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Friday, August 7, 2020

Dan Gilbert's Fortune Explodes to $34 Billion, Impoverished Region Still Paying for Arena Upgrades

Posted By on Fri, Aug 7, 2020 at 8:30 AM

click to enlarge FLICKRCC/TECHCRUNCH
  • FlickrCC/TechCrunch
Dan Gilbert's personal fortune ballooned to roughly $34 billion Thursday, after his mortgage empire was put on the New York Stock Exchange. Gilbert owns fully 73 percent of the Rocket Cos. under which Quicken Loans is housed, and after his bountiul initial public offering, he is now the 28th-wealthiest person on Planet Earth.

Revelations of Gilbert's expansive wealth — the dollar amount of which is at least four times larger than previous Bloomberg estimates — may come as a shock for Clevelanders, who no doubt recall that the region has been saddled with debt on renovations to the RocketMortgage Fieldhouse until 2034.



Why would Cuyahoga County willingly downgrade its bond rating to appease Gilbert by subsidizing these renovations when it's already overburdened with staggering debt on other ill-conceived mega-projects? Why would elected leaders agree to to fork over millions of dollars every year for new upgrades when the public already pays for all major capital repairs at the arena via the Sin Tax, which was created specifically for that purpose?

Why would leaders agree to such an odious arrangement when half of the city of Cleveland's children live in poverty and when nearly half of the city's families are without home internet access? How could these leaders rationalize additional public subsidies when virtually every public and quasi-public agency is begging for new or enhanced taxes to pay for essential services? Why would they agree to such wildly imbalanced terms? How on earth could they justify funding the discretionary spending of one of the world's richest men, and assuming the project's total debt on his behalf?
 
It boggles the mind.

Yet Cleveland Mayor Frank Jackson, City Council President Kevin Kelley and Cuyahoga County Executive Armond Budish all bent over backwards to celebrate the merits of the deal, praising it in terms embarrassing to revisit. But Jackson, Kelley and Budish went a step further. When the public refused to believe their propaganda, these top elected leaders ensured that the public's voice would not be heard, blocking a referendum effort, stalling it in the courts, and ultimately pressuring the opposition's leaders to withdraw the petitions with a key assist from Congresswoman Marcia Fudge. 

Months later, many of these same leaders were scratching their heads over Cleveland's abysmal performance on national economic rankings.

Now, as both the city and the county brace for economic crises spawned by the Coronavirus pandemic, (including a lawsuit that poses an existential threat to the city's income tax base), Dan Gilbert gets to sit back and watch his personal fortunes soar, thanks in part to unprecedentedly low interest rates. Yahoo Finance reported that Quicken Loans alone netted profits of more than $890 million in 2019.

Surely it's no coincidence that the political campaigns of Jackson, Kelley and Budish are all generously supported by Dan Gilbert and his various Rocket Cos. and Bedrock Detroit associates.

After the Larry Householder scandal, in which FirstEnergy orchestrated a vast racketeering scheme to prop up elected leaders and secure a bailout of its nuclear assets, one should recognize the influence of money in politics locally. The Q Deal was a version of the same criminality, whether or not that influence was technically illegal.

One the world's richest human beings and his paid underlings successfully managed to dupe elected leaders into believing (or at least passionately repeating) a few boilerplate talking points about the economic vitality of downtown and the value of temporary construction jobs. The elected leaders, with campaign contributions either in hand or forthcoming, were pleased as punch to mortgage the future of their constituents.

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