CLEVELAND, Ohio – Cuyahoga County will not provide a large infusion of money for major renovations to Progressive Field and Quicken Loans Arena because officials said they will not sell bonds backed by the sin tax.
Instead the Cleveland Cavaliers and Cleveland Indians, along with the Cleveland Browns, will likely split about $7.5 million each year raised by Cuyahoga County taxes on alcohol and cigarettes.
The money won’t go far, according to five-year wish lists recently submitted by the Cavs and Indians to the non-profit Gateway Economic Development Corp, which owns the arena and stadium and enforces the team leases on behalf of the county.
The Indians, for example, want $8.5 million to replace all the seats. The Cavs want $17.7 million to replace the heating, cooling and ventilation systems. See a list of requests below.
In the past the Cavs have fronted the cost of some sin tax projects and have been reimbursed, which would be an option for that team and the Indians if large sums of sin tax funds are not available, Gateway officials said.
According to the leases Gateway is responsible for all single repairs or upgrades that cost $500,000 or more.
What happened with the tax funds?
Voters approved the county’s latest 20-year tax on alcohol and cigarettes in 2014. The sin tax generates about $15 million a year.
As an advance on the tax, the county in fall 2015 sold $60 million in bonds to finance repairs and upgrades to Progressive Field and the Q, including a new scoreboard for the Indians and a new roof for the Cavs.
Now, about $7 million of sin tax revenues annually goes toward paying the interest and principal on the 10-year bonds.
What is the Cuyahoga County’s sin tax and what does it pay for
What money is left?
Todd Greathouse, Gateway’s executive director, said about $1.5 million is currently available for capital repairs.
“The well is almost dry and the projects may not go forward unless they self-fund them,” Greathouse said.
The Browns, Cavs and Indians now share revenues from the sin tax following a plan approved by Cuyahoga County Council in 2016.
The city of Cleveland, which owns FirstEnergy Stadium, agreed in August 2016 to invest about $10 million there. The Browns, via the city, have requested $23.7 million in sin tax revenue to repair FirstEnergy Stadium over the next 10 years.
The Indians requested their $782,000 toward the $1.2 million cost for suite renovations. The remainder came from savings from other sin tax-funded projects.
The Cavs are planning a $140 million transformation of the Q separate from the sin tax. Under the current plan, the Cavs would split the cost with the county, city of Cleveland and Destination Cleveland. And the Indians may have access to about $45 million in a taxpayer-funded reserve created by the same bonds.
Q&A: How the Cavs Quicken Loans Arena renovation deal breaks down with the county and city
Both the stadium and arena are 23 years old, and many major components need repairs or replacing.
Here’s some of the major sin-tax funded projects requested by each team.
The Indians: 14 projects totaling $47.37 million.
- $12 million: Food service equipment
- $8.5 million: Replacing the seats in the stadium
- $6.1 million: Air handling units
- $3.9 million: Replacing seats in the stadium
- $3.5 million: Exhaust fans in concessions and boiler room
- $2.7 million: Upper deck concrete
The Cavs: 11 projects totaling $32.7 million.
- $17.7 million: Replacement of HVAC systems
- $4.5 million: Precast sealing and painting
- $3.1 million: Replacement of ice floor and plant
- $2 million: Sport lighting
How has the first $60 million in six tax bonds been spent?
$23 million was allocated to the Cavs.
- $9.35 million: Scoreboard and digital display
- $4.5 million: Video production control room
- $4.2 million: Roof replacement
- $3 million: Safety and security system
- $1.8 million: Arena bowl sound system
$37 million was allocated to the Indians.
They received more because they submitted more requests before the amount of the bond was finalized. Projects include:
- $15.5 million: Scoreboard system
- $5.2 million: HVAC system
- $3.3 million: Sound system
- $2.8 million: Access controls and surveillance system
- $2.2 million: LED field lights
- $2.1 million: High steel painting
- $1.7 million: Suite and press box glass glazing
- $1.5 million: Concrete resurfacing
- $1.4 million: Food service equipment
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