If you read this site at all regularly, you know my disdain for anonymously sourced reporting, because all too often it only provides cover for powerful people, whether employed by sports teams or by government, to spread rumors without having to stand behind them or take questions about them. But sometimes gossip can still be true, and Ken Prendergast’s NEOtrans blog has done a pretty good job so far of being right about what its unnamed sources are saying about the Cleveland Browns stadium situation.
So it’s notable, if not exactly definitive, that Prendergast is reporting today that Browns owners Jimmy and Dee Haslam have decided on building a $3.6 billion stadium-and-other-development complex in suburban Brook Park, and that it will require $1.1 billion in public money:
Cost of the new domed stadium and the provision of about 20,000 parking spaces, almost entirely in surface lots, is estimated at $2.2 billion. Half of that will be privately funded and create new tax revenues that will fund the other half. Much of the funding for the stadium will come from bonds serviced by new stadium-related revenues and city, county and state taxes generated by stadium activities and employment. Another $1.4 billion in private, stadium-area development is planned.
There’s a lot of hand-waving going on there: A new stadium will create $1.1 billion worth of new tax revenues? Brook Park doesn’t have its own sales tax, so aside from a sliver of income tax revenue, the only taxes a new Browns home would be paying would be to the state and Cuyahoga County — and the Browns already play in those jurisdictions, so moving them from one part of the county to another would be a net zero.
Prendergast continues:
Look for the stadium building to receive tax abatement or to be owned by a tax-exempt entity, saving the Haslams tens of millions of dollars per year. That means only the land might generate property taxes. But by being improved and newly occupied, the land value will increase and generate millions more in property taxes or payments in lieu of taxes for Brook Park schools than it does now.
So the Haslams would get out of paying property taxes on the stadium and other buildings, making the public subsidy even higher than $1.1 billion. But the underlying land would generate property taxes, which would be a windfall for Brook Park schools, while those $1.1 billion in bonds would be paid off with … spare change that fell out of Browns fans pockets?
None of this makes any sense, and it’s worth noting that Prendergast has been a Brook Park stadium stan for a long while now — in his latest post he calls the proposal something that “makes sense for just about everyone concerned” — so it’s important to recognize that what he wants to be true may not be the same as what is true. Still, there are enough details here, and not necessarily flattering ones for the Haslams, that it seems likely that he’s describing some kind of actual funding framework that’s being discussed, even if all the numbers don’t necessarily add up. More news in coming weeks, presumably, as hopefully other news outlets start asking some of the many, many questions about this deal.
As long as Hopkins is a 2nd rate airport without a major airline hub (which will probably be forever), the chances of a successful tax generating entertainment district in Brook Park is zero. Whoopee, the Browns will play in Brook Park 10 days a year and then 355 days a year a gold plated white elephant will sit in an ocean of 20,000 empty surface parking spaces. Brook Park makes zero sense for a billion dollar development in a metro area that has been stagnant for decades.
Tell Haslam to go jump in the Cuyahoga River. Better yet, here’s an idea Haslam will really love, Ohio can put a 50 cent tax on diesel to pay for a new Browns stadium in Brook Park.
One advantage of Haslam’s Brook Park proposal, it’s better than Ziggy Wilf’s Arden Hill joke. Hopefully Cleveland and Ohio will be smarter than Minnesota was.
I still don’t understand what taxes it would generate. There are no local sales taxes, property taxes would go to the schools, ticket taxes wouldn’t produce anything like $1.1B … whole lot of questions here about the math.
The more I look at these sports “billionaires” the less it’s about math. Pegula got a new stadium in Buffalo, it’s so embarrassing to invite my billionaire buddies to a Browns game in such an ancient stadium. Then there’s the overgrown 10 year olds like Ryan Smith with his toy sports teams, expecting Salt Lake City taxpayers to fund a billion dollar playpen. These are the same people who have to have a $15,000,000 house in Park City so they can go skiing 2 weeks a year.
Ken Pendergrast is a regional expert on transportation. But when he claims that the Brook Park dome is a done deal, his lack of experience in how stadiums get funded is showing. The Brook Park scenario depends on $600 million from local governments and $600 million in State bonds secured by “stadium revenues.” As Neil observes, those stadium revenues are at best questionable. And you can forget any City money for this. This County has other pressing financial needs, and would be hard pressed to subsidize a dome whose limited non-football events would probably just cannibalize the downtown arena and the County’s convention center. In short, this deal is far from cooked.
I am not suggesting this is what will happen or ever could, but in this type of development if the stadium itself was city/county owned and exempt from property taxes, but the ancillary commercial development (which will hopefully be more than parking lots) WAS subject to taxation – including a special commercial zone with a modest surtax that goes to the county rather than to Haslam – do you still think that it wouldn’t be enough to pay for the stadium/infrastructure?
