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Monday, July 15, 2019

Cuyahoga County Girds Loins for Indians Lease Negotiations, Prepares to Raise Bed Tax

Posted By on Mon, Jul 15, 2019 at 3:05 PM

  • Sam Allard / Scene
Cuyahoga County is poised to raise its hotel bed tax by one percent in the coming weeks. That means that reserving a hotel room in the city of Cleveland would entail paying a 17.5-percent tax, one of the highest rates in the country.

Cuyahoga County Council heard from a budget adviser in a hearing on the subject last week. He advised that raising the county's portion of the tax from 5.5 percent to 6.5 percent (the maximum allowed by the state of Ohio) would generate an additional $4.6 million per year. Those funds would be necessary, he said, for upcoming lease negotiations with the Cleveland Indians.

On the heels of the massive public contribution to the Quicken Loans Arena (now Rocket Mortgage Fieldhouse) renovation, Cleveland's other pro sports teams are high-tailing it toward the taxpayer trough, a predictable outcome of the reckless and short-sighted Q Deal.

While council members like Sunny Simon questioned the value of spending so much money on sports facilities year after year, and worried about the lack of specific allocations in the "sports reserve fund" where new revenue would be stored alongside some of the Q Deal public funds, the hike is unlikely to generate any serious opposition.

David Gilbert, Destination Cleveland's top man, told the Plain Dealer that the one percent increase would have "virtually no effect" on Cleveland's competitiveness in the hotel market, especially because the city's base rates were comparatively low.

Gilbert has reason to support the hike. Of the projected $4.6 million annual take, 60 percent would go toward the sports reserve fund, which would ultimately be used for the costly repairs and upgrades the Indians can be counted upon to demand as part of a lease extension. But 40 percent would go toward hosting the Rock Hall induction ceremony every other year. That's currently funded by Destination Cleveland.

(Destination Cleveland is itself funded by existing revenue from the hotel bed tax, but their budget was cut into as part of the Q Deal. The tourism bureau was forced to shell out $44 million from 2017-2034 to help pay for the arena project. Gilbert told the PD that revenue from the new proposed hike that will go toward Rock Hall festivities would "almost replace" those dollars.)

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