CLEVELAND, Ohio – City Council introduced legislation Monday that will authorize use of Cleveland tax dollars as part of a $140 million renovation of Quicken Loans Arena.
The proposal, a three-way partnership between the Cleveland Cavaliers, Cuyahoga County and the city of Cleveland, would dramatically alter the facility’s appearance and, the team says, would make the 22-year-old arena competitive by creating more space for dining, bars and public gathering.
The ordinance before City Council would commit the city to providing $88 million in admissions tax revenues between 2024 and 2034. It passed its first reading by a vote of 17-0.
Cuyahoga County is expected next week to approve borrowing $140 million for the project by selling bonds. By the time the bonds are paid off in 2034 with interest, the cost is expected to reach $288 million.
Supporters argue that the arena, one of the oldest NBA arenas in the nation without a major update, needs the renovations to ensure that Cleveland can continue to draw top entertainment acts.
But the ordinance already has critics on City Council who argue that the community has stronger needs that must be addressed and that taxpayer money could be put to better use, particularly in light of potential aid cuts from the state and federal government.
What’s the project?
The Cavaliers and the taxpayers would split the bill.
- The Cavs will provide roughly $122 million through increased rent payments for The Q. The team also would commit to a 10-year lease extension that would keep the team in Cleveland until at least 2034.
- The remainder would be paid jointly by Cleveland and the county through a variety of tax sources, including admissions taxes, bed taxes and sales taxes.
- The county will also provide $16 million, by dipping into the reserve fund it set up for the convention center and Hilton Cleveland Downtown.
The Cavs say they will pay for any over-budget construction costs and will cover the public’s share if taxes are less than anticipated. The Cavs also say they will not add a user fee or any other ticket surcharge to cover their costs.
What’s the timetable?
The Cavaliers want to be able to start construction this summer so work can be finished and the Cavs can host an All-Star Game in 2020.
After introduction Monday, the ordinance that would authorize Cleveland’s participation now goes to committees for public hearings. It will be reviewed first by council’s Development, Planning and Sustainability Committee. After that it will get an airing by the Finance Committee.
Council President Kevin Kelley said the ordinance could reach a final vote by mid-April.
In an interview Monday, Kelley said he wants the council to thoroughly review the plan, but also wants a decision in a reasonable time.
“My goal is going to be to beat this up as good as we can, but not drag it out,” Kelley said.
After the council meeting, Councilman Jeff Johnson, a candidate for mayor, and Councilman Zack Reed said the hearings must allow public input.
What was the criticism?
Reed, Johnson and Councilman Mike Polensek voiced concerns during the council meeting.
“This debate, this discussion we’re about to have, could be one of the most important to come before this body,” Polensek said, particularly given that the city could face revenue cuts from the state and federal government. “This Quicken Loans (Arena) issue should not just be held out by itself. We should be looking at it big picture.”
Reed questioned what the return would be for impoverished neighborhoods in Cleveland, particularly as they wrestle with an issue of violent crime. The project itself, he said, isn’t likely to create lots of jobs for neighborhoods.
“When the conversation comes to us, we’ve got to ask ourselves what is the return on our money,” Reed said.
“Is it important for us to spend $140 million knowing that we will get little or no jobs?” Reed asked. “The violence in our city will continue so long as we continue to put our heads in the sand and continue to believe that we are spending money on a project that is going to have a return back in our neighborhoods.”
Johnson struck a similar chord – that people who live in Cleveland neighborhoods need to see a return on the investment. Right now, he argued, they don’t benefit from the admissions taxes the city collects.
“Mr. (Dan) Gilbert (the Cavaliers owner) doesn’t have a right to that money. Miss Jones has a right to benefit from that money,” Johnson said. “We cannot give Miss Jones’ money to Mr. Gilbert and the Cavs.”