by Chuck Hoven
(Plain Press, March 2017) Greater Cleveland Congregations’ campaign to create a Community Equity Fund with a dollar to dollar match of any new public money pledged to upgrade Quicken Loans Arena (The Q), has brought increased public scrutiny to the proposal to expand the arena. The testimony, at the February 21st meeting at the Cuyahoga County Council, revealed the scope of the deal. Close examination of the details reveals the project is a bad deal for Cuyahoga County and Cleveland residents. It also would hurt the bottom line of the restaurants and bars that now benefit from the crowds attracted to events at The Quicken Loans Arena.
The proposed expansion would result in the Cavs agreeing to extend their lease from 2027 to 2034–adding a guaranteed seven more years to the Cavaliers’ stay in Cleveland. The total cost of the proposal is projected at $282 million with the Cavs paying $122 million of that in the form of increased rent. The rest of the funding would come from various pots of public dollars. Cuyahoga County would pledge its sales tax revenue as security for the bonds issued.
The plan, as described in testimony by Cavs CEO Len Komoroski before Cuyahoga County Council is designed to increase the square footage of The Q from 94,000 square feet to 150,000 square feet. The purpose is to allow the Cavs to host more pre-game and post-game events as well as being more competitive in attracting new events to The Q. Komoroski urged the County Council to act soon so the Cavs will have the project complete in time to host the NBA All Star weekend in 2020. Although the refurbished facility will have more square footage, it will have less seats for games and events. Seating capacity will be reduced from 20,562 to 19,700.
Cuyahoga County Council member Jack Schron expressed concern that the County was being rushed to a decision to commit $16 million from its general fund to the project. He noted the County Council will not learn until the end of June what impact the State of Ohio’s two-year budget will have on the budgets of Cuyahoga County and the Regional Transit Authority. Schron also wondered if Cuyahoga County should be providing funds to allow The Q to be more competitive — taking events and gatherings away from the Cuyahoga County funded hotel, convention center and Global Center for Health Innovation.
Gail Long said while she supported the demands of Greater Cleveland Congregations to create a Community Equity Fund, she does not support the use of public funds to support The Q. Long, who spent many years as Director of Merrick House, fighting to keep MetroHealth as a viable public hospital, spoke of the uncertainty of the future of Medicaid. She expressed concern about what Ohio and MetroHealth would do if Congress ends the Medicaid expansion that resulted from the Affordable Care Act. Long believes that MetroHealth’s recent healthy revenue stream resulting from Medicaid expansion could disappear and the hospital may need help from Cuyahoga County to rebuild its facility. She also noted the aging Justice Center also in need of renovation or replacement.
Long’s testimony brings to question the impact borrowing dollars for The Q will have on the long-term debt of Cuyahoga County and its ability to finance construction and rehabilitation of its own facilities such as the Justice Center and MetroHealth Medical Center. Even if Dan Gilbert agreed to pay 100% of the cost of his new larger space in increased rent, how would pledging County sales tax as security on the bonds impact Cuyahoga County’s ability to borrow? How would it change the interest rate it would have to pay? What would this mean to the County’s ability to go forward with other construction projects?
Cuyahoga County Council members also wondered what would happen to The Q after 2034. It was clear from testimony given to County Council that The Q would be 40 years old at that time and the Cavaliers owners would consider it as having reached the limits of its ability to compete with newer facilities in other cities. The team owners would most likely be asking for a new $600 million to $1 billion facility here or in some other city that would come up with a better deal.
Greater Cleveland Congregations (GCC), by asking for a dollar to dollar match of any public money given to the Cavaliers for the renovation of the Quicken Loans Arena, hopes to focus Cuyahoga County Council’s attention on the glaring needs of Cleveland’s neighborhoods. Greater Cleveland Congregations’ efforts have forced the County Council to slow the mad rush to approve the proposal created by the Cavalier’s owner Dan Gilbert and his staff along with the County’s own legal and financial counselors.
The GCC would like to see billionaire Cavs owner Gilbert take the lead in helping to create the fund by making a large donation to the Community Equity Fund. Pastor Richard Gibson of Elizabeth Baptist Church outlined some goals for the fund including building two mental health facilities—one on the East Side and one on the West Side; dollars for job creation and capital projects in the neighborhoods. Will Burge of 1100 AM radio urged the County Council to take the initiative to set up a meeting with Cavalier’s owner Dan Gilbert, saying “I know Dan Gilbert will want to help. It is not Dan’s job. It is your job to get Dan to the table. Do your job, don’t drop the ball.”