The Quicken Loans Arena in downtown Cleveland has been in the spotlight the past year — not only were the Cavaliers back in the NBA Finals (for a third straight year), it hosted the Republican National Convention. Downtown Cleveland got a facelift for the latter event.
The arena also is 23 years old, and like most arenas of that age is in need of some renovations.
It’s a publicly-owned building, and the Cavaliers were partnering with local government (Cleveland and Cuyahoga County) to do the upgrades (the Cavs put in $70 million, the governments $70 million). However, a group of taxpayers in the area wanted to put a referendum on the ballot asking voters to approve or shoot down that use of public funds for arena upgrades. Recently an Ohio State Supreme Court ruling said that if the petition to get the referendum on the ballot has the valid signatures, it can go forward (the Cleveland City Clerk had held up the process saying the deal was already done).
Monday, the Cavaliers pulled out of the renovation plans, doing so in a long and testy letter.
The prospective referendum will cause the groundbreaking of The Q Transformation to miss the current construction cycle, which pushes the overall price tag of the project higher due to rising construction costs. In addition, a time sensitive financing package that included historically low interest rates would be negatively impacted by further delay due to a prospective referendum exposing the project to an expected higher interest rate environment…
“Quicken Loans Arena brings over 2 million people a year to downtown Cleveland and last year alone produced $245 million in economic activity including the RNC and the NBA Finals. This facility is Cleveland’s gateway to the world as many of our events are broadcast nationally and internationally. The investments over the years into The Q have paid back multiples in economic impact, job creation and tax generation. It is very disappointing to see our further private investment into The Q Transformation project reach this ending point,” said Len Komoroski, CEO of the Cleveland Cavaliers.
If the question is “should voters have a direct say in the spending of public money on a sports/entertainment venue?” then the answer should be yes. Even if it means it costs a little more to do the work.
If it’s really a good deal for the city and region, then the voters will approve it, but the city and Cavaliers need to sell them on it and convince them. City governments nationwide are strapped for cash for things like police and libraries, and while an argument can be made that these types of investments help fund those other priorities long term, it’s something voters should have a say in.
Storming off angry is unbecoming. If the Cavaliers start to come apart on the court in the coming years — meaning if LeBron James leaves as many expect — it would be much harder to get this kind of referendum approved.