Cuyahoga County, Cavaliers Move Ahead With Quicken Loans Arena Deal In 2018
Cleveland and Cuyahoga County end the year with the pieces in place for the Quicken Loans Arena renovation to go forward.
Initial designs for the Q renovation received approval from the Cleveland Planning Commission earlier in December.
The Cavaliers don’t anticipate construction getting underway “in earnest” until after the first of the year, corporate communications director Phyllis Salem wrote in an email.
Debt payments on the project will cost $193 million through 2035, according to a repayment schedule provided by the county. Public sources will cover about $100 million. The team is on the hook for almost $93 million in principal and interest.
The county will pay back its share of the debt from its hotel bed tax, a quarter-percent sales tax used for the convention center and hotel project, as well as portions of the sales and city admission taxes collected at the arena.
Leftover revenue will funnel into reserve accounts to cover shortfalls and a possible future sports project.
In April, Mayor Frank Jackson’s then-chief of staff Ken Silliman told city council that reserve money could be available for discussions with the Indians about renewing the team’s lease.
If there’s not enough money in reserves to pay debt service in a given year, the Cavaliers would make up the difference, county financial advisor Tim Offtermatt said. The county would reimburse the team later if there’s more money in reserves than remaining debt, he said.
As of September, the team estimated construction costs at about $151.6 million, according to Offtermatt. He said the Cavaliers would pay for costs beyond the $140 million funded by the bond sale.
Opponents of the agreement tried to put it to a voter referendum earlier this year.
Cleveland city council refused to accept the initiative petitions, saying that doing so would violate a contract. In August, the Ohio Supreme Court ordered council to accept the petitions.
The Cavaliers then announced the team would pull out of the deal. But days after the Greater Cleveland Congregations withdrew its petitions, the team said the deal was back on.