First off, can you go over what your role was back when the new stadiums were being built?
I started in the Mayor’s office working on inter-governmental relations and became the Chairman for the Stadium Authority and was Executive Director of the Urban Development Authority in Pittsburgh.
What were you trying to accomplish early on?
In the early days we tried to develop the Three Rivers area. The city was successful in building a new stadium but as part of the deal, the Pirates were given control of the development of the area and that was a struggle until the newer stadiums were built.
We went through a series of negotiations – the Pirates were involved and were given full operational and revenue rights. Then came Curt Flood and free agency and the Pirates were losing money and sued the city. They were looking for more investment and after protracted negotiations got an increased lease subsidy. The leases for the Pirates and Steelers became equal – before that the Pirates paid much more but got the concessions revenue from the Steelers.
Why did the Steelers allow that as an option?
As the Steelers became successful they were able to contribute more but the Pirates wanted compensation for paying more rent. The Pirates were supposed to develop the area around their stadium – that was their responsibility as they had the development rights. But they had a hard time doing so.
The parking lot vendor as part of the inaugural deal had to pay a high minimum rent and in exchange got a 40-year lease with 10-year extensions. They are still the parking lot vendor for the area. Financing garages then didn’t work in the area. Now they are more lucrative with the subway running in the city.
Is the goal really to make the stadium the hub for development?
That is the goal. In the last round of negotiations parking was a big issue. The city also went through the steel industry decline but had major building go up since, downtown under Mayor Caliguiri. There just wasn’t a big demand for development then on the North Side.
Now they have issues again with a lot of the vacant lots due to Covid. So there hasn’t been much further development, though the Pirates are working with Oxford to develop a site adjacent to the stadium now, so I hear.
What was the hardest part of the process for you then?
I had a young assistant come up to me once and tell me she was confused as to why all of these people were suing us. The Penguins, Steelers, Pirates….they all sued us because they want new leases and more money. When we built the Science Center the Steelers sued us because they felt it hurt the fans by taking away parking. The Pirates sued us. The Galbreaths wanted to sell the team but the top Pittsburgh corporations each put up some money and the city borrowed $28 million and handed that over to the new owners. They had some success during the Bonilla, Bonds years but never made it to a World Series.
At lunch once I told Tom Murphy, the new Pittsburgh Mayor, that he would spend more time with the sports teams than he would ever believe. Later on I ran into him at a gas station and he said “George, you were right!”
What can the city realistically do about the need for stadium development with Acrisure as it needs more revenue but also needs enhancements to get it?
The current lease is up in 2031 – the new mayor will have to deal with that sooner rather than later. The good news is that nothing has been developed – no more space has been already utilized for something else. I’m not sure where they can go. When we did our first development project – that was the Science Center. We took out a parking lot to do that and had to negotiate with PennDot to acquire the land. The city agreed to pave it but we also had to replace the parking space for the vendor with an equal amount of parking – per the agreement.
They may be able to expand the stadium some to add more seating like they did earlier. The question is where the funds to do so come from. The last time we were able to pass a sales tax – it was a protracted fight. We needed regional financing and got the Regional Asset District Tax passed – a one-percent addition to the sales tax. The revenue went to the stadium. The economy improved and the tax generated more than we thought it would – that gave us excess money to finance the two stadiums.
Are there unique ideas to raise more revenue?
The thing is, even if they expanded the stadium, I’m not sure they can sell enough tickets to make it work. I went to the Packers game and for the first time I saw more opposing team jerseys. There are seemingly always tickets available for games. They have to feel confident if they are going to spend millions on an expansion that they can sell out games and get people to actually come to spend money on parking and concessions. Without that it doesn’t work.
You need to find a way to get more revenue somehow though. Players’ salaries are increasing and operation expenses are too. It’s an expensive stadium to maintain – the escalators are really outdoor escalators – they need constant maintenance.
There are only so many concerts you can hold too. Pitt plays there and generates some revenue. But there just aren’t that many big performers that generate big audiences now – Taylor Swift, Springsteen….the Rolling Stones….And the Pirates and Steelers stadiums’ compete for these as well. There are tractor pulls, motocross….there just aren’t a lot of those things anymore.