Cavs announce plans to renovate Quicken Loans Arena

Earlier today in downtown Cleveland, the Cleveland Cavaliers - in conjunction with the city of Cleveland and Cuyahoga country - announced plans for a renovation of Quicken Loans Arena. The plan, which comes with an announced cost of over $140 million, has the aim of helping the team land the All-Star game in 2020. The Q will remain open during construction.

According to announced plans, the Cavs and local government will split the cost of the bill with the Cavs kicking in $70 million and extending their lease until 2034. Cuyahoga County, which is $1 billion in debt, plans to sell bonds to raise $140 million for the project per cleveland.com. The debt will take until 2034 and ultimately cost a total of $234 million. With money also being set aside by the city and county for other sports stadium costs, the overall cost for the public is roughly $282 million. Cuyahoga County’s so called ‘sin tax’ - which is a tax on alcohol and tobacco and was renewed in 2014 to cover costs for all three major stadiums - can only be used on ‘major capital repairs’ like replacing the roof. The Q’s renovation plan does not qualify.

Additionally:

• Cleveland will pay more than $88 million, using tax on tickets to events at the Q from 2024 to 2034
• Over $44 million will come from the budget of Destination Cleveland
• The county will add $16 million from a reserve fund set up for convention center and Hilton Cleveland Downtown construction. Both of those projects are completed.
• The Cavs will pay about $122 million in rent payments, as the arena is not owned by th team
• An estimated $9 million will come from admissions to future playoff games
• An estimated $3 million will come from estimated food, merchandise and alcohol sales

The Cavs have created a standalone site - theqtransformation.com - detailing the plan, including sketches of possible designs. According to the site, the renovations will make the the Q a more modern arena that can compete with those in cities like Columbus and Pittsburgh. Among the proposed renovations are increased public areas for entry, a ‘welcoming civic space’ and more fan spaces. Overall, the arena will increase in size and be over 150,000 square feet in total size.

The Cavs say that they’ll pay for any costs over budget.

On the site, under a question titled ‘Why don’t the Cavs pay for the Transformation?’, the site says the following.

Quicken Loans Arena is a publicly-owned building. The Cavs are a tenant, but the building is used by many others. The Cavaliers have invested hundreds of millions of dollars in the facility over the years. Regarding public/private partnerships, the team has spent more, in fact, on The Q than any other NBA team has on their respective arena in comparably-sized markets.

Professional sports in the United States have always been a partnership between the teams and the communities they play in and are part of. Around the country, public investment in stadiums and arenas is the norm because the return on investment is evident. In Cleveland, that return on investment has been absolutely great.

The Cavs will pay for half the cost of the Transformation and will invest many millions more in the facility between now and 2034.

The public portion of funding will come from revenue streams that already exist and are generated or directly impacted by The Q.

Basically, the argument is that because they are not the sole tenant and there is a community stake in the arena, they should not have to take on the full cost. The site also notes that Cavs owner Dan Gilbert, who is worth a total of $5 billion according according to Forbes, has spent $50 million in renovations since becoming owner in 2005.