Hard to say without actual commercial property plans and tax rates, I know…
Don’t get me wrong, I’m not in favour of this sort of giveaway… but I can see the merit if there are legitimate tax dollars being generated (and more than just property tax dollars, which aren’t “profit” for the district in any sense).
And of course, Cleveland would be left with yet another mistake by the lake… that maybe they won’t be able to afford to demolish…
Ken Prendergast is a Haslam mouthpiece like most of the media in Northeast Ohio at the moment. A so called urban development anti republican guy who suddenly wants to hand out a billion dollar corporate welfare donation to a billionaire to build his theme park in the burbs. It’s amazing how quickly the mask slips when you stand to gain personally. This deal is yet another con for the tax payer.
How does Prendergast stand to gain personally?
By receiving inside information which will give him the most publicity he has ever had and the biggest traffic generator his website will ever get. His tweet announcing the article has over 300k hits dwarfing anything else he has ever posted. It doesn’t take a rocket scientist to work out.
The Brook Park residential property tax rate is 2.13%, so $1.4 billion in development would generate about $30 million a year in property taxes, which wouldn’t even be enough to pay off half of a $1.1 billion stadium.
Plus, property taxes aren’t free money: The property tax dollars for for ancillary development would be needed to pay for the services needed by the development. (Schools for new residents, etc.) This is exactly the same dodge that was used to argue that the Worcester stadium development would pay for itself.
Property taxes alone would not be ‘profit’ or money available for paying down debt.
However, if the $1.2-1.5bn in associated development was also covered by a TIF/CRZ/BRL/etc of 2-3% suddenly we are talking about $40-50m a year in money that could be directed to pay construction mortgage/bonds et al.
It won’t pay off the full stadium cost, but it could carry a significant amount of it (protecting the general fund). NPV works both ways, and if the stadium owning public entity pays for the facility over 30 or 35 years (as most do), it could at least minimize the loss to the taxpayer (for construction, anyway).
Likely a moot point as I would bet Haslam wants the entire development to property tax exempt for life/35 years.
TIFs/etc. aren’t a surcharge, though. They’re just a kickback of regular property tax revenues.
For whatever its worth, its pretty common in Cuyahoga to give 15 year tax abatements on new developments.
Brook Park’s population has fallen by 40% over the years. They won’t need to build new schools to accomocate the residents. The capacity is already there.
The site used to accomodate a giant Ford plant and is next to the airport and a convention center. So the infrastructure is largely in place.
They still need to hire more teachers to staff the schools. And provide additional fire and police and sanitation services, and so on.
How big of an increase in population after you expecting? Also don’t you think fire, police, and sanitation were necessary when there was a massive Ford Plant on the site? Considering the airport is literally a couple of thousand feet from there as is a convention center. So they probably already have a police and fire capable of handling the increase in population. Lastly if this results in spill over development that drives out the strip clubs that will probably helps the city overall
When it was a Ford site, it was paying property taxes, which were going to pay for those services.
Cities don’t typically turn a profit on property taxes vs the services they need to provide for the development that generates the taxes — if they did, then the bigger the city, the richer it would be, which isn’t the case. Judith Grant Long provided some numbers in her book, I’ll look for them when I have a minute.
People keep falling for the “We need a new stadium to compete” BS, make the owners pay at least 70% of the new stadium. Or better yet spend more $$$ into the joint you already have.
The plan makes perfect (dollars and) cents for the Haslams. It makes no sense for the public who will be picking up the tab for the billionaire’s new playpen that will be too old to use within 10 years.
Catalyze this, Haslam: Do the project yourself and leave the taxpayer out of it.
Another problem with a development in Brook Park is that it would be halfway between Crocker Park and downtown. With flat to declining population in Northeast Ohio, it would simply cannibalize existing entertainment dollars. Crocker Park is in a far more affluent area, so why would anyone from the western lakefront suburbs go to a Brook Park development? Because an empty football stadium is there? My family in Solon and Pepper Pike never go to the west side, except to catch a flight. Who hangs around an entertainment district next to the Cleveland Airport after a flight from Florida? Air service in Cleveland has declined and many cities can only be reached by regional jet while many more require a connection. Wasting billions of dollars on a stadium and entertainment district in Brook Park will do zippo for Cleveland’s economy.
Just a couple of things.
1) Will it only canabalize from other parts of Cuyahoga or will it pull people from Avon or Medina County?
2) Will it bring events that bring in people who don’t otherwise come to Cuyahoga County or NEO? Like if they get the Big Ten or MAC Title games from Indy. Will those events bring in people who wouldn’t otherwise come to the Cleveland area?
Vaportecture is now available! It’s on Xitter but this article embeds the pics.
https://www.cbssports.com/nfl/news/browns-unveil-renderings-of-new-2-4b-domed-stadium-make-pitch-to-build-future-home-in-brook-park/