ROLDO RIGHTS ON INTO SPORTS’ $$$ QUICKSAND…

November 3rd, 2015

roldo caveliers 160202

We’re into the quicksand of borrowing and spending for wealthy sports owners again without the news media EVER trying to put into context what we are spending for Haslam, Dolan and Gilbert.

Context makes the real picture. Ugly.

Just how much corporate welfare flows would be too revealing. Too shocking. So the media ignore the obvious.

But the public has a right to know. Just how out of balance is our local public agenda? Just how deep into the public pockets are these civic forces, led by the Greater Cleveland Partnership and the foundation gang?

We’re not talking simple crony capitalism here. This is straight-out corrupt capitalism at its best. Or should we say worst.

The latest is a $65 million bond issue for the Cleveland Indians and Cleveland Cavaliers. Why? Because they want it. Isn’t’ that reason enough?

I’m not sure why bonds are needed at all, even if you wanted to pay for Jimmy Haslam’s and Dan Gilbert’s gizmos – scoreboards and sound systems. Like we need a bigger TV at the games and louder noise?

This kind of corruption trumps tiki huts and pizza ovens that prosecutors hunt. It doesn’t rate attention of our negligent reporters either.

We did pass another sin tax for the sports moguls. The money IS flowing in.

The sin tax, according to the latest September Cuyahoga County figures, shows an account balance of $20.3-million. Further, the total monthly revenue stream shows income of $933,000 for September, $752,000 for August and $1.5 million in July.

Why isn’t that being used rather than another bond issue with its costs—bond counsel, underwriter, advisory and other legal costs, not to mention interest payments?

Why? Because someone has to make a profit.

Seemingly we already have cash enough to pay off the debts to the teams. For debt they should themselves pay.

After all they take all the income from these facilities – from hot dogs and beer to huge TV revenue to profitable naming rights. The public gets zilch.

But our REFORMED Cuyahoga County and County Executive Armond Budish and Mayor Frank Jackson wouldn’t want to bother the billionaires with such trifling matters.

Why does the REFORMED County government have the same smell as the CORRUPT former County government? City government is in incompetent disarray. Well they dance to the same corrupt influences.

This bond request was presented to the County Council by Tim Offtermatt, Gateway chairman. Offtermatt was involved previously in many of Gateway’s financial deals. He’s listed as the former Chief Financial Officer of Gateway and now is the Board Chairman of Gateway. In other words, he’s profited from Gateway during its 25 years as a financial consultant.

Why shouldn’t he be board chairman of Gateway?

Offtermatt now is managing director of the Cleveland office of Stifel Financial Corp. At Gateway he replaced Bill Reidy, who still sits on the board. Reidy also comes from the local financial community and is retired managing partner of Pricewaterhousecooper.

Indeed, Offtermatt’s firm serves as the underwriters for the $230.8 million hotel bond borrowing by, yes, Cuyahoga County. The dough is for the hotel County taxpayers are building, courtesy of your County reps.

Very cozy.

Another bad public decision for the County taxpayers. They will be paying the $230 million, plus interest and heavy sure-to-come losses on the 600-room hotel, to be largest in Cleveland.

These same old hands wash each other’s but they never come away clean in my estimation.

The news media, primarily the Plain Dealer, which one expects in a democracy to inform citizens, seems never able to put together the big picture for taxpayers. (I might add that our alternative Cleveland Scene is no alternative.)

I’ve tried to keep score with the sports endeavors as with other matters where hefty subsidies are given to those in our community who should be paying their own way.

So here’s a review – a reminder – I’ve put together in the past that serves to help reveal the over-generosity of our elected officials, payable by you know who.

1990s ORIGINAL GATEWAY COSTS of the tax-exempted facilities:

  • JACOBS FIELD $180,000,000.
  • GUND ARENA $157,000,000.
  • A $75-million bond with payments due each January by the County to 2023 for overruns.
  • GATEWAY SITE PREPARATION $41,000,000.
  • LAND COST $21,000,000.
  • Source of above: Gateway document marked “Confidential.”

