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Cleveland Cavaliers lack necessary sin tax funds to upgrade Rocket Mortgage FieldHouse, Gateway says

The Cavs are asking Gateway for $28 million to pay for two major capital projects. However, Gateway says only $10 million in sin tax funds remain.

CLEVELAND — As stadium renovations continue to be a big political topic in Cleveland and Cuyahoga County, one of the area's three professional sports franchises says it is in need of funds to refurbish its home. 

During a meeting of the Gateway Economic Development Corporation on Wednesday, the Cleveland Cavaliers made a formal request for $28 million in funds for two "major capital repairs" at Rocket Mortgage FieldHouse. 

Gateway owns both Progressive Field and Rocket Mortgage FieldHouse, leasing the facilities to the Cleveland Guardians and Cleveland Cavaliers, respectively. Voters in Cuyahoga County approved a sin tax on cigarettes and alcohol to pay for the construction of the two venues in 1990. In 2014, the sin tax was renewed by voters for an additional 20 years to pay for capital improvements at Rocket Mortgage FieldHouse, Progressive Field, and Cleveland Browns Stadium. The sin tax generates between $13 to $14 million a year, meaning each team receives around $92 million for repairs over the course of the 20 years.

In a letter, the Cavs informed Gateway that they need $9.8 million to replace the arena's elevators and escalators, plus an additional $18.4 million to update the broadcast control room. "As you know, the terms of our lease stipulate that Gateway is responsible, at its sole cost and expense, for all Major Capital Repairs to RMFH (Rocket Mortgage FieldHouse), defined as repairs of over $500,000," wrote Antony Bonavita, Cleveland Cavaliers/Rocket Mortgage FieldHouse Executive Vice President of Venue Operations, to Gateway Executive Director Todd Greathouse. 

But per reporting from Signal Cleveland's Nick Castele, Gateway officials told the Cavaliers that the team has only $10 million left of its sin tax revenues to pay for the repairs. 

The issue will be revisited at Gateway's next board meeting in August.

The facilities now known as Rocket Mortgage FieldHouse and Progressive Field both opened in 1994 as Jacobs Field and Gund Arena. In 2019, the Cavs, the city of Cleveland, and Cuyahoga County completed a $185 million renovation of the arena. 

Progressive Field is set to undergo two years of major renovations that will begin after this season. The renovations come after the Guardians agreed to a 15-year lease extension with the city of Cleveland in a public-private partnership that will generate $435 million in funds over the next 15 years. Of that money, $202 million is expected to be spent on significant renovations for the ballpark.

The city of Cleveland and Cuyahoga County collectively will contribute $17 million annually, the state of Ohio will contribute $2 million annually and the Guardians will contribute $10 million annually for measures including "fan friendly and baseball/front office operations improvements and necessary funding for capital repairs, maintenance, Gateway operations, and property taxes."

Meanwhile, the future of Cleveland Browns Stadium, which first opened in 1999, has also been addressed by both Cleveland Mayor Justin Bibb as well as Browns owners Dee and Jimmy Haslam in recent weeks.

"Cleveland would benefit tremendously from the development of the waterfront," Jimmy Haslam told reporters during March's NFL Owners Meetings. "Having the stadium down there seems to be in everybody's best interest. So we're committed to redoing the stadium. In all likelihood, it's not going to have a dome, but it'll be a substantial remodel of the existing facility and we're probably 3, 4, 5 years away from that happening."

In his State of the City address last month, Bibb was asked if he supported a renovation of the existing stadium or the construction of a new stadium. He was also asked if the city planned to contribute any money toward a stadium project.

"My vision right now is making sure we finally see real inclusive development on the lakefront. While we begin early conversations with the Haslams about the stadium, we want to be creative with how we address this issue because I'm no longer going to risk general revenue fund dollars for maintenance of a privately-owned football franchise," Bibb stated. 

"We've got to be creative. We've got to think differently about financing. And we have to think differently about how this fits into a larger piece of making us have one of the best lakefronts in the world. That's my vision to get done as mayor."

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