The owners of the Cleveland Browns fired back Monday night after the state’s budget director and researchers for state lawmakers blasted the team’s proposal for a $3.4 billion domed stadium development in Brook Park. House Republicans included in the budget $600 million in state-backed bonds to help pay for the project, which the team has said will bring in $1.3 billion more in tax revenue than the state needs to pay back the bonds.
The Legislative Service Commission wrote in an analysis that the team’s revenue estimates were “overly optimistic”, and Office of Budget and Management Director Kim Murnieks wrote that the bond package was “risky” and included revenue projections that were inappropriately overstated.
The Haslam Sports Group said in a statement that the Murnieks memo and the LSC analysis "outlined various questions which we have previously addressed with Governor DeWine and other state officials directly. We question many of the memos’ assertions and have worked with our team of national experts to prepare relevant information and responses to the points in the OBM materials, which we have provided to the Administration. The LSC memo also contained several inaccuracies and misinformation."
A nine-page letter that accompanied the statement outlined the specifics the Haslam Sports Group disputes.
On Murnieks' claim that the bonds could be considered "risky" because of the revenue stream, the group holds to its tax revenue estimates in saying there is "substantial excess in our revenue projections to more than cover State debt service obligations, as well as unique elements of the proposed structure that further de-risk State taxpayers". That includes $50 million in upfront cash as required in the budget, which HSG says is "unprecedented for Ohio sports facility projects". The letter maintains the group's earlier claim that the project will raise $1.3 billion more than the billion dollars the state will need to pay for the bonds, and that the bond package is well within the state's debt policies.
The letter also calls out Murnieks' claim that the state will own the stadium, saying: "This is not accurate. The State will not own the proposed Brook Park stadium or be responsible for any maintenance thereof."
As to Murnieks' statement that the state doesn't have the capacity to fund big capital projects and the Browns development, HSG said the state can support more than $2 billion in annual debt service, and this project would be $40 million annually. From the HSG letter: "The State has significant remaining capacity under the existing debt policy, and there are sufficient GRF revenues to support an issuance of $600M in the contemplated stadium bonds while also taking care of other critical State priorities."
HSG also wrote the development will drive nearly $3B in total fiscal impact to the State and substantial year-round use, serving new tenants and attracting 2.3M annual visitors across NFL games and major events. This project represents one of the largest economic development projects ever in Northeast Ohio and the State."
The memo from Murnieks and the LSC analysis were the first publicly-released reviews of the Browns stadium bond package by a state or legislative agency. The project had been presented to an Ohio House committee in February and was included in the House version of the budget in late March.
There's been no comment from leaders in the Senate, which is now considering the budget. Senate Finance Chair Jerry Cirino (R-Kirtland) said in a text last week: "We are evaluating all options right now with regards to the Browns and subsequent sports related economic development."
House Republicans had praised the project as a good investment for the state. House Finance Chair Brian Stewart (R-Ashville) said the project is "consistent with what all of our competing states are doing to attract new residents and keep our young people here," and that it's backed up by detailed financial metrics, under which the new tax revenue generated by this project will pay the cost of the bonds with no out-of-pocket expense for our taxpayers."
