Stadium Finance

Cavaliers Stadium Scam Moves Forward Thanks To Incompetence

No one can justify why Cuyahoga County should pay for this scam, but it's still gonna happen

Stadium Finance
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Mar 16, 2017 at 11:28 AM ET

It looks like Cleveland Cavaliers owner Dan Gilbert will get those sweet glass walls Quicken Loans desperately needs because… well… none of the politicians who voted to move the bill out of committee on Tuesday can offer up anything resembling a cogent reason why they did so.

To recap, Gilbert wants Cuyahoga County—which remains a billion dollars in debt—to renovate Quicken Loans Arena, erect some cool glass walls, and build a shopping megaplex that will enrich Dan Gilbert. To do so requires floating a $140 million bond, which, by the time it and the accumulated interest is paid off in 2034, would end up costing $282 million. The Cavs’ rent would cover $122 million and the rest would be culled from a combination of hotel, sales, and admissions taxes to be paid out by the city of Cleveland, the Destination Cleveland tourism nonprofit, and Cuyahoga County.

Oh, and the county also has to cough up an additional $10.9 million to cover any cost overages, which, like, never, ever happens when renovating or building a sports arena. Only after the Cavs spend that money that’s just sitting there would they pay for additional expenses.

Cavs representatives and legislators in favor of the measure are fond of saying there will be “no new taxes” levied to pay for Gilbert’s upgrades. But while that makes for a nice talking point, the county’s general operating fund will still be losing out on an estimated $41.8 million to $54.6 million through 2044, according to Maggie Keenon, the director of the Cuyahoga County Office of Budget and Management.

Why does this have to happen right now before the state passes its budget in June? Cavs CEO Len Komoroski was happy to speak with Cleveland.com prior to Tuesday’s vote and explain that rates might rise and there’s the whole NBA All-Star Game thing that they might host, assuming the NBA says yes, though Komoroski seems to think it’s a done deal.

Well, that doesn’t seem to be much of an answer. Perhaps some council members can clear things up. Some of them are worried that the Cavs might pack up and leave. (They will not)

Councilwoman Sunny Simon:

“There is a threat the Cavs might leave and it is my job to have some stability,” she said. “We own this building and we need to make sure our asset is maximized.”

Councilman Scott Tuna:

He recalled when the Cleveland Browns left Cleveland for Baltimore.

“It is imperative we move forward,” he said. “The seven-year lease is a key component of the reasons I am supporting it. They are great partners.”

Others yammered about jobs and “maximizing” a prized asset like Quicken Loans Arena. Not high-paying jobs or permanent jobs but jobs nonetheless. Like Councilman Anthony Hairston:

“We need to maintain an economic driver that will not only keep my residents employed.”

And some had some trouble using words, like Councilwoman Shontel Brown:

“This deal is not either/or or now or never but how and when.”

Meanwhile, Greater Cleveland Congregations, a non-partisan coalition of religious groups and advocates, is asking that maybe Gilbert could do something in exchange for this public giveaway, like matching the total public dollars spent to create a Community Equity Fund. They’d also like Gilbert to personally pay $35 million of his own money. Considering he has a net worth of $5.8 billion according to Forbes, Gilbert could probably dig that out from in between his very expensive sofa cushions.

Gilbert has refused to meet with the GCC and the Cavs have refused to comment on their request. The city of Cleveland still hasn’t held a vote to approve its portion of this boondoggle, so maybe there’s still some hope.