Two banking companies are willing to put their financial muscle behind the $600 million riverfront development project known as The Banks so that construction is not delayed.

        Firstar and PNC banks say they will guarantee payment on a series of three bond issues that will allow construction of $68 million in parking garages to start in 2003.

        The commitment is significant because Hamilton County is responsible for building the garages. County leaders said the county is unable to finance construction now because sales tax revenues have come in far below expectation.

        County officials said construction wouldn't begin until sales tax revenues returned to normal. A portion of the sales tax revenues would be used to pay for construction of the parking garages and the interest on the financing.

        The plan was presented to the county by the Port of Greater Cincinnati Development Authority, which was created by the county to oversee riverfront development beyond the new stadiums.

        Under the proposal, either the Port Authority or the county would issue 20-year, tax-free bonds in 2003 for $11 million; in 2005 for $18 million and in 2006 for $9 million. In addition, the proposal calls for the Ohio Department of Transportation to provide $30 million in loans over the same period.

        Firstar and PNC say they would cover debt payments on the bonds if the county cannot. Firstar would be the lead bank and has committed to the project; negotiations are still being finalized with PNC.

        The county still would be ultimately responsible for the cost of building the garages, but its credit rating wouldn't be at risk if sales tax revenues are not sufficient to make payments on the debt in any given year.

        “A commitment to guarantee any shortfall for such an extended period of time without major fees associated with it is very unusual,” said Louie George, a Port Authority board member.

        “The risk is that the financial institutions don't know when they would have to give their money to cover a shortfall, and they don't know when they'll get it back,” Mr. George said. “They have, through civic commitment, decided to absorb that risk.”

        In addition, the county would use “residual cash” from the sales tax to pay debt on the parking garages — meaning debt on The Banks garages is only paid after the county has paid debt service on stadium bonds, the property tax rollback and its contribution to Cincinnati Public Schools.

        Even then, only 85 percent of that residual revenue would be used to pay off the development's parking garages. The remaining 15 percent would be held by the county to pay off early the bonds issued during construction of the stadiums.

        County officials were given the proposal Thursday and said they need about a week to consider it. But County Administrator Dave Krings said the proposal is, at least, a step in the right direction.

        “It's better than the last (idea for interim financing), which really amounted to a general obligation to the county,” Mr. Krings said. “It doesn't appear this one represents that.”

        It is unclear how much interest the county would have to pay, if the financial institutions had to cover payments for the government.

        Jack Rouse, chairman of the Port Authority, said all of that would be negotiated later. The main thing, Mr. Rouse said, is that this plan resolves all the concerns raised by the county.

        “The concept was that the financial institutions would be actually the ones at risk in all of this, and nothing beyond that half-percent sales tax would ever be involved,” Mr. Rouse said. “If we wait, we'll miss an opportunity and confirm to developers that we just don't seem to get things done around here.”

        The plan doesn't address all of Commissioner Todd Portune's concerns.

        Mr. Portune has been working with Port Authority members for months to come up with an alternative financing plan. He still wants, among other things, a renegotiation of the Bengals lease at Paul Brown Stadium and more money from the state to free up millions of tax dollars for other riverfront development.

        “This does not risk the county's general fund, but it likely only adds considerable length to the time of the tax,” Mr. Portune said. “There are a number of uncertainties with the plan.”

        Still, Mr. Portune believes the county has a responsibility to define its plan for moving the development forward.

        “It's important to keep the ball moving, given the fact that taxpayers have $1 billion at stake on the riverfront already,” Mr. Portune said. “We need to articulate a clear proposal that moves the project ahead in a way that is fiscally responsible.”

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