Browns Stadium Upgrades

Browns Stadium Upgrades

Andrew Samtoy
on Nov 21, 2013

This week, Mayor Jackson, the Cleveland City Council and the Browns released details of a plan to renovate Browns Stadium/FirstEnergy Stadium. It is estimated to cost $120,000,000 ($120 Million), and Cleveland is planning on paying $2 million per year for 15 years, or $30 million, to help pay for it.

This has caused some controversy. For example, the owner of the Browns has already received $100 million for naming rights. Others point out that many social services have seen funding cuts for the last few years, and this $30 million could be used to offer better services to Cleveland residents in need. Others say that our infrastructure is in trouble and we should pay for upgrades - for example, filling potholes. Finally, others point out that this is going to disproportionately hit Cleveland residents for the benefit of people who don't pay taxes in the city.

City Councilman Brian Cummins will be joining us, and we have reached out to the Browns and to city council members who are supportive of the city paying for these upgrades. But your voice is important, too. Is this something that the city should be paying for, or should the team bear all of the costs for renovations?

Moderators (1)

Participants (4)

What do you think?

Anonymous
on 2017-08-21T04:34:47+00:00
Login or Register to contribute to this conversation

Recent Activity

Bill Speros
on Nov 24, 2013
"Thank you, Mr. Eberhard, for your thoughtful commentary.  I found your treatment of the..."
Bill Speros
on Nov 24, 2013
"Preexisting lease commitments.  Sunk costs.  Balloon payments. “[A]llowing the Browns..."
William Eberhard
on Nov 24, 2013
"In the past 25 years, cities around the country have had the public make massive investments in..."
Andrew Samtoy
on Nov 24, 2013
"How is keeping the stadium in the "top 50%" actually calculated?  "
Brian Cummins
on Nov 22, 2013
"My biggest concern today, as we head into the weekend, is that Cleveland City Council as a..."
Brian Cummins
on Nov 22, 2013
"Thanks to the Civic Commons for getting the conversation started.  We have three days before..."
Andrew Samtoy
on Nov 22, 2013
"Are renovations to Browns Stadium something the city should be paying for, or should the Browns..."

Andrew Samtoy

Andrew Samtoy - 2017-08-21T04:34:47+00:00 - "This week, Mayor Jackson, the Cleveland City Council and the Browns released details of a plan to..."

Continue Reading

Bill Speros
on Nov 24, 2013 - 4:53 pm

Preexisting lease commitments. 

Sunk costs. 

Balloon payments.

“[A]llowing the Browns more control…”

This additional $30 Million “bring(s) our total obligations to $82,500,000. And, people seem to forget...the City still owes some $134 million in principal and interest on the initial $202 million in municipal bonds”

They assert that this is such a “good deal” that it must immediately approved.

If it is such a good deal, why haven’t they described it in clear and comprehensive terms?  And why are they in such a rush?

If "sunlight is the best of disinfectants" shouldn't we have time to shine some light?

 
William Eberhard
on Nov 24, 2013 - 4:24 pm

<!--StartFragment-->In the past 25 years, cities around the country have had the public make massive investments in limited use facilities to make a very small group of rich white men even richer. And Cleveland has held its own in this dark contest. We the Public spent $300,000,000 of our money to tear down Municipal Stadium and build the new Browns Stadium. And what did cracker-jack attorney Jeff Appelbaum negotiate as the deal for the citizens? Rent of only $250,000 per year?????! If screwing the pooch were a crime, Appelbaum would be on Death Row! That $250k must be 10% of Appelbaum’s fee on the stadium deal. How much has he been paid since the inception of the Browns Stadium deal until today? Lop off the zeros and find me anyone that will build me a $300,000 house and let me live in it for only $22.50 per month! And all the while I get to live there for essentially nothing, that dumb landlord is going to put aside $850 per year to make sure everything is nice and neat and like new, all the while I pay only $22.50 per month! You must be kidding! The Browns gate on ticket prices alone (no food and beverage or merchandise) is over $5,000,000 per game. Browns’ gate receipts are reported to be approximately $50,000,000 per year and total revenue approximately $250,000,000 per year! That means the Browns rent costs them only 1% of their revenue!!!! That’s 85% less than the ratio between my income and my mortgage (to say nothing of my taxes)! NO ONE in the real world gets a deal like this! You want a bigger TV? Go buy it yourself! But don’t you dare ask the taxpayers for the money. Frank Jackson is a spineless tool. He can’t pave or plow the streets, and he has the audacity to say this won’t diminish services. What services? It really is insulting. The Browns are screwing the citizens of Cleveland every day! And now they want to upgrade? And we are supposed to contribute more?! Nonsense! Put it into the ticket prices so that the parties who benefit from the use of the facility are responsible. Or better yet, pay for it yourself and be thankful you have the ridiculous lease you have already! <!--EndFragment-->

 

Responses(1)

Bill Speros
on Nov 24, 2013

Thank you, Mr. Eberhard, for your thoughtful commentary.  I found your treatment of the proportions between costs and rents to be particularly interesting and pursuasive.

What I don't understand, however, is why you focus on the attorney who negotiated lease terms rather than focusing on the client--government entity(ies)--who agreed to the terms and may have instructed the attorney to formalize them.

