Category: Cleveland Cavaliers

Inside why Cleveland keeps having to throw good stadium money after bad

access_time personNeil deMause

One day after the Cleveland city council approved an additional $20 million in Cavaliers arena spending and Guardians stadium spending because the team’s leases say the public has to pay for it and the public repair fund had run dry, the Cuyahoga County council followed suit last night, approving $17.35 million in county money to buy the Cavs new elevators and a broadcast control room and buy the Guardians new HVAC units and repairs to a “subroof,” whatever that is:

Cuyahoga County will borrow $14.5 million to help Gateway Economic Development Corp. pay the repair bills at Rocket Mortgage FieldHouse and Progressive Field.

On top of that, the county is giving $2.85 million in General Fund dollars to Gateway, the nonprofit that owns the ballpark and arena and oversees repairs.

Those with advanced degrees in how money works will recognize that “borrowing $14.5 million” is not actually a way of explaining how one plans to pay for something, but it fills Gateway’s budget hole for the moment. Future generations of county officials will get to figure out how to pay it off, though one got a head start by explaining that really, at least paying for constant upgrades is better than build a whole new stadium, amirite?

County Council Member Dale Miller, in a committee hearing on the proposal in November, argued that spending on repairs was preferable to building new stadiums.

“The key to our continuing to be a big-league sports town is that we maintain facilities in good condition, so that we don’t have to replace facilities every 25 years or so,” he said. “I know they’re doing that in some other cities, but we don’t have that kind of resources here.”

(Ed. note: Cuyahoga County is currently considering whether to replace a Browns stadium that is exactly 25 years old.)

Yesterday I wondered aloud why Cleveland and Cuyahoga County are paying for constant upgrades, and today I have a partial answer to that: Former Gateway chair Ken Silliman kindly provided copies of the Guardians and Cavs leases, and it turns out they each have slightly different definitions of what the public is on the hook for:

This, needless to say, raises a lot of questions, some of which Silliman was able to shed some light on:

How come Gateway pays for all routine maintenance, capital repairs, and major capital repairs for the Guardians, but only major capital repairs for the Cavs? Both teams, Silliman explains, were on the hook for maintenance and minor repairs as of 2021. That was when the city and county approved spending $17 million a year on stadium upgrades in exchange for Guardians owners Larry and Paul Dolan extending their team’s lease through 2036; as Silliman puts it, “the Guardians were successful in assigning ALL ballpark capital repairs to Gateway as a byproduct of the lease extension.” So a blank check got considerably blanker, in exchange for the Guardians owners agreeing to stay put for an extra 13 years.

Why does anything over $500,000 count as a major capital repair? Doesn’t this 1) incentivize the Cavs to bundle repair items into bigger projects, in hopes of making them the public’s responsibility, and 2) mean that as inflation kicks in over time, more and more repair items would be expected to fall under “major capital repairs”? The $500,000 threshold dates back to the teams’ 2004 leases, and Silliman says he doesn’t know how that distinction between major and minor repairs was decided on. He says the team cheating by piling up small repair projects hasn’t been an issue — Gateway’s engineering consultant has to approve expenses — but inflation absolutely is.

Silliman also forwarded a memo he wrote last fall to the Gateway board in which he said:

This “elephant in the room” is the unprecedented post-pandemic two year spike in construction cost inflation which unfortunately coincided with Gateway’s obligations to fund two of its costliest capital repairs (Cavaliers’ vertical transportation/video production room and Guardians’ lower and upper bowl seat replacements). This perfect storm of events is a major contributor to Gateway’s present cash needs.

That’s potentially good news in that the post-pandemic inflation spike is now over. However, construction costs continue to rise, and sin tax revenues continue to fall, and that $500,000 threshold for which Cavs expenses the public is on the hook for is going to be a lower and lower hurdle, so, it’s not all that good news.

Finally, the leases say the teams can sue Gateway for damages if they don’t get their repair money on time. However, if Gateway runs out of money — which it would if the city and county stopped giving it more cash — it doesn’t appear that the Guardians and Cavs owners can sue the city and county, so it’s within the governments’ power to shut off the money spigot and dare the teams to break their leases and try to find better ones elsewhere, if they wanted.

