SBD/January 29, 2013/Facilities

Cleveland Taxpayers Remain On The Hook For Underperforming MLB, NBA Venues

Quicken Loans Arena, Progressive Field have failed to generate expected revenue
Cuyahoga County, Ohio, taxpayers “still are paying millions of dollars a year” for Progressive Field and Quicken Loans Arena “because of cost overruns and team leases that have failed to generate as much money as originally promised,” according to Laura Johnston of the Cleveland PLAIN DEALER. The bill to the county this year amounts to $6.25M, and with $70M “still owed, taxpayers will remain on the hook until 2023 -- nearly 30 years after the opening of the downtown sports venues.” Former Gateway Economic Corp. Exec Dir Tom Chema, whose nonprofit oversaw the construction of the venues and serves as landlord, last week said that “those involved in the planning of the complex had envisioned taxpayers picking up a ‘modest amount,’ about $1 million a year.” A sin tax approved in ’90 for a 15-year tax on cigarettes, beer and wine to cover half the cost raised about $200M through '05, "when collections were diverted with voter approval to pay off the cost of Cleveland Browns Stadium.” Johnston notes the “generous team leases left Gateway to cover small repairs, even light bulbs, and rent never added up the way officials had projected.” Cavaliers ticket sales at times “have slumped, cutting into the admission taxes used to pay off county bonds.” County taxpayers “may be called on to rescue Gateway again in future years, if the Cavs and Indians demand upgrades to their aging facilities.” The county could “tap as much as $15 million left over from the sin tax when it expires in 2015” (Cleveland PLAIN DEALER, 1/29).
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