Heated Deliberations Begin for the Q Renovation Plan

County Executive Armond Budish has seldom appeared more exercised than he did yesterday, when he addressed Cuyahoga County Council about the proposed Quicken Loans Arena renovation plan.

After more than 30 public comments, passionately delineating familiar notes of opposition and support, Budish took to the podium to present a doomsday scenario in which the county was all but guaranteed to lose the Cavaliers’ franchise and the arena itself if council did not authorize the deal.

For background: The so-called Q Transformation has an advertised all-in price of $140 million, and has been billed — and continues to be billed, by Budish and Cleveland.com — as an even split between the Cavs and the public. But as has been reported extensively, the total cost of the project, after interest and the creation of a rainy day fund, will be ~$282 million, of which the public will pay an estimated $160 million.

The largest share of those funds (~$88 million) will be borne by the city, via an admissions tax on ticketed events at the Q from 2024-2034. The reason why it won’t be activated until 2024 is because until 2023, this portion of the admissions tax will be used to pay off existing Gateway bonds — from the nineties.

But the county, as the public author of the deal — it is the entity taking out the bonds — is the first to deliberate on the controversial issue in a public forum. The county’s financial contribution will be $16 million from a pot of unused dollars intended for the convention center and Cleveland Hilton Downtown hotel. Though the Cavs and their elected shills have repeated that no new taxes will be created and that the city’s and county’s general funds will not be affected, councilman Jack Schron said yesterday that the $16 million from the convention reserve really ought to be seen as general fund dollars.

It’s no secret that this issue has sparked wide and heated debate. The Cavaliers — and their pals from the Greater Cleveland Partnership, to say nothing of their muscle from the construction trades — are explicitly seizing on the momentum generated by the Cavaliers’ championship. They argue that Cleveland is hot right now, and the region can ill afford to take its foot off the gas pedal. The Cavs have said that this is an investment in the future, in Cleveland’s (that is, the Q’s) ability to stay competitive, “not this year, or next year, but in the short-term years ahead.”

Meanwhile, the opposition, led by Greater Cleveland Congregations, contend that the gap between the haves and have-nots is only widening in Cleveland. They can’t make sense of the public’s continual investment in projects for which they see so little direct return. (More on this shortly.) Far from opposing the Cavs, or even the renovation itself, the GCC has proposed a dollar-for-dollar match in a community equity fund, to support things that the region’s communities actually need: mental health crisis centers, workforce development and training, capital projects in distressed neighborhoods.

But back to Budish:

He may as well have been wearing shackles and a spiked leather collar as he wailed in the direction of council a message harvested from auto commercials — the Q is an economic engine, motor (and presumably its chassis and foot-activated liftgate to boot). WE ARE HAPPY PARTNERS, Budish squealed (Writer’s note: This is paraphrasing subtext), AND AS SUCH WE MUST DO EVERYTHING THE CAVS SAY! In fact, his plea began on a nuptial note. He was presenting the plan, to council, he said:

“Because I know you share my unwavering commitment to all the residents of Cuyahoga County to create the economic environment necessary to support and sustain all of us in good times and in bad, for today and tomorrow.”

For the Orwell scholars in the audience, it was almost second nature to substitute “Cavaliers” and “corporate power” whenever Budish uttered “all of us” or “all of Cuyahoga County.”

But Budish’s strenuous ask was premised on two ideas, he said. The first was that the Q was a “critical economic and jobs generator for our entire region.” Budish said that the Q employed 2,300 people who “live in our neighborhoods and shop in our grocery stores.” (In fact, as the Cavs’ Len Komoroski stated in his presentation later, only 75 percent of the Q’s employees live in Cuyahoga County, to say nothing of Cleveland.) Budish pimped the promised NBA All-Star week as a coveted event that brings “money and notoriety” to the host city.

The second premise — a craven one indeed — is that we “stand a very good chance of losing the Cavs and the Q and these jobs at the end of the Cavs’ lease if we don’t make this deal now. I’m not being an alarmist — this is the reality,” Budish, as willing hostage, declared. He cited the Cavs’ own talking points about the average lifespan of NBA stadiums and market conditions over which he apologized he had no control. Budish had not one iota of doubt, though, he said, that at the end of the Cavs’ current lease, they would demand a new arena (in the $600 million – $1 billion range) and would jump ship if they didn’t get it. It was here the County Executive began to tremble.

“There is no way we could come up with $1 billion without a huge tax increase,” he said. “If the Cavs leave, we’re likely also to lose the Q. That’s because we can’t maintain the Q without an anchor tenant…. To me, the key is the seven-year lease extension. We lock our championship Cavaliers into Cleveland for an additional seven years from 2027 to 2034. This enables us to extend the useful life of the Q to 40 years, which is unprecedented!”

