CLEVELAND, Ohio -- The Cleveland Cavaliers have quietly suggested evenly splitting with Cuyahoga County the cost of a multimillion-dollar overhaul of the exterior of Quicken Loans Arena as part of a project to increase the building's square footage, Northeast Ohio Media Group has learned.
The team's plan would expand the building's footprint, creating more public space inside -- and additional opportunities to sell concessions and other items -- and giving the concrete building a glass exterior, according to sources with knowledge of of the team's plan.
The project is estimated to cost $140 million, although the figure is only conceptual and is subject to change. The team has suggested the county pay for its half by borrowing money through the issuance of bonds, and by using excess revenues from the county's existing 'sin tax,' a countywide tax on alcohol and cigarettes.
County voters last May approved a 20-year extension of the sin tax to pay for stadium upkeep and to pay off stadium-related debt. The Cavs have not suggested using the extended sin tax, which will take effect in August, for the proposed arena overhaul.
Emily Lundgard, a spokeswoman for County Executive Armond Budish, said: "We are aware of a proposal from the Cavaliers organization, but it is only conceptual at this point. There have been no negotiations or decisions."
Tim Offtermatt, chairman of the board for the Gateway Economic Development Corporation, the non-profit landlord of The Q and Progressive Field, said Wednesday that the Cavs have not presented any plans to his organization.
As previously reported by NEOMG, the Cavs have approached Budish, who took office in January, after unsuccessfully lobbying Ed FitzGerald, Budish's predecessor, last year for taxpayer support for the plan.
Team officials declined to comment for this story, but previously have issued a statement (PDF) saying they hope to soon move forward with a plan to give the building a "newly energized and exciting profile." They have said the arena is a key part of ongoing downtown development opportunities, and helps attract high-profile events, like the 2016 Republican National Convention, to the city.
They also said the team has invested "hundreds of millions of dollars" in the facility over the last 20 years.
At a news conference last month scheduled to make an unrelated announcement, Budish declined to say whether he would be willing to invest taxpayer money in a renovation of The Q.
However, Budish has expressed concern about the county's ability to pay for competing capital projects, including a construction plan for MetroHealth system, the county-subsidized healthcare chain, and the possible renovation or replacement of the county's aging Justice Center, which houses county and city courts and the Cleveland police department, among other government agencies.
Quicken Loans Arena, which opened in 1994, is the home of the Cavaliers basketball team, the Lake Erie Monsters hockey team, among more than 200 annual events. It is owned by Gateway, the board of directors for which are appointed by county and Cleveland officials. But ownership of the arena ultimately would revert to the county if the facility were to lack a tenant.
The Cavs' current lease to use the building runs through 2027.
The county borrowed $120 million in 1992 and 1994 to build The Q and Progressive Field, then known as Gund Arena and Jacobs Field. As of the beginning of this year, the county still owed $55.1 million, according to county records.
The county last year paid $9.2 million this year on its Gateway debt, $5.5 million of which came from the county's general operating funds. The rest was paid for by money generated by hotel taxes and taxes on ticket sales.
The Cavs have suggested that the county might structure debt incurred for the proposed arena overhaul so that repayment would begin in 2023, when existing Gateway debt is scheduled to be repaid.
Sin tax revenues are earmarked for upkeep of professional sports facilities. Any sin tax money used on The Q would not be available for Progressive Field or FirstEnergy Stadium, both of which the city ultimately owns.
Cleveland Mayor Frank Jackson has said he supports splitting the sin tax equally between the three sports facilities. But Budish and County Council ultimately will decide how the money will be allocated. A top administration Budish official who sits on the Gateway board said earlier this month that a sin-tax plan is still in the works.
In an emailed statement, Jackson said: "We are aware of a Quicken Loans Arena plan to redevelop the Arena. It's an ambitious plan, but to our knowledge no agreement on any proposal has been made."
County Councilman Jack Schron, who unsuccessfully challenged Budish for county executive last year, said he learned some details of the Cavs' plan during his campaign. To explain his understanding of the team's concept, he compared it to the recent overhaul of the Cleveland Art Museum, which involved building a glass atrium around the building.
"It's going to be tough pulling together the funding at this point, knowing where we are financially," Schron said in a recent interview.
But since no formal proposal is on the table, it's possible that the county could come up with a creative way to pay for the project, Schron said.
This story has been revised to make more clear that the Cavs have not suggested using revenues from the 20-year extension of the sin tax to overhaul the arena.