Tl;dr: Cleveland and Cuyahoga taxpayers aren’t on the hook for all upgrades to the Cavs arena and Guardians stadium, but they are responsible for paying for an unlimited amount of a limited number of items. (Think of it like different infinities.) The city officials who first set this up back in 2004 are mostly no longer around, though the ones in 2021 who took on “ALL ballpark capital repairs” for the Guardians should be getting questioned about that, early and often.

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Cleveland okays taking money from minority business program to give to Cavs, Guardians

access_time personNeil deMause

The Cleveland city council voted 13-3 last night to provide $20 million in extra funding to the Gateway Economic Development Corporation for upgrades to the Guardians stadium and Cavaliers arena. Council president Blaine Griffin said that the cash will come from projects “in which we have already borrowed and do not need the money this year” — and if your ears perked up at that “this year,” you’re not alone. The money, which will be used for such things as upgrading elevators and broadcast equipment, replacing seats, and upgrading HVAC and video systems, will come from three sources:

  • $5 million in federal American Rescue Plan Act funding that was slated for a minority business program but not allocated yet.
  • $10 million from other bond proceeds that was intended for other projects that the council didn’t specify.
  • $5 million from Cleveland’s general fund, which one would think the city could have found something to spend it on.

The new spending is needed because the city of Cleveland and Cuyahoga County agreed in 2017 to give Cavs owner Dan Gilbert $70 million for arena upgrades and in 2021 to give Guardians owners Larry and Paul Dolan $285 million for stadium upgrades, both in exchange for lease extensions. While the money is coming from a ton of different sources, one slice is from the extension of cigarette and alcohol taxes (aka “sin taxes”) that were used to build the venues in the first place, and sin tax revenues are falling while construction costs are rising, resulting in a budget gap for Gateway that the city and county are left to fill.

Going by news coverage, it’s been unclear for some time now what exactly the team leases require the public to pay for — I’m digging around for the exact language and will report back here once I’ve located it. Crain’s Cleveland Business previously reported that if Gateway runs out of money and stops paying for required upgrades, however those are defined, “the teams could stop paying the $2 million in annual rent to Gateway or sue the city for breach of contract,” according to Gateway’s lawyer. (Again, it would help to see the actual lease language.) Griffin called the added $20 million in city spending approved last night “responsible” in order to avoid “having to pony up for expensive litigation” and ending up “with a stadium and trying to figure out an end user,” implying that the teams could leave if Gateway defaulted — though given the current Oakland A’s and Tampa Bay Rays situations, “leave for where?” is a worthy question.

The Cuyahoga County Council is set to vote today on more than $17 million of new spending of its own on Guardians and Cavs capital expenses. And this isn’t likely to be the end of it: There’s another ask for another $30 million in potential Gateway spending around the corner, and unless construction costs come down (ha!) or Clevelanders start smoking more, likely more budget gaps to fill beyond that.

City councilmember Jenny Spencer, one of the three “no” votes last night, put it this way at the council’s previous meeting last week:

“From the residents’ perspective, it always seems that when it comes to stadium funding, money just comes like a magic rabbit out of a hat. It just appears magically. Magically, we have $20 million in general funds available. But when it comes to other things the residents need, we don’t have the money.”

To which Griffin replied:

“Somehow, several years ago, this city made a commitment that they wanted teams as part of the economic engine in the central business district. There are some legal obligations that this city has with this lease.”

That “somehow” is doing a lot of work, huh? Griffin has been on the council since 2017, so presumably he knows at least a little something about how this sausage got made; instead, he’s staying focused on how Cleveland taxpayers will have to choke it down.

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Friday roundup: More Rays scuttlebutt, Sixers arena advances, nobody’s buying pricey Bills PSLs

access_time personNeil deMause

It’s been three whole days since we checked in on the Tampa Bay Rays stadium situation! Do you feel bereft? Do Rays execs and Tampa Bay–area elected officials feel bereft? If a press statement falls in a forest and there’s no one around to aggregate it, does it make a sound?

