Showdown Coming on Public Subsidies
Originally published at Have Coffee Will Write on 12 February 2017.
For the first time in more than two decades, two civic organizations are opposing an Establishment desire to seize more public dollars to subsidize a downtown development—the Quicken Arena.
Citizens are actually challenging the political leadership and their corporate dictators, the Greater Cleveland Partnership, which represents high-powered business and legal elites.
This is not apparently what County Executive Armond Budish and Mayor Frank Jackson were expecting when they bowed to Dan Gilbert on a scheme to revamp the Q. Both Councils—city and county—will also have to sign off on the deal that will cost more than $280 million over 17 years.
This new opposition has the resistance quality prominent now in national politics against President Donald Trump. It represents an awareness of the misuse of public resources as part of the inequality that plagues working people.
The Gateway Economic Development Corp.—operators of Progressive Field and Q Arena—quietly canceled its monthly February meeting. This prevents any public opportunity to protest the new grab of public money before the city and county votes.
Likewise as suspicious was the snatch of Scene alternative newspaper boxes from downtown locations. The excuse given was workers of the Downtown Cleveland Alliance, a pseudo private government and offshoot of the Greater Cleveland Partnership, picked up the boxes for safety reasons. Of their own volition. I’ve have talked with some of these workers. They would not act without direction. So Joe Marinucci, Alliance boss, ($208,000 salary, $53,898 benefits) should come clean on the motives an organization packed with developers from John Ferchill to Fred Geis. Joe, tell us the truth. What goes?
The money confiscation is especially repulsive when one considers Cuyahoga County voters already passed a 20-year sin tax worth some $260 million. It was supposed to finance the sports facilities.
However, the politicians and Gilbert want none of this touched. They want to create NEW public subsidies. Their ravenousness never satisfied.
Where will they acquire this new money? $16 million from county funds; $44 million sliced from public bed taxes and $88 million from city admission taxes from 2024-2036. Why those dates? Because those taxes are being used already for Gateway bonds on arena overruns back from the mid-1990. The tax grab on those bonds ends December 2023.
These funds could be used for real needs.
So a new drain of public resources will be used, if we allow them.
They soak up public funds like a giant sponge.
The scheme calls for new bonds to be let by the County to pay for the improvements, with Gilbert tossing in some money.
The two organizations protesting the public subsidy are the new but powerful Greater Cleveland Congregations, made up of religious groups from Catholic, Jewish and Protestant parishes and synagogues, and the citizens action group Cuyahoga County Progressive Caucus, an offshoot recent political wars.
These organizations might be a bit angrier if they understood the amount of property taxes that are being diverted from the arena, particularly the amount taken from the Cleveland schools.
Here are some facts for them: this year (2017) Quicken Arena is valued at $113 million. That would indicate that the tax on the arena structure (not land) should yield $3.99 million this year in taxes.
All these are taxpayer built facilities with minimum owner investment.
What will Quicken arena pay? Zero.
Because in the early 1990s Mayor Michael White and County Commissioner Tim Hagan successfully lobbied the state legislature to not give tax abatement but full tax exemption for the sports structures. Thus, the arena has never paid a property tax on the structure. And never will.
Of the nearly $4 million due in taxes, 60 percent or about $2.4 million would normally go to the Cleveland schools. Sorry kids. Sorry teachers.
Add that annual gift to billionaire Dan Gilbert over decades and you see how enormous the subsidy really is.
Those dollars add up to tens or hundreds of millions of dollars missing from the public treasury.
Still apparently not enough. Gilbert, LeBron and the rest want more. Yes, I blame the players too. They know what’s going on.
That’s not the only taxes siphoned off by our sports businesses.
First Energy Browns Stadium is valued at $276-million.
This year it should pay $9.6 million in property taxes.
Once again it pays Zero. Nothing!
More than $5.5 million of that sum would go to the Cleveland schools. The rest would go to the county, city, and city libraries.
But the hell with them, too.
Ironically, First Energy stadium sits on city land. The land is valued at $19 million. The taxes this year total $675,990. Those taxes have been paid. Wow. I wonder why.
Because the land is owned by Cleveland and the citizens of Cleveland paid the first half property taxes, some $337,996, and will pay the rest by the end of the year. Total: $675,990. City money.
It’s curious that those high taxes are paid by the city but the city only charges Di and Jimmy Haslam, owners of the Browns, a measly $250,000 for the year. And that sum, unlike the value of the land, never goes up over the duration of the 30-year lease.
We might as well toss in Progressive Field.
The value of that building is $188 million. The tax exemption is worth $6.68 million with 60 percent from the schools, or about $4 million a year.
Thus, about $20 million this year alone is skimmed from the city, county and Cleveland schools. These sports owners are professional skimmers.
Do you know what Mayor White told voters in 1990 when seeking the first sin tax?
In a full-page ad in the Plain Dealer he promised “no tax abatement,” yet went further to lobby for “tax exemption” and he promised the schools would get an additional $15 million a year.
The full-page ad used a photo of children to depict the sports subsidy as helping Cleveland kids. What chutzpa!
This county area simply cannot afford any longer to finance three major league sports teams.
So they will keep asking for more as long as citizens keep paying the billionaire owners and multi-millionaire players.
It’s as simple as that.
Please remember to CALL AND EMAIL YOUR COUNTY/CITY COUNCIL MEMBERS to tell them you are #NOTALLIN on the Q arena deal. We’ll pack the county council meeting on February 14, and want them to be fully aware that their constituents do NOT support this deal as it stands. CLICK HERE for the flyer on how to find your representative, as well as a sample script. You can read more about the campaign below. Let us know if you have any questions by emailing email@example.com
The GCC asks that the city and county set-up funding for ordinary people as they do for wealthy sports owners. The city and county should establish a “Community and Neighborhoods Development Fund” that will match the city and county’s investment in the Q, the letter says.
an opportunity for the people of Cleveland and Cuyahoga County to end their silence and start to be citizens instead of spectators to the decisions impacting their communities.
This is an opportunity to break with a past where such projects are routinely rubber stamped. We deem this renovation to be a breach of public trust and a gross misuse of public funds. We will not stand by while those elected to lead us redefine progress as working people subsidizing billionaires.
It’s long past time Cleveland citizens woke up to what has been happening in their name and from their and their children’s pockets.
Not a new dime for billionaire casino czar Gilbert!