Cuyahoga County Considers Bond Sale For Rocket Mortgage Fieldhouse Repairs
Cuyahoga County Council is considering borrowing about $40 million to finance repairs at Rocket Mortgage Fieldhouse under the Cleveland Cavaliers’ lease agreement.
The work includes replacing the heating and air conditioning system, fire alarms and lights. The Cavaliers are also asking the public to fund work on an ice floor, chiller plant and to improve the bathrooms under the Americans with Disabilities Act.
Under the proposal, the county would sell about $40 million in bonds to cover the work, paying off the debt with revenue from an existing tax on alcohol and cigarettes. The team’s lease obligates the public to pay for any capital repairs totaling more than $500,000.
Gateway Economic Development Corporation, a quasi-governmental non-profit that approves repairs for public funding, has already signed off on the work. This arrangement would be separate from the 2017 public financing deal for the fieldhouse’s transformation project.
Voters renewed the 20-year sin tax in 2014 to pay for repairs at the fieldhouse, Progressive Field and FirstEnergy Stadium. The county estimates the tax will raise about $13 million annually. Proceeds are split three ways among the teams.
But Will Tarter, a local policy analyst, warned that the Cavaliers and Indians are spending their shares of the money quickly. He asked how the county planned to fund future upgrades if sin tax money isn’t enough to cover the work.
“Because of the maintenance shortfall, what is the long-term solution to stadium maintenance that we know is coming?” he asked council.
Tarter questioned why the county was paying for the fieldhouse repairs up front, rather than reimbursing the team over time as revenues come in.
Cavaliers CEO Len Komoroski told council the team didn’t have the flexibility to put off repairs.
“Major capital repairs happen when they’re needed,” he said.
Komoroski said this wave of funding for capital repairs at the fieldhouse would take care of most of what the facility needs “for the foreseeable near future.”
In 2015, Cuyahoga County sold about $60.5 million in bonds to finance $23 million in work at then-Quicken Loans Arena and $37 million in improvements at Progressive Field, according to Gateway chairman Ken Silliman.
Asked about Tarter’s questions later on Tuesday, Democratic County Councilman Dale Miller said they were “a legitimate concern.” He said the county was taking things “one step at a time,” but will need to pay attention to the issue in the long run.
“This is not a new concern,” Miller told ideastream. “When the sin tax was passed in 2014, it was generally known even then that the money that it was going to provide probably would not be enough to provide all the necessary repairs over the 20-year duration.”
Miller said that if Cleveland wants to host three major professional sports teams into the future, it will need to extend the useful life of the stadiums.
“We have to find ways to make these facilities last 50 or 75 or 100 years,” he said, “because we just don’t have the money to do a $500 million or $1 billion new stadium every 20 or 25 years.”
Council will hold another hearing on the proposal in two weeks.