None of this, and more, will be answered in this week’s news roundup:

  • The Tampa Bay Times sports desk has certainly been chiming in on the Rays situation, with columnist John Romano, who first reported on Rays owner Stu Sternberg’s threats to move the team if he didn’t get stadium bonds approved ASAP, declaring that what is needed is “a hero” or “a savior” or “a fairy-tale knight” to “step up and purchase a large hunk of the franchise and pay for a stadium, or at least provide a stadium financing plan that does not involve more than a half-billion in public dollars.” Why a half-billion? Who knows! Where does Romano think Sternberg will go if no buyer steps in? Dunno, though he predicts the team will “be on the move, at least temporarily, when 2026 rolls around and Tropicana is still not fixed and the Rays do not want to be stuck in an 11,000-seat spring training stadium.” (The number of cities that could have significantly larger stadiums ready to go by 2026 is zero, or maybe one if neither the Athletics nor San Francisco Giants have territorial rights to Oakland.) The most logical short-term solution is for Sternberg and local electeds to get together and agree to pay the $55 million it would cost to repair Tropicana Field for the short term, with Sternberg agreeing to extend his lease a few years in exchange; it would take a lot of pride-swallowing, especially on Sternberg’s part, so it probably won’t happen, but the alternative looks like it’ll be a whole lot of baseball seasons in minor-league parks somewhere.
  • The group that wants to bring an MLB team to Orlando — formerly led by former Magic executive Pat Williams before his death this summer — also chimed in, saying that while they would never interfere in the business of St. Petersburg, if the Rays did want to move to Orlando, they’re confident that Orange County political leaders “can provide an attractive public/private partnership stadium financing structure that benefits all stakeholders involved.” The last time they brought this up, the “public” part involved $975 million in hotel tax money, one of the same revenue sources that St. Petersburg had been looking to use on its new Rays stadium. (Though it’s often said that Florida counties can spend this on tourism promotion and building things like stadiums and convention centers, it can also use some of it for zoos and beaches and river cleanup and even transportation and sewer infrastructure, something lots of Floridians would like to see counties do.) The Orange County Commission has passed on this idea in the past; we’ll see if it goes over any better with the Rays as a potential target.
  • The Philadelphia city council voted 10-3 to approve creating a tax-kickback district for a new 76ers arena and a new “arena district” to manage neighborhood impacts, which are expected to be extensive. More arena votes are scheduled for the next council meeting on Tuesday.
  • Cleveland and Cuyahoga County are each being asked for $20 million for Guardians and Cavaliers stadium and arena repairs, with another $30 million ask on the table right behind that. If there’s a small silver lining, it’s that this is money the city and county already agreed to spend, it’s just that the cigarette and alcohol taxes that were supposed to fund it are coming up short, so now taxpayers will have to dig into another public pocket.
  • How are those super-pricey Buffalo Bills PSLs selling? Extremely poorly: Only 10% have sold so far, and the rate of purchases is slowing. If they don’t sell out, the Bills owners are on the hook for coming up with the money elsewhere, at least, so at least it won’t be an additional public disaster like the 1990s Oakland Raiders PSLs were.
  • The Chicago Bears owners and Arlington Heights have finally agreed on a property tax valuation for the land the team wants to build a stadium on in that Chicago suburb, but also they say they still really want to build a stadium in Chicago, raising the question, as the Chicago Sun-Times puts it, of “whether the Bears’ latest announcement is [just] a push for leverage in stadium negotiations that have now stretched over three years.”
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Friday roundup: Everyone’s building soccer stadiums, no one’s sure how to pay for them

access_time personNeil deMause

This was a rough week for anyone in the U.S. who is an immigrant or looks like they might be, is trans, might ever need an abortion, is Palestinian, is a federal government employee, is a local government employee, is an employee of anything that depends on international trade, lives near sea level or in places that get hot or are at risk of hurricanes, likes democracy, or cares about a relative, friend, or neighbor who does. Not that it would have been an amazing week for most of those people if the presidential election results had gone another way, but a whole lot of folks are somewhere on the spectrum from anxious to terrified right now, so if you need to check in with each other right now before getting back to life as we know it, that’s not only reasonable, it’s a fine tradition.

And now, whenever you’re ready, back to sports stadium and arena life as we know it:

