When you’re the owner of a major sports franchise, there’s no better time to ask your host city, county or state for a truckload of public money than right after your team wins a championship.
Even if the folks you’re asking are flat broke, go ahead and ask anyway.
Dan Gilbert, founder and chairman of Quicken Loans and owner of the National Basketball Association’s Cleveland Cavaliers, got that opportunity this year after LeBron James and the Cavs came back from a 3-1 deficit in the NBA Finals to win the city’s first major sports championship since 1964. Though he was just six years removed from screaming at prodigal son James (in comic sans typeface, no less) for taking his talents to Miami — a slight that James hasn’t forgotten — Gilbert decided to use his team’s newfound fortune as the basis for a $140 million upgrade to the city’s Quicken Loans Arena.
By throwing public money at everything including the three sports facilities, hotels, the Ohio Theater, the Rock and Roll Hall of Fame, the House of Blues and an aquarium, Cuyahoga County has plunged itself into nearly $1.1 billion in debt.
Gilbert wants Cuyahoga County to cover $70 million of the project’s costs, but there are more than a few problems with that request. For one, Cuyahoga County is still paying off the initial costs of both the arena and the Cleveland Indians’ home at Progressive Field, both of which opened in 1994. After the city cleared out the Central Market fruit and vegetable market that had been on the site since 1856, Cuyahoga County implemented a “sin tax” on tobacco and alcohol products to pay the cost of constructing those two sports facilities.
Roldo Bartimole, a reporter and blogger who’s been covering Cleveland for the better part of half a century, notes that the county took in $240 million from the initial sin tax, but has since extended it twice to reel in another $375 million to cover cost overruns on those projects. It has also offered tax abatements for Quicken Loans Arena, Progressive Field and the FirstEnergy Stadium (home of the National Football League’s Cleveland Browns since opening in 1999) that take $16 million out of the county’s coffers each year, half of which Bartimole says would go to Cleveland schools.
The second obstacle between Gilbert and the county’s money is that it has none left to give. By throwing public money at everything including the three sports facilities mentioned above, hotels, the Ohio Theater, the Rock and Roll Hall of Fame, the House of Blues and an aquarium, Cuyahoga County has plunged itself into nearly $1.1 billion in debt. Now, Gilbert, who threw the county some free arena renovations when he bought the Cavaliers in 2005, wants more and is likely going to get it. County executives are now suggesting that Destination Cleveland, the county’s tax-funded tourist agency, can step in and help pay the $70 million that Gilbert’s seeking. Considering that Cavaliers Chief Executive Officer Len Komoroski sits on Destination Cleveland’s board — and that nobody seems to care about conflicts of interest anymore — there’s a good chance the Cavs get what they’re looking for.
Considering that Bartimole puts the payoff date for the city’s current stadium and arena debt sometime in 2023 — and that the Gateway projects were already bailed out of bankruptcy once before — this is an obviously terrible deal for both Cleveland and Cuyahoga County. Throw in the fact that Gilbert alone is worth $4.9 billion and there shouldn’t be one additional dime of public money dropped into that facility.
As comically inept as Cuyahoga County is at throwing public money toward private enterprises, Gilbert is conversely adept at aiming firehoses of public money directly into his accounts and opening the spigot. He took $50 million from Michigan to move Quicken’s headquarters from the suburbs to downtown Detroit in 2010. He buys buildings in that city’s downtown for cents on the dollar and has designs on turning a failed, publicly funded county jail project into a Major League Soccer stadium.
He’s hailed as one of Detroit’s saviors, but his own company’s high-pressure, predatory lending tactics and failed mortgages helped put the city in such a dire situation in the first place. Now he’s trying to pry more public money from Cleveland just when that city and its surrounding county can least afford it.
This is a crucial moment for Cleveland. Quicken Loans Arena is now tied with Chicago’s United Center as the eighth-oldest arenas in the NBA. They’ll be bumped up to the No. 7 spot when the Detroit Pistons leave the Palace at Auburn Hills next year for a new arena in Gilbert’s other home in downtown Detroit and will jump to No. 6 when the Golden State Warriors leave Oracle Arena in Oakland in 2018. There are 10 ballparks in Major League Baseball older than Progressive Field, but one three years younger — Atlanta’s Turner Field — is being replaced next year. Meanwhile, a ballpark built the same year as Progressive Field — the Texas Rangers’ Globe Life Park — is about to be replaced after voters approved funding for a new facility.
If Cleveland and Cuyahoga County don’t say no now, they never will. However, with the Cavaliers the reigning NBA champions and the Indians good enough to be a game away from the club’s first World Series win since 1948, “no” may be absent from Cleveland’s vocabulary for a while.