 
Expand This Thread
Brian Cummins
on Nov 22, 2013 - 6:01 pm
Thanks to the Civic Commons for getting the conversation started.  We have three days before Cleveland City Council hears Ordinance #1578-13, to approve Cleveland Browns Proposed $120 million capital repairs and improvements to FirstEnergy Stadium and authorize a new obligation by the City of Cleveland of $30 million. First off, given the information I have, if voted on today, I would vote no. Although the underlying lease agreement between the City and the Browns is hugely, no grossly lopsided, we are nonetheless obligated under the law to abide by it.  Although I have some confidence in the Mayor's Administration in terms of the stated negotiations with the Browns, I've not received sufficient information to be confident this is the best deal we can get. NOTE: The Ordinance and Lease Agreement can be reviewed on my blog, here

Responses(2)

Brian Cummins
on Nov 22, 2013
My biggest concern today, as we head into the weekend, is that Cleveland City Council as a legislative body, will likely not take the time needed to conduct what I believe should be thorough due diligence.  Secondly, apart from due diligence on this specific legislation, there has not yet been proper due diligence and public discourse on the proposed (by the Mayor and Browns this week) renewal of the sin-tax. It is my believe that without a full review of the total future legal and other anticipated obligations for all three pro-sports facilities, there should be no agreement for any new obligations for additional payments for any of the facilities. Some initial questions: 
  1. What is the legal case for the City entering into agreement to take on these additional repairs and improvements?
  2. What is the urgency for this to be considered and passed under emergency ordinance?  I’ll be asking Monday to delay any such vote until after the new year.  To be asked to approve within less than two weeks from when the Brown’s proposed this, and only a week before a holiday is unacceptable given the fact that it represents an additional $30 million in obligations to the City’s General Fund and other changes to the current lease.
  3. What is the make of the Brown’s current and propose jumbotron scoreboard(s)?  The current is claimed to be only several years away from being obsolete or unable to obtain replacement parts?  This is related to the above question of urgency and for some form of confirmation of the actual cost of the new replacement board – stated by the Browns to be $20 million.
  4. Why would the City concede control and direction of any future increase in admission tax as is being proposed?  This in fact begins to tinker with the existing lease, which the Mayor’s Administration stated was not to occur.
  5. Has there been any consideration or financial models developed to explore other sources of revenues such as increasing the admittance tax, increasing the City’s income, food and beverage or other such taxes or fees?
  6. Why is the Mayor proposing to pay the $30 million new obligation from the General Fund as opposed to some other source more appropriate for capital investment, i.e., bond or other fees or taxes. The $2 million/per year for 15-year obligation is unprecedented and too onerous to place on future administrations and Councils.
 These are only the immediate questions and should help in getting the conversation started.  NOTE:  There has been some confusion as to what the deal actually represents as pertaining to the current obligations the City has and how this deal would change those obligations. The underlying lease and therefore this deal are very complicated.  Here is an attempt to explain the deal and its implications. The City would commit $30 million in the form of $2 million payments per year for 15 years.  Although both the Administration and Browns take pains to state the obligation is worth only $22 million, given the present value of the obligations, in fact, if paid annually, the City will be paying out $30 million.  The only way this could be spun as a $22 million dollar contribution and not $30 million is if it were paid today! This $30 million represents payment for: $20 million jumboTRON scoreboard (check out the Houston Texans’ new $16.5 million 277-foot-long video board); $5 million new sound system; and $5 million control room.  In addition, in our briefing earlier this week the following expenditures were also discussed: field lighting $3 million, ADA improvements $3 million, and painting/carpeting $7 million. Also, part of the deal is allowing the Browns more control of what and when $12 million is spent on capital repairs.  The City is proposing to give the Browns more control for spending earlier (beginning in 2016) $12 million.  This $12 million is part of approximately $24 million currently available from collections of the sin-tax. The confusion in some media reports and on-line blogs and comments sections is that the $2 million annual payments for 15-years ($30 million), would off-set future payments of capital repairs as detailed in the remaining payments listed above in what is called the Lease Agreement’s Schedule 14(f).  This is not correct.  The proposed contribution from the City of $30 million is in addition to the current $39,450,000 Capital Repairs that we are obligated to pay.  This will bring our total obligations to $82,500,000.   And, people seem to forget or not mention in these reports that the City still owes some $134 million in principal and interest on t he initial $202 million in municipal bonds that were issued to pay for the $330 million stadium. It is correct, that by giving more control over the proposed $12 million (so that it could be spent as early as 2016) would reduce the balloon payments that start in 2021. But, it is also true that by moving these payments up the City would forgo some $1 million in interest (this is the flip side of the future value of money argument). There is a lot more information and things that should be considered, not the least being how much are the obligations for debt and maintenance on all three pro-sports teams?  The obligations, both legal and anticipated that would need to be covered by a renewal of a sin-tax or to be covered by some other form of funding. In January, I began my research into this issue and the information developed is available on my blog at the following links:  I look forward to hearing other’s perspectives and opinions on these important issues, and what actions can be taken to increase public education and public discourse. Brian CumminsCleveland City Council, Ward 14 [See link for a copy of the Browns Stadium Lease Agreement and Ordinance #1578-13. 
Andrew Samtoy
on Nov 24, 2013

How is keeping the stadium in the "top 50%" actually calculated?  

 
Expand This Thread
Andrew Samtoy
From the Moderator: Andrew Samtoy
on Nov 22, 2013 - 4:10 pm

Are renovations to Browns Stadium something the city should be paying for, or should the Browns bear all of the costs?  Why?