  • The owners of Sacramento Republic F.C., who now include the Wilton Rancheria Native American tribe by are still led by minority owner Kevin Nagle, announced plans for a new stadium, and almost none of the news coverage bothered to provide details of how it would be paid for, even those that reported on how it was announced to the tune of “Don’t Stop Believin’.” Finally, way at the bottom of a KCRA-TV report, we learn that the city of Sacramento is expected to put up $92 million in infrastructure money from property taxes on 220 acres surrounding the stadium, plus provide free police, fire, EMS, traffic, and other services for the next ten years. The city council is set to vote on the plan Tuesday, so that leaves three whole days to gather feedback, two of which are weekend days and the third is a holiday when city offices are closed, this is fine.
  • Bridgeport is considering a minor-league soccer stadium that would cost at least $75 million and which would likely include public funds, and Baltimore is considering a minor-league soccer stadium with no known price tag or details on how to pay for it, and Fort Wayne is considering a minor-league soccer stadium that is promised will be “100% privately financed” but we’ve heard that before.
  • Cleveland and Cuyahogo County are continuing to look for ways to fill their budget gap for paying for future upgrades for the Guardians and Cavaliers, and county executive Chris Ronayne says options are “not yet concrete” because “it’s a conversation that’s probably also going to have to include the public.” Signal Cleveland speculates that this could include going back to voters to approve another tax increase, unless Clevelanders go back to drinking and smoking at their old rates, which might not be as likely as you would think.
  • Nearly 95% of campaign donations by U.S. sports team owners went to Republican candidates or causes, according to a Guardian review of donor filings, which, duh, Charles Barkley could have told you that.
  • How are Inglewood business owners around the Los Angeles Rams‘ new stadium and Los Angeles Clippers‘ new arena loving all the new foot traffic? Not so much! “One of my lowest sales days was on Super Bowl Sunday” because of street closures, said a local bakery owner at a press conference this week. “I literally made under $600 for the day. I had to send employees home, and you’re just looking around like, ‘What in the world?'” Checks out!
  • Did a major news site just run an item reporting wild economic impact projections for a proposed Buffalo soccer stadium without saying who conducted the study, while the byline partly credits a City Hall press release? Sure did! Please give to support your independent nonprofit or collectively owned news media, we might just be needing them the next year or four.
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Guardians, Cavs owners ask for $40m in added public cash for upgrades, because Clevelanders aren’t smoking enough

access_time personNeil deMause

When Cuyahoga County voters in 2014 approved extending a cigarette and alcohol surcharge for 20 years to provide $13 million a year to the Cleveland Guardians, Cavaliers, and Browns for stadium and arena repairs and upgrades, they were told it was necessary to keep the teams from breaking their leases and moving elsewhere. (They were also told it would “Keep Cleveland Strong,” via stickers that Guardians stadium ushers had to wear on their uniforms under penalty of firing.)

Unfortunately, Cleveland area residents aren’t sinning like they were projected to, and earlier this year it was reported that Cavs owner Dan Gilbert had been fronting money to pay for such “repairs” as upgraded elevators and escalators and a film on the arena’s new glass wall to keep birds from flying into it, while waiting for tax proceeds to come in. And now the Guardians and Cavs owners and the Gateway Economic Development Corp., the quasi-public agency that owns the sports venues, have asked the city of Cleveland and Cuyahoga County for an extra $40 million to fill in for the missing tax money:

Cleveland’s share of the money would come from the general fund, which covers basic services. The city can afford to pay the $20 million thanks to numerous unfilled vacancies, Finance Director Jim Hartley said.

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Friday roundup: “Unbelievable” Utah Olympics projections, Cavs crony capitalism, and stadium vapordistricts

access_time personNeil deMause

It’s Friday, I’ve been testing negative for two days, time to see what we all missed this week while we were busy making other plans:

  • “Second Winter Olympics could spark $6.6B in economic output for Utah, new report finds” reported a headline at KSL-TV, and “could” and “output” are doing an awful lot of work there. (Number of actual economists consulted for the KSL story: zero.) “These numbers are just so unbelievable,” said Salt Lake City Olympic committee COO Brett Hopkins, and yep, can’t argue with that!
  • The guy who negotiated massive tax kickbacks for Cleveland Cavaliers owner Dan Gilbert for the city is getting hired by Gilbert as the team’s CFO, this is fine.
  • The owners of Racing Louisville and Louisville City FC promised to build a new development around their new soccer stadium after it opened in 2019 with the help of city funding, but haven’t actually done so. “There’s good soccer going on, and I was for soccer,” city councilmember Robin Engel said at a hearing last month. “You know, we throw these TIFs around anymore these days like it’s chump change.”
  • Boston Magazine has a good oral history of how the 1999 All-Star Game hosted at Fenway Park helped save the ballpark from a planned demolition and replacement by a fake replica, though it kind of elides the main point, which is “Save Fenway Park activists put up a huge stink and then the new guy who bought the Red Sox decided he liked Fenway anyway. Also Save Fenway isn’t “defunct” as the article says, but the group’s Erika Tarlin does get a decent amount of screen time.
  • Whoever ends up the new mayor of Arlington Heights this fall, it’ll likely be someone who supports building a Chicago Bears stadium there, keep that in mind the next time you ask why people don’t just vote elected officials out of office when they back stadium deals.
  • If you always wanted a restroom sign from Pawtucket’s soon-to-be-demolished McCoy Stadium, now’s your chance.
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Friday roundup: Rays promise “intimate” stadium with ginormous upper deck, Cleveland running out of tax money to pay for Cavs and Guardians upgrades

