Cuyahoga County will pay $3.5 million to reimburse the Cleveland Indians for already completed work at Progressive Field, including suite renovations, an expansion to the players’ parking lot and escalator repairs.
The county is drawing the money from a reserve fund set up as part of the 2017 deal to renovate the Cavaliers’ Quicken Loans Arena, now Rocket Mortgage FieldHouse.
Gateway Economic Development Corporation, the quasi-public entity that owns and pays to renovate both Progressive Field and Rocket Mortgage FieldHouse, approved the work in 2018, 2019 and 2020.
Although revenues from a “sin tax” on alcohol and cigarettes typically fund repairs, the COVID-19 pandemic has hurt collections, Gateway Chairman Ken Silliman told the county council Tuesday, and Gateway is looking for a different funding source.
“The Indians have asked us to expedite the amount of money that Gateway owes to the team,” Silliman said, adding that the team is also seeing less revenue for the truncated and spectator-less 2020 MLB season.
The $3.5 million will pay Gateway’s outstanding balance for several projects, including:
- about $1.5 million for escalator repairs,
- $661,653 for an expanded players’ parking lot and guardhouse renovation,
- $451,500 for preventative escalator maintenance,
- $354,375 for additional escalator-related work,
- $290,000 for Club Lounge renovations,
- $141,727 for building automation and light controls, and
- $108,400 for suite renovations.
There’s currently about $5.7 million available in the county reserve fund that will pay for the work in lieu of sin tax revenue, county financial advisor Bob Franz said. Cuyahoga County set that money aside to help in eventual renegotiations of the Indians’ lease, which expires in 2023.
Council approved the measure, but Republican Councilman Michael Gallagher questioned some of the work Gateway had agreed to pay for.
“Why would we pay that kind of money to expand their parking lot?” he asked. “I have some serious concerns that there’s a lot of things on here that are going the way of the Indians and not going the way of the taxpayers of Cuyahoga County.”
County voters originally approved the sin tax in 1990 to pay for the construction of Cleveland’s professional sports facilities. In 2014, voters opted to renew the tax for another 20 years to maintain the complex.
The tax brings in between $13 and $14 million each year. Cleveland and Cuyahoga County split sin tax revenues three ways for renovations and maintenance at FirstEnergy Stadium, Progressive Field and Rocket Mortgage FieldHouse.
But revenues have taken a dive during the pandemic. Collections in May were about a third below May 2019’s levels, and collections in June were down about 21 percent, according to Franz.
On top of that, the teams have spent much of the sin tax allocation. Gateway has about $2.3 million available in sin tax revenue each year to spend on Progressive Field, Silliman said. The situation is tighter for the Cavaliers, who have essentially exhausted their available sin tax money, he said.
Last year, Cuyahoga County sold $40 million in bonds to finance repairs at Rocket Mortgage FieldHouse, drawing on sin tax money to pay down the debt.
The Indians’ lease agreement with Gateway obligates taxpayers to foot the bill for approved expenses above $500,000.
“We owe it, we have it and I really don’t think we have any serious alternatives to paying it,” Council President Dan Brady said.
Copyright 2020 90.3 WCPN ideastream. To see more, visit 90.3 WCPN ideastream. 9(MDAxMzY2MjQ0MDEyMzcyMDQ5MzBhZWU5NA001))