    There’s more:

  • GATEWAY GARAGES $42,000,000—city built with many free spaces for teams. The Gateway garages (one since sold to gambling interests) have been big money losers.
  • GATEWAY WALKWAY $13,000,000—RTA built.
  • There is no total price but hundreds of thousands of dollars were spent on new street work, costly granite curbing and signage for the new projects.

    Gateway’s promoters promised some 16,000 good paying full-time jobs and 28,000 jobs in all. In subsequent years Cleveland lost tens of thousands of jobs. Gateway’s promoters promised no tax abatement but successfully fought and passed state legislation for full tax EXEMPTION for the projects.

    GATEWAY POLICE PROTECTION: Mayor White & Council signed agreement that requires 50 city police at any baseball game with 35,000 attendance; 41 officers at arena large crowds. Of course, if these officers served these sports facilities they were unavailable in neighborhoods. Some police provided at overtime rates. But who cares about them.
    PUBLIC TAX FUNDS PAID FOR GATEWAY & OVER-RUNS ONLY AS OF 2013 FROM COUNTY DOCUMENT:

  • $154 Million (County general fund payments for Gateway bonds as of 2015 with $70 million still owed.)
  • $3.75 Million (County to reimburse State Loan for Gateway).
  • $3.75 Million (City to reimburse State Loan for Gateway).
  • $5.8 Million (City advance to Browns for Capital Improvements).
  • $2.0 Million (Repay loan from Cleveland Foundation for Gateway).
  • 1990s—CITY COUNCIL VOTED TAXES FOR BROWNS STADIUM CONSTRUCTION IN ADDITION TO SIN TAXES WITH EXPECTED REVENUES. STILL BEING COLLECTED:

  • DOWNTOWN PARKING 8% TAX – $213,000,000 expected revenue.
  • ADMISSION TAX HIKE – $36,000,000 expected revenue.
  • CAR RENTAL TAX – $18,000,000 expected revenue.
  • SIN TAX (first 15 years) $240 million, all gone.
  • SIN TAX—10 YEAR EXTEND $135,000,000, all gone.
  • SIN TAX – 20 YEAR EXTEND, expected to raise some $240 million.
  • RTA WATERFRONT LINE $69,000,000 and a big money loser.
  • GATEWAY WALKWAY $13,738,536.FREE PROPERTY TAXES FOREVER ON ALL SPORTS STRUCTURES:

    If sports facilities were paying property tax (which were exempted when Tim Hagan and Michael White pushed state legislation to free them of any property taxes in perpetuity) Browns stadium would be paying some $8 million a year; Quicken Arena, $3.8 million a year; Progressive Field $4.8 million a year, based on 2010 County figures. That’s more than $16 million per year in lost taxes, about half from the city’s schools. And those figures have not been updated. For 30 years that’s $480 million in lost revenue, mostly from Cleveland schools).

    1990s – BROWNS STADIUM—Other Financing:

  • STATE OF OHIO CONTRIBUTION: $37,050,000.
  • RTA CONTRIBUTION: $3,000,000.
  • CITY WATER DIV. CONTRIBUTION: $2,000,000.
  • N.E SEWER DIST. CONTRIBUTION: $2,246,760.
  • FREE USE OF CITY LAND 30 YEARS—2012 LAND VALUE ALONE: $19,007,400.
  • (I don’t have current figures for what Clevelanders are paying on bonds for the football stadium. However, by May 2009 the city had paid $102,823,947 and still owed $160,367,109 for bonds, according to city refinancing documents in 2007. Payments extend to November 2027.)
    Jimmy “Cheats” Haslam doesn’t have to pay a penny of taxes on the Browns stadium. It’s worth $276-million. (For enterprising reporters here’s the parcel number 101-02-014).

