The Cleveland Browns are already in the process of moving to a new $2.4 billion stadium in suburban Brook Park with the aid of $600 million in state money and $245 million in city money — they’ve even held a groundbreaking — but that doesn’t mean team owner Jimmy Haslam is done asking for stuff. In the latest, he got the Brook Park council last night to give preliminary approval to creating a stadium authority that would own the stadium and lease it back to him.
Lease-back deals like this are typically associated with property tax breaks: Since the building is owned by a government entity, it’s not subject to property taxes. I can’t immediately tell if Ohio would apply possessory interest taxes to the value of the lease itself — I’m sure Geoff Propheter will chime in soon to school me on this — but even if it does, this is a potential tax break that could increase Brook Park’s costs in exchange for no clear concessions at all from Haslam.
Mike Florio of NBC Sports also cites a savings (“apparently”) of $100 million in construction sales taxes, which was actually already approved last month as part of a development agreement between Brook Park and the team. (How Brook Park can exempt the project from sales taxes when it doesn’t have a city sales tax is an interesting research question.) Approved, but not released, as WOIO notes, so we don’t actually know what’s in the development agreement or whether Haslam would agree to pay rent or share revenues as part of the stadium authority ownership scheme.
The Brook Park council still needs to hold two more votes (the first is today) before the stadium authority becomes official, so maybe we’ll get more information before this whole thing is signed off on. Either way, demanding additional tax subsidies before a stadium has even been built is a pretty extreme example of the Grift That Keeps on Giving.
Is the tax break only for the stadium or the surrounding development? I can’t imagine the property is generating much in the way of property taxes now given that its empty land. So if its only the footprint of the stadium and not the rest of the property that’s still a net win for the city.
Now Brook Park has a bunch of hotels due to its proximity to the airport and when I used to travel to Cleveland for games that’s where I usually stayed. Yes I understand its anedotal but when I was there the hotels were full of people who came in for the game. Its not too much of a leap to assume that they would have higher occupancy and be able to charge higher prices once the Browns are actually playing there as opposed to downtown. So the city would get more hotel taxes. That’s if we assume that there is zero other development in Brook Park outside of that the Browns build. At the very least you would think that the row of seedy strip clubs would go away and be replaced
It’s unbelievable that these “red states” throw billions of dollars at billionaire owners for a play pen.
We live in a world that has no Batman but is full of Batman villains like Haslam.