CLEVELAND, Ohio – Monday night’s abrupt postponement of City Council’s final vote on whether to commit $88 million in tax dollars to upgrades at Quicken Loans Arena suggests that council leaders still hope to get enough votes to put the deal in place immediately.
Council President Kevin Kelley needed 12 votes to succeed on Monday, but appeared to have no more than 11. Under rules set by the City Charter, that would have meant the deal would have passed, but would not have taken effect for 30 days.
Kelley said only that some unnamed members of council had asked for more time to consider the deal.
What’s the rush?
A 30-day delay would give opponents a chance to block the effort indefinitely with a voter referendum and would possibly prevent construction from beginning this summer, as wished by the Cavaliers.
By postponing the vote for a week, Kelley and other supporters of the deal will have time to lobby the six council members on record as likely nay votes. Sources in and around council said that the Cavaliers have been involved in those efforts too, making private presentations on the merits of the deal.
Cavs owner Dan Gilbert reportedly called Councilman Zack Reed, sources said. For his part, Reed wouldn’t discuss any lobbying efforts.
What is the project?
The deal, a partnership among Cleveland, Cuyahoga County, Destination Cleveland and the Cleveland Cavaliers, would allow $140 million in upgrades to The Q, work that the Cavaliers say would lengthen the life of the arena into the 2030s.
The work would dramatically alter the facility’s appearance, creating more space for dining, bars and public gathering. The Cavaliers contend that the work will keep the 22-year-old arena competitive with other cities as they vie for major concert acts and other shows.
Cuyahoga County Council already has voted to sell bonds to finance the $140 million in improvements. The total cost of repaying those bonds over 17 years is estimated to be about $282 million.
The Cavaliers have agreed to ultimately pay $122 million and to extend their lease as part of the deal, committing the team to home games in the arena until at least 2034.
Cleveland’s contribution is estimated at $88 million — $8 million a year over 11 years — beginning in 2024. The money represents a portion of admissions taxes to be charged on ticket sales at The Q.
Cleveland collects that money now and diverts a portion of it toward debt service on the arena. Those bonds will be paid off in 2023, allowing the city to then divert the money to debt service on the upgrades.
What about a referendum?
Opponents of the deal, including the nonprofit Greater Cleveland Congregations, have declined to say whether they intend to launch a referendum campaign. They can’t begin to do so until council approves the ordinance.
And as mentioned above, how that ordinance is approved could make a big difference.
If approved as a so-called emergency measure with 12 or more votes, the deal would take effect immediately and remain in effect unless repealed by voters in November. But a successful petition drive would halt a deal approved by a simple majority until after the November election.
That’s an important distinction here because if approved with 12 votes, Cuyahoga County could move ahead quickly with sale of bonds to finance the upgrades.
Cavaliers executives have said work needs to get started this summer. That would allow for completion by 2020 and perhaps an NBA all-star game in the near future.
Citizens can force a referendum on an ordinance – whether passed as an emergency or non-emergency — if they present petitions signed by about 6,000 registered voters to the clerk of City Council within 30 days of passage.
Who supports the deal and why?
The project is supported by the NAACP, Cleveland Building and Construction Trades Council and the Black Contractors Group.
Leaders of the Cleveland chapter of the NAACP told City Council they view it as an economic development project with potential to stir job activity beyond just the construction work.
The labor groups have praised the project for the construction jobs it would create. They also have lauded Gilbert for his previous commitment to hiring Clevelanders, people of color and women on jobs such as the casino.
Who opposes the deal and why?
In addition to Greater Cleveland Congregations, the Cuyahoga County Progressive Caucus also is opposed to the project.
At a public hearing before City Council, speakers for the two social activist organizations argued that Cleveland has serious pressing needs in its neighborhoods and that investing in The Q project downtown won’t address those needs.
At the least, they said, there should be a community benefits package incorporated into the deal that targets money at specific neighborhood problems.
What happens next?
Kelley, asked after Monday’s council meeting, declined to say who had requested more time to discuss the deal. But that discussion likely will involve lobbying opponents to try and convince one to flip.
Sources in City Hall speaking on background told cleveland.com there was intense lobbying in the last week. Those efforts, they said, included calls from the Cavaliers organization and even Gilbert.
Speculation is that those efforts will continue this week.
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