access_time personNeil deMause

Happy end of the week! Surely some other news of note happened in recent days, but you chose to come to this website, so you’re looking for different news, maybe some bleak Utah minor-league baseball renderings? And that is but the beginning of the smorgasbord of stadium and arena items on tap! (Yes, you can have a smorgasbord on tap, I’m a professional wordsmith, you’ll just have to trust me on this one.)

  • Reporting live from Tampa Bay Rays owner Stu Sternberg’s colon, the Tampa Bay Times’ Marc Topkin has a love letter to the Rays’ new stadium design, gushing about how much more “intimate” it will be thanks to only having 30,000 seats and “70% of the seats in the lower two of three seating levels.” Getting rid of the worst seats doesn’t actually make the view from the remaining seats any better — getting rid of intervening luxury seating might accomplish that, but there’s no indication Sternberg plans to do that — and having 30% of the seats in a third deck actually sounds like a lot for a 30,000-seat stadium (the Pittsburgh Pirates‘ stadium holds 38,000 and doesn’t have a third deck at all), but team officials blurted all this stuff out and Topkin wrote it down and printed it verbatim, that’s the job of a journalist, right? (UPDATE: FoS reader Andrew Ross points out that the Times actually squeezed this story onto its front page alongside the other notable news of the day.)
  • Cleveland’s stadium agency is on the hook for nearly all upkeep of the Guardians stadium and Cavaliers arena, and the alcohol and cigarette taxes that are supposed to pay for them are running dry, so someone is going to need to find more money to spend on the teams. (Right now Cavs owner Dan Gilbert is fronting his team’s arena costs, and the city and county will have to pay him back.) Some of the work includes upgraded elevators and escalators for the Cavs, kitchen equipment upgrades and new in-stadium TV screens for the Guardians, and a special film on the new glass wall at the Cavs arena to keep birds from flying into it which will have to be replaced every five years, not all of which really seem like “capital repairs” to me, but from the sound of things whoever negotiated these leases on behalf of Cleveland and Cuyahoga County did an absolutely horrible job that is allowing the team owners to bill the public for any and all upgrades, can lawyers be found guilty of malpractice? Make a note to check into that.
  • Speaking of malpractice, the Baltimore Banner managed to write about the Ravens‘ new stadium upgrades with only the briefest of mentions that state taxpayers are picking up the entire $430 million tab, and not mentioning at all that Ravens owner Steve Bisciotti can avail himself of another $170 million or much more after that. The headline the Banner chose to roll with: “M&T Bank Stadium’s premium areas will soon reach new level of luxury.” Turns out corporate-run nonprofit journalism isn’t necessarily any better than corporate-run for-profit journalism, maybe we need a better model?
  • I’ve been sadly neglecting the throwdown in Indianapolis between Indy Eleven owner Ersal Ozdemir, who was planning to build a new stadium for his USL-but-wants-to-be-MLS team with $112 million in state money, and Mayor Joe Hogsett, who now wants to use the money for a different soccer stadium on a different site for a different wannabe MLS ownership group. The City-County Council is set to vote on authorizing legislation for a new “professional sports development area” (read: super-TIF district) on June 3; if it’s approved, it would then go to the state legislature for a final vote.
  • New York Mets owner Steve Cohen’s plan to build a casino in his stadium parking lot, despite it being public parkland, is likely dead after state senator Jessica Ramos said she won’t support any casino project in her district when 75% of residents say they don’t want one. The state legislature could still pass casino authorizing legislation over the local representative’s objections, but that rarely happens, and anyway the state casino location board is unlikely to hand out a casino license to a project on such shaky ground, so probably New Yorkers will get to gamble somewhere other than the Mets parking lots, which Cohen is vowing will remain parking lots until the sun burns out, because it’s the prerogative of a sports team owner to throw a hissy fit.
  • A stairway flooded during heavy rains at the St. Louis Cardinals stadium, time to build them a new one, that’s how it works, I don’t make the rules!
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Friday roundup: Terrible economic impact studies, terrible renderings, but one smart mayor, at least