    Dan “Thuggish” Gilbert doesn’t have to pay a penny of taxes on Quicken Arena. It’s worth $113-million. (For reporters here’s the parcel number 101-28-040).

    Pat “Cables” Dolan doesn’t have to pay a penny of taxes on Progressive Field. It’s worth $176-million. (For enterprising reporters here’s the parcel number 101-33-002).

    That totals $565 MILLION. Never to pay a penny in property taxes.

    Year after year as normal property owners pay their taxes, these scofflaws don’t pay a damned penny.

    Screw the city, they say. More importantly, screw the Cleveland schools. It is the city schools main source of income.

    If they paid the taxes (on 35 percent of the above assessed values) here is what the bill should be of the recent Count recorded values:

  • The $276-million Browns stadium would pay an annual tax of $9.6 million per year. The Cleveland schools lose $5.76 million of that amount each year.
  • The $176-million Progressive field would pay taxes of $6.2 million a year and the Cleveland schools would lose $3.72 million of that annually.
  • The $113 million Quicken Arena would pay taxes of $3.9 million a year and the Cleveland schools lose $2.4 million of that sum annually.
  • Every year!

    So the three sports facilities – all tax exempted – are valued totally at $565-million and assessed for tax purposes at $197-million (35 percent of appraised value) pay no taxes.

    No wonder Michael Powell, a New York Times sports reporter, wrote a piece recently that was headlined, Depleting Cleveland, Despite Billions. It also said, “Franchise owners dip into the public’s purse for facility upkeep, straining a city.”

    PREDICTION: Cleveland and Cuyahoga County can expect financial difficulties as millions of dollars pour into sports stadiums, convention centers and other non-essentials as a bridge to the lakefront and a renewed Casino Square (formerly known as Public Square).

    By Roldo Bartimole…

    6 Responses to “ROLDO RIGHTS ON INTO SPORTS’ $$$ QUICKSAND…”

    1. Walter Nicholes says:

      I assume your figures are facts. As facts, these should outrage and awake the many persons paying burdensome taxes to support Cleveland’s Sports Free Riders.

      Is there no effective media voice left in Cleveland, able to reach significant numbers of Cleveland voters, to convey the details of such massive social corruption? Any legal venues?

      Where can your figures be moved into a civil reactions?

    2. Roldo Bartimole says:

      Walter: It’s difficult, if not impossible, to say how one moves the public to act.

      It’s clear, I believe, and long understood by anyone with eyes open that our priorities are screwed up and subsidizing sports surely tells us that.

      How one arouses the public I don’t know.

      Maybe the ridiculous of the Cleveland Browns might open some eyes.

      As Bernie Sanders says, we need a movement and I guess we’re not hurting enough yet.

    3. MFiala says:

      Roldo,

      I lost track of where to find your jeremiads. Thankfully, I’ve found them.

      And thank you for regularly hitting the egregious lost of public dollars to sports-team owners. They need to be hounded!

      I’ve been wondering aloud to anyone who will listen: where is the de Blasio of Cleveland or the Kshama Sawant? or a Bernie Sanders?

      Bernie Sanders was mayor of Burlington in the 1980s! He led an incredible movement in that city which transformed it structurally. His housing policy was rare. Indeed, it stretched Burlington into an equitable housing policy that is remarkable and sustainable, efficient and just beyond most urban standards.

      Critique begs for alternatives. And there are many, but leaders who would be such voices seem to have lost their vision long ago, beholding to those who have hold power.

      Continue w these screeds that beg a stirring.

      The best journalism there is, facts that speak for themselves!

      I am grateful for your work.

      MFiala

    4. LouR says:

      You have a typo. Paul Dolan, not Dan Dolan.

      • Jeff Hess says:

        Lou,

        Fixed.

        Thank you for stopping in, for reading and, most importantly, for taking the time to leave comments. We sustain our communities with our conversations.

        Jeff

    5. Fiala: Thanks for your comment. Cleveland certainly needs a shake-up. New blood, especially in the African-American community is a necessity.

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