Budish invited council to “look no further than the Browns and their move to Baltimore” as a likely outcome if the county did not submit. “Teams will move, especially out of a mid-market cities,” Budish said. “And by the way, Baltimore’s stadium was paid for almost entirely by public funds.”

Returning to the bogus $70-million figure, Budish said that the cost of keeping the Cavaliers for seven additional years would be a mere $10 million per year. Compared to a theoretical $800-million brand-new stadium with a theoretical life of 20 years, it should be a no-brainer. Right?

“Ten million a year versus $40 million a year?” Budish said. “That’s a good deal for the Public.”

Woof.

FURTHER NOTES AND BAFFLEMENTS:

• The County Chambers, as at last week’s meeting, were filled to bursting. If, as Council President Dan Brady remarked, last week’s meeting was the most highly attended in council’s six-year history, Tuesday’s set the record yet again.

• The folks from GCC arrived shortly after 1 p.m. and the room was already filled. GCC’s suspicion was that the tradesmen and the Q folks intentionally packed the room very early so that the opponents wouldn’t be allowed in. This proved to be effective.

• Most of the yellow-shirted GCC crowd were confined to the area outside chambers, where they could be heard applauding intermittently throughout the proceedings. In fact, during public comment, they hosted a mini press conference of their own, at which Rev. Jawanza Colvin quoted Gandhi — “First they ignore you, then they laugh at you, then they fight you, then you win” — the Second Book of Kings and his own remarks to rev up the GCC crowd. In public comment, he’d told the Cavs that though they might “win the money,” they would “lose their moral standing in the community.”

• The meeting was four God-forsaken hours long. After Public comment, when Budish, the Cavs’ Len Komoroski, attorney Fred Nance, and finance guy Tim Oftermatt made presentations, council was permitted to ask a few questions. The presentations were in many ways carbon copies of those made at the initial Q Transformation press conference, but was of course the first official presentation to council.

• Jack Schron was the only councilperson grilling presenters on specifics, and council President Dan Brady seemed annoyed every time Schron raised his finger. Brady kept saying that council would be seeing a lot more of Komoroski, but good on Schron for clarifying a few things:

• Schron asked Komoroski, for instance, to explain whether or not he thought his being on the Destination Cleveland board of directors represented a conflict of interest, given that $44 million from the Destination Cleveland budget, generated by the county bed tax, was proposed as part of the renovation budget. Komoroski answered in a non-answer, singing the praises of Destination Cleveland and rhapsodizing on the inherent goodness of Cleveland tourism.

• Schron also noted that one of the Q’s most significant upgrades was an increase in floor space, from about 90,000 square feet to more than 150,000. All this open space — the vast new atrium, notably — was described by Komoroski as an industry standard, but it gave Schron pause. All that space makes the Q a much more attractive venue for private events. Komoroski confirmed that the Q would indeed be seeking and hosting many events in the space, both public and private. Schron, then, asked why it made sense for the county to contribute $16 million to fund a competitor that would directly undercut the business of the Convention Center and the Global Center, also funded by taxpayers and already struggling. Komoroski said the Q would be aiming for different, unique events.

• Councilman Dale Miller asked about seating capacity. After the proposed renovations, seating at the Q would be reduced from its current capacity of 20,562 to approximately 19,700, which Komoroski said was in line with league trends.

• Komoroski’s whole presentation was a celebration of the extreme, in fact peerless, public-friendliness of the proposed deal. Komoroski’s contention was that the current Cavs’ lease was already unprecedentedly publicly friendly and that this new deal’s public friendliness, over and above that lease, should be interpreted exponentially. Dan Gilbert was here conveyed as God’s gift to blighted neighborhoods and struggling communities, a man who, by his very nature and principled corporate citizenship, wants to “do well by doing good.”

• One of Komoroski’s confounding contradictions was a remarkable statistic about Q attendance. For Cavs’ games, 70 percent of attendees don’t live in Cuyahoga County. Ninety percent don’t live in Cleveland. For other Q events — concerts and the like — those numbers go up. Seventy-four percent don’t live in Cuyahoga County and 95 percent don’t live in Cleveland.
  
  
• WHAT?!?!?!!??!?!?!? The line of argument from the Cavs is that this makes the deal even more attractive for locals because outsiders are footing the bill — all these folks from Summit, Lorain, Medina, and Lake Counties, or yet further afield, driving in to see LeBron or Paul McCartney. They pulled a similar line during the Keep Cleveland Strong Sin Tax Campaign.

