment, which allows for creative solutions. Starting in 1996, as bond counsel, we began financing for Paul Brown Stadium (home of the Cincinnati Bengals) and Great American Ball Park (home of the Cincinnati Reds), and related parking, resulting in the issuance of $695,000,000 of sales tax bonds, and $24,500,000 of parking revenue bonds issued by Hamilton County, Ohio, the last of which were issued in 2001. Over the course of these years, we drafted changes to the Ohio Uniform Public Securities Law, and a new section of the Ohio Revised Code to permit issuance of bonds backed by a dedicated county sales tax.
As bond counsel for convention facility financings, we have been instrumental in crafting agreements between overlapping jurisdictions, such as one between a city, a county and a convention facilities authority in order to provide for the issuance of special revenue obligations by the convention facilities authority secured by a pledge of various tax and other revenues of the city and the county. Due to the pledge of these various revenue sources, a financing structure was created which included first lien, second lien and junior subordinate bonds.
Assistance with additional funding options. We can assist with additional funding options which may be available for infrastructure improvements of benefit to the sports or convention facility through state and federal grants or low cost loans to pay for streets, parking, transportation centers, expressway access, parks and green space. It is also possible to use Tax Increment Financing (TIF) for infrastructure improvements.
Tax Practice. Our Tax and Financial Analysis Department is dedicated to providing the most up-to-date advice on tax issues (see "TAX AND FINANCIAL ANALYSIS"). Their knowledge is crucial not only to avoid problems related to the private activity issue, but also to avoid missing permissible funding options. We have also worked on taxable financings as an alternative for projects which either cannot qualify for tax exempt financing or for which the obligor of the financing chooses not to pursue the tax-exempt debt route due to the rules and requirements associated with the issuance of tax-exempt debt.