access_time personNeil deMause

It’s been a long year of waiting, but the moment we’ve been looking ahead to is finally within sight, and only one thing seems to be on everyone’s minds: What songs are we going to request that Yo La Tengo perform for pledges tomorrow afternoon on the WFMU fundraising marathon? I already requested “Better Things” the year after Hurricane Sandy, but I’m hoping I can find something equally appropriate for 2021.

Here’s some stadium and arena news to tide you over while you wait:

  • Economic impact studies of sports venues are usually pretty terrible, given that they generally start out by measuring “impact” (i.e., all money spent in or around a stadium or arena whether it benefits anyone but the team owner) and ignore spending that’s just shifted from one part of town to another, and so on. But the projection that a new $228 million arena in Augusta will generate more than $600 million in economic impact by adding up “$436 million in new spending” plus “$208 million in new sales taxes” breaks new ground in bonkers: Doesn’t the Augusta Downtown Development Authority know that sales taxes are already part of “spending”? Plus, is the sales tax rate in Augusta really 48%? The full “market analysis” is here, but it doesn’t provide details on its methodology and the $208 million sales-tax figure doesn’t seem to appear anywhere in it, so we’ll just have to trust that the Augusta Chronicle’s fact-checking department was on the job and, oh dear. Maybe the “applause editor” does some fact-checking in her spare time?
  • Also in economic-impact-study news, various studies have projected anywhere from $200 million to $600 million in impact from a new arena in Palm Desert, but Mayor Kathleen Kelly says, “Sports arenas are pretty notorious for over-promising and under-delivering positive economic impacts for the surrounding community. So, I do have to look at the proposal with some skepticism.” She adds an arena could draw off spending from area restaurants to arena concessions, and take up hotel rooms that otherwise could be occupied by longer-term visitors — hey, somebody’s been reading this site, or maybe just the mountains of data showing that arenas haven’t had a large measurable impact in the past! Warms my heart, it does.
  • The Florida House Ways & Means Committee voted 16-1 yesterday to repeal the state’s program that allows sports team owners to request up to $2 million a year apiece in sales-tax money to repay their private stadium and arena construction or renovation costs, and, yes, this was just proposed a couple of years ago, but maybe one of these days it’ll actually pass. Especially given that it’s a program that has allowed team owners to demand public money for venues they’ve already built, making the economic impact of the subsidies an easy-to-calculate zero.
  • Detroit’s Joe Louis Arena is gone, but you can still park in its parking garage, which is about to become “much more than just a place to park in the morning” as it is converted to a “mobility hub” that is … a place to park in the morning and buy coffee.  It’s all privately funded, at least, so far.
  • If you want to read an article about sad Sacramento soccer boosters appealing for a billionaire to come and bring $500 million for an expansion fee and a new stadium after the old billionaire backed out, here you go! Features Sacramento mayor and former Kings water-carrier Darrell Steinberg saying of the plan that ended up leaving the city cutting services to pay down arena debt, “We didn’t give up on the Kings and we’re not giving up on Major League Soccer.” Adds Steinberg: “What we need is a plug-and-a-play from an investor to then help us finish the last piece of this.” In related news, I only need $6 billion as the last piece of the puzzle for building my space elevator, please apply within.
  • Not to be topped, News 4 Nashville has a “first look inside Nashville’s new soccer stadium,” which is actually someone clicking around on computer renderings of the place, complete with a visible cursor. We had that already back in November, and with creepy shambling Sims!
  • And if you want to read an article about Cleveland Cavaliers owner and Quicken Loans magnate Dan Gilbert and his gajillions of dollars in public subsidies that starts out describing how he “was raised by a pair of Century 21 real estate agents” and “went to Michigan State University—where he was arrested for running a sports gambling operation,” Defector has gotcha.
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Friday roundup: Raleigh MLS project funding, Islanders’ train station costs, Flames arena talks are all ???

access_time personNeil deMause

Happy Friday! If you’ve been wondering if Scott McCaughey’s excellent new album of songs written while in a hospital room recovering from a stroke can drown out the sound of poorly timed jackhammering by the gas company right outside your window, I’m here to report: Not nearly well enough!

