The Pittsburgh-Allegheny County Sports & Exhibition Authority (SEA) confirms that the Steelers used a variety of tax credits – as its 29 ½-year lease at Heinz Field allows – to offset all of the also lease-stipulated $25 million rent for the first decade of occupancy.
Talk about a nod-nod, wink-wink sweetheart deal. You get taxpayers, through a packed county Regional Asset District board, to pony up $13.4 million annually to help pay for the lion’s share of a new football stadium.
Then, you essentially get rent-free use of a facility from which you take Amost of the profits. For? For not only paying all of your personal and corporate taxes but for the members of visiting teams paying their personal taxes, too, among other credits.
Don’t try this at home. After all, these are professionals.
It’s a climate in which (as Policy Brief Vol. 18, No. 34 details) woefully insufficient dollars are left for the SEA to administer upgrades to the facility – upgrades that, given the benevolence of the lease — should be covered by the franchise.
Interestingly, the SEA, when first asked for the lease payment information, balked, forcing this institute to file a state Right-to-Know request. The authority suddenly produced the information the same day the institute posted and sent to media the aforementioned white paper and an op-ed on the same topic.
That such a lease was negotiated all those years ago is a public policy failure. But this is the kind of mess that typically results when legacy-seeking pols serve not the public interest but interests of the barons of sport.
The Allegheny County Airport Authority board of directors, on Sept. 21, will consider a pair of proposals that will forbid board members from directly investing in airlines with which the authority, et al., does business.
Never mind that this should have been standard operating practice from the get-go.
The move was precipitated by two revelations:
The first was that the board’s vice-chairman, Robert Lewis, not only was an investor in OneJet but that, as part of an Airport Authority subsidy deal to the airline, became a non-voting member of OneJet’s board.
The second was that fellow board member Jan Rea and her husband also had invested in OneJet.
But board legal counsel Jeffrey Letwin rationalized the conflict by noting that neither had voted on any matter involving OneJet and that recusals on any votes involving the airline would eliminate any conflict of interest.
The full board did, however, give Airport Authority CEO Christina Cassotis sole authority to dole out subsidies to the airlines. That would include for OneJet, now being sued by the authority to recover the bulk of a $1 million subsidy for non-performance.
OneJet has suspended all service in its former operating territory, pledging to resume flights next month.
The first anti-conflict proposal would require any board member with direct investments in airlines doing business with the authority to divest or resign from the board. The second would ban the practice going forward for all board members.
Hear! Hear! But, again, why was that commonsense measure not automatically in place?
Amazingly, and further suggesting that Letwin has a confused appreciation of what conflicts of interest, real or perceived, really are, is this:
Letwin told the Post-Gazette he hasn’t decided yet whether Lewis and Rea will be allowed to vote on the new proposals. Really? Clearly, they are conflicted in this matter.
Additionally, the P-G reported that Letwin still doesn’t think there “was ever anything wrong” with the Lewis and Rea investments. The new policies are “just to address some of the issues that have been raised” regarding the matter, he says.
Oh, that’s all?
While it’s welcome news that the Airport Authority board will have the chance to rectify a serious lapse, more’s the pity for the long-running tone deafness of this public authority.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org)