• But it COMPLETELY INVALIDATES the entire premise of the “Cleveland living room” metaphor and the lovey-dovey familial rhetoric therefrom, not to mention all the feel-good stuff about how the PUBLIC owns the Q. The natural rejoinder is: For God’s sake, to what end? Is it any wonder that actual Cleveland residents look upon this deal not only with skepticism but with outrage? Isn’t it obvious that this facility is not for them?

• And yet here is the region’s media powerhouse, Cleveland.com, gushing over the merits of the deal in an editorial this weekend wholeheartedly endorsing it.

• “How many of the region’s children have been wowed there by Mickey Mouse on ice skates, circuses and monster truck shows?” The editorial board invited us to consider. “How many people have danced in the aisles to the performances of Bruce Springsteen, Paul McCartney, Jay Z, Taylor Swift, Justin Timberlake, Beyonce?”

• The answer, by the Cavs’ own statistical estimation, is not many. (At least for the events described above, only five percent of the attendees were Clevelanders.)
  
• Lord help me.

• Attorney Fred Nance, echoing Budish, spoke of market realities and the fact that Cleveland was “punching above its weight class.” We are the smallest city in the United States with a professional baseball, basketball and football team, he said, and then launched into his personal experiences with Art Modell; among them the utter surprise he felt as he watched the press conference when Modell announced his intent to move the franchise to Baltimore.

• Final note and theme: For observers like Scene, one of the most challenging elements of this debate to countenance in good faith is the fervid support for the deal by the construction trades. Outside the tradespeople, virtually every public commenter in support of the deal was a CEO, a downtown nonprofit executive, a suburban Mayor, or — oddly enough — a chef.

• And one observer noted that the culinary crowd that spoke in support of the deal all had restaurants at the Q, or had participated in Q events. In fact, one of the most dissonant moments in Tuesday’s public comments came when Chef Jonathon Sawyer addressed council. He said that while he sympathized with GCC’s concern for things like the opioid epidemic, violence, infant mortality and unemployment, “to conflate them with what we want to do [the Q Transformation] is folly.” He said the vibrancy of Cleveland’s urban core was proof of the economic success of the Q. Like others, including Cleveland.com, he was guilty of conflating things himself — in this instance, the Q itself with the costly renovation. At any rate, he encouraged all those who shared the GCC’s passion to “go see Portman on the 23rd, go see Fudge on the 25th, or go see Joyce on the 25th, who won’t show, or go see Renacci on the 25th, who won’t even hold a meeting — if you go and express these same concerns with the same passion and vigor, you’re going to help move this city forward.” Excellent advice, to be sure. Those folks might also consider writing a letter to President Donald Trump, or phoning the office of Secretary of Housing and Urban Development Ben Carson, but are they honestly to believe that those actions will have any more meaningful of an impact than appealing directly to their local representatives with a decision to make? With something tangible on the line? What a dodge, dude.

•  But the unions, yes: Rev. Jawanza Colvin noted how “disturbed” he was by the divisions being created in Cleveland, not only the imprecise framing of the debate as “Cavs vs. GCC” but, more distressingly, as “Labor vs. Churches.”

• “There’s a great history of the church and labor working together,” Colvin said. “Many of us fought for SB5 on the hills of the state capitol. We took over the rotunda with labor… Our issue is not with labor. Labor showed the way, that if you fight for it, you can get it.” And yet, second only to the Cavs themselves, the construction unions have been the most vocal supporters of the deal. It’s worth noting that the public contributions to the renovation do mean that the Cavs will be obliged to honor the city’s and county’s community benefits agreements for local and minority hiring. That is good. And perhaps it’s been communicated to the unions that without the public support — without the “partnership,” in the corporate patois — there will be no renovation at all, and therefore no jobs. So maybe the tradespeople do feel that much is at stake. But to see these guys in their hoodies and ballcaps and actual hard hats going to bat for the regional corporate megaliths is unnerving in the extreme. The perimeter of council chambers was jammed with them. When Scene tried to speak to a member of the local pipe fitters union — Who are you? What’s your take on all this? — He was sshhhed by what appeared to be his union boss, and would say nothing.  

• Young professional employees of either the Q or Quicken Loans were overheard exiting the meeting, bitching about its length and what sounded like their mandatory attendance. One admitted she preferred the public comment to the official presentations, purely from an entertainment perspective (an assessment with which we agree) and was delighted that execs from organizations like the YMCA and the Boys and Girls Club spoke “on our side,” in favor of the deal. But she was surprised, she said, to hear about “that infant mortality.”

This article appears in Feb 22-28, 2017.