Typing really loud so you can hear me over the din:

  • Raleigh residents are concerned that a development project centered on a new soccer stadium could price them out of living in the city. Also, there isn’t actually enough Wake County tax money available to pay for the project’s proposed $390 million public cost. And Raleigh doesn’t have an MLS team, or the promise of one. Other than that, this is going swimmingly.
  • Newsday has contradicted Long Island Business News’s report that New York state will pay “most” of the cost of a new $300 million train station for an Islanders arena at Belmont Park, saying that the actual cost is only $100 million and developers will pay most of it. Unnamed source fight!
  • Calgary city councillor Jeff Davison, who is spearheading behind-closed-doors talks with the Flames owners over a new arena, says, “We do not have a deal today, and when we will have one and if we will have one is totally up in the air. But what we can tell the public today is that discussions are productive but they’re not complete. We can’t give an exact date as to when we’ll be back with any information [but] I’m confident if we do bring a plan back, that the public will support it.” Pretty sure that translates as “Still talking, ask again later.”
  • Noah Pransky has been on a writing tear about the Tampa Bay Rays mess this week, including a review of an article he wrote in July 2009 predicting much of what has since come to pass and an analysis of how hotel-tax money that Tampa officials say can’t be spent for things like policing or libraries really can, because they could be used to free up general-fund money that’s currently spent on tourism-related expenses. “Where’s the study on best uses for that new money?” writes Pransky at Florida Politics. “How about just a best-use conversation, held out in the sunshine?” Crazy talk!
  • Speaking of tax money that could be spent on other things, Cuyahoga County is considering a 1% hotel tax hike to free up $4.6 million a year to spend on its convention center and sports venues, which in present value comes to about $70 million. (The Cleveland Plain Dealer article on this is entirely about how the bed tax hike would affect the hotel industry, because of course it is.)
  • “Could an NFL Stadium [for the Buffalo Bills] be Built on an Abandoned Coke Plant Property?” asks Erie News Now, boldly toying with Betteridge’s Law.
  • Worcester will break ground next Thursday on its new heavily subsidized Triple-A Red Sox stadium set to open at the beginning of the 2021 season, which, uh, isn’t a lot of time. They’d better hope that the climate crisis means a less stormy winter construction season in New England, which, uh, isn’t likely.
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Cuyahoga County to spend extra $40m on arena repairs after Cavaliers blew through first $22m in record time

access_time personNeil deMause

It’s Wednesday, so it must be time for Cuyahoga County to spend more money on the Cavaliers‘ arena:

Cuyahoga County Council is considering whether to issue $40 million in bonds to reimburse the Cleveland Cavaliers for repairs the county is required to cover under the team’s lease agreement on Rocket Mortgage FieldHouse.

Also under consideration is a measure that would re-finance $40 million of the $60 million in bonds sold by the county in 2015 as an advance on revenues from the county’s so-called sin tax, which was extended 20 years by a 2014 vote.

That’s a lot of words, but careful readers will zero in on the two numbers: $40 million and $40 million, which added together come to $80 million. It’s not really $80 million in new spending — one set of bonds would be new, the other merely refinanced — but it is a significant chunk of change for an arena that has already gotten a whole lot of chunks in recent years.

The reason for the new spending proposals, as explained in a not very clear article at Cleveland.com, is that the county agreed to cover “major capital repairs” in the team’s lease, and Cavs owner Dan Gilbert (who is reportedly doing better after his recent stroke) has already blown through $22 million in county tax funds while also fronting $40 million of his own money, for such things as “the replacement of the heating and cooling system, retractable seating, sports lights, ADA-compliant restrooms, and other things.” Some of that sounds a bit dodgy as required maintenance — is that replacing worn-out retractable seating and sports lights, or upgrading them? and WTF are “sports lights,” anyway? — but if the lease says the county has to pay for them, there’s not much the county can do about that, hence the rush to pass another $40 million bond issue.

The main problem here is that the county appears to have either seriously overestimated how fast tax revenues would come in, or seriously underestimated how much capital expenses the arena would rack up so quickly. Given that the county previously said it would be using taxes on Cavs playoff tickets to help pay off its existing arena upgrade bonds, and the Cavs currently just finished year one of an umpteen-year rebuild following the departure of LeBron James, I’m putting my money on … you know, probably both.

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