It's a Sin
The vexing sin tax that we are being asked to extend for 20 years to support Cleveland's professional sports facilities is the price of incompetence by public officials. Their lack of diligence and vision may cost the community more than $1 billion in the name of sport.
FirstEnergy Stadium, Quicken Loans Arena and Progressive Field, all publicly owned, are supported by Cuyahoga County's sin tax on beer, liquor and cigarettes. Not only has the tax resulted in pathetic football, abysmal basketball and ambivalent baseball, the leases at the stadiums and arena favor the teams, especially the Browns.
Cleveland's population loss is constant and tremendous, the metro area was the nation's next to last in job growth last year and the school system is among the state's worst. Against this dark canvas, you would think that county officials, Mayor Frank Jackson and the Greater Cleveland Partnership would have a persuasive argument to ask the teams to renegotiate the leases and give the community some relief. Instead, City Hall, the chamber of commerce and what remains of a morning newspaper have simply acquiesced to the support of some of the city's worst sports teams in history. The unspoken fear is that if voters reject the tax on May 6, one or more of the teams might move.
We all know it happened once before over a stadium. Some fans still say Art Modell created our woe when he moved the Cleveland Browns to Baltimore in 1995. But let us not cast all the blame on the dead guy.
The blame for the high cost of our sports venues really belongs to a generation of elected officials who, for decades, ignored the city's need for new facilities, largely out of fear for their political careers. When faced with the crisis of teams leaving on their watch, they panicked and overspent. We are paying millions more in public money for these mistakes, and today's leaders are not even trying to fix the problem.
The aging Cleveland Municipal Stadium was a half-century old when talk of a replacement began in the 1980s. A massive steel and concrete facility that held a minimum of amenities and more than a measure of history, it was considered among the worst in professional sports. Officials knew this for decades, but they lived by Cleveland's political philosophy that it is better to do nothing than something.
In 1984, a domed stadium for baseball, football and basketball was proposed at a projected cost of $150 million. Unfortunately, the funding was tied to property taxes and the campaign was marred by political contretemps. The issue was defeated at the polls 2-to-1. After that vote, as early as 1985, Modell talked with officials in Baltimore about creating an NFL expansion team there.
Yet public officials such as Gov. George Voinovich and Mayor Mike White ignored the need for a new football stadium until it was too late. The Gateway project, approved by voters in 1990 and funded by the sin tax, included only a baseball stadium and arena. Gateway's cost overruns totaled $140 million, debt the county is still paying off. In 1995, White belatedly energized Cuyahoga County to pass a sin tax extension for a football stadium. But by then, Modell had given up. He announced the move to Baltimore one day before voters approved the tax.
Later, a reporter in Maryland wrote that Baltimore's mayor had warned Voinovich years in advance that Modell was interested in moving. Voinovich told the writer that he did not remember the phone call. As governor, Voinovich did nothing toward saving the team.
During the rush to get a new team, Cleveland made major mistakes. White insisted on building the stadium on the lakefront, in order to get the project done more quickly. Consultants had begged him to put it elsewhere because of the hard weather the structure would endure, which guaranteed expensive upkeep. One stadium expert told me recently that he would be surprised if FirstEnergy Stadium lasts another 10 years because of its location.
The city's next mistake was approving the Browns' lease, which charges the team only $250,000 in rent while the city absorbs more than $600,000 in property taxes. The team takes all advertising, concessions and naming rights revenues. Lawyer Fred Nance of Squire Sanders represented the city in its lease negotiations with the team. In 2009, Nance became the Browns general counsel.
Now, the community is asked to extend the sin tax to raise another $260 million for repairs and upgrades of the stadiums and arena — on top of the $350 million the tax already raised to build them. The domed stadium looks like a bargain in retrospect.
The sin tax is not the only public money that has gone to the sports facilities. Add in other tax sources and unpaid construction debts, and the sin tax extension will push the total public spending on the sports facilities to more than $1 billion.
Cleveland sports fans live throughout Northeast Ohio, and the Greater Cleveland Partnership promotes a 16-county area. Yet the business group supports a tax that will be levied only in Cuyahoga County.
Even more disturbing was the recent revelation by Alan Glazen, an advertising executive who was hired to promote the sin tax in 1990 and its renewal in 1995. He is opposing the tax now, stating that the business community lied when it claimed the Gateway sports facilities would provide "28,000 good-paying jobs."
Clearly, if the tax fails, its supporters will put it on the ballot again. The city and county are obligated to maintain the facilities one way or another, and would be hard-strapped to do so out of general funds.
If that happens, officials should reopen negotiations with the teams. Under the circumstances, they should have done so before asking voters to support the extension. Leases were renegotiated once before, when Gateway faced bankruptcy. City Hall, county leadership and the business community should take a public stand and cast the onus of refusing to negotiate onto the teams.
Cleveland is a diminishing sports marketplace, racked by poverty and job loss. It may be that we cannot support all three teams, let alone subsidize their workplaces. The Indians and Cavaliers rarely sell out these days. The only regular sellout has been of us — sold out by a succession of government and civic officials who gave the town away.
12:00 AM EST
April 18, 2014