Legislation has been drafted to insert into the state budget a $600 million package of bonds that would make up the state’s portion of funding for a $3.4 billion domed stadium and development in Brook Park for the Cleveland Browns.
The 18-page amendment obtained by the Statehouse News Bureau would insert the funding for a “transformational major sports facility mixed-use project district” into House Bill 96, the proposed two-year state budget now being heard in the House.
The proposal comes less than two weeks after the Haslam Sports Group presented a slideshow entitled “Brook Park Transformational Sports Mixed-Use Development District,” outlining its plans for a $2.4 billion domed stadium surrounded by “hotels, residential, restaurants and experiential retail.”
The legislation would authorize $600 million in state-backed bonds over 30 years “to pay costs of the Cleveland Browns major sports facility stadium project in the city of Brook Park.” It would also eliminate Gov. Mike DeWine’s proposed sports facilities fund, which would be funded by a doubling of the tax on sports gambling operators.
A page in the presentation from the Haslam Sports Group indicates the state’s debt service on that bond package would start at $13.6 million next year and grow to around $40 million by 2029, with the total paid back by the state at $998.8 million.
The amendment requires the Browns to deposit 5% of the total of the bond package in an escrow account. Ted Tywang of the Haslam Sports Group told the House Arts, Athletics and Tourism Committee that it will provide $38 million in up-front cash, and added, “this would be kind of the first time, as far as we know, that an upfront payment has been done.”
The amendment said that if state bonds proceeds are being used, “the amount of increased state tax revenues are projected to be in excess of the total debt service of the state bonds for their initial term.” The Haslam Sports Group has projected $2.935 billion in economic activity generated over 30 years, beginning with $31.9 million in 2026 and ballooning to $151.3 million in 2058. That would be $1.3 billion over what the state would pay for those bonds over 30 years.
There has been no analysis or verification of those projections publicly released by the Ohio Office of Budget and Management or the Legislative Service Commission.
Cleveland, Cuyahoga County both opposed to a bond plan
The Haslam Sports Group has promoted the plan as "an unprecedented $3.4B economic development project anchored by the State of Ohio's first dome stadium."
"This project will not only serve as a long-term stadium solution for the Cleveland Browns but also create a world-class destination for Ohio, hosting premier events and concerts along with Cleveland Browns games," said Tywang in testimony submitted to the Arts, Athletics and Tourism Committee. "The stadium will also serve as a catalyst for the adjacent mixed-use development, driving new economic and fiscal impacts that when combined with the year-round impacts of the dome stadium, allow the project to pay for itself and deliver a substantial return for the State of Ohio."
The revenue to the state to pay for the bonds would come from income, sales and commercial activity taxes. The last seven budgets have included cuts to the state income tax, and the two leading Republican candidates for governor, tech billionaire Vivek Ramaswamy and Attorney General Dave Yost, have both said they want Ohio to have no income tax.
Cuyahoga County Executive Chris Ronayne has expressed concerns about the Haslam Sports Group’s projections. He said in a news conference this week the group’s model showed average ticket prices would need to climb to nearly $800 a ticket over 30 years, and that every game and every single parking space would need to sell out. He notes an increase in the hotel tax rate and the addition of a $6 rental car fee would require changes in local and state law, and he said the estimates are overly optimistic.
"My fellow citizens, I say to you, that is risk that we should not bear," Ronayne said in that press conference.
Cleveland Mayor Justin Bibb blasted the domed stadium development proposal this week in a statement, which reads in part: “The Haslam scheme pays for itself on the backs of fans. The Haslams need to raise your taxes, make it more expensive for you to attend games, and steal events away from downtown Cleveland to pay for their stadium. The Haslam stadium ploy raises more questions than it answers and makes wild assumptions that will crush taxpayers. Their scheme relies on average ticket prices nearing $700, parking rates north of $100, increasing taxes for hotels, parking and rental cars, and the assumption thousands of people will pay high rent to live in luxury apartments in the shadow of the airport.”
The Cleveland Browns went 3-14 this past season, but all eight home games were sellouts.
DeWine wants his own proposal for sports facilities
DeWine hasn’t said directly he would veto a bond package plan for the Browns stadium, but has promoted his sports facilities fund, which this amendment would eliminate.
“I'm hoping that they're not going to do that. We got a long, long way to go, as you know. And I hope when people really think about this, what they're going to realize is that we can't really afford to continue to put money in sports stadiums out of a general fund,” DeWine said on Friday. “There's not enough money there. It competes with education. We're taking money away from kids. We're taking money away from mental health challenges that we face in the state of Ohio.”
It's unclear who is sponsoring the amendment. A public records request has been submitted for information about any draft legislation pertaining to the bond package and the Haslam Sports Group's tax revenue estimates.
The House is expected to release its version of the budget on April 1, with a full floor vote planned for April 9. House Finance Committee Chair Brian Stewart (R-Ashville) said via text: "We'll be making decisions on what's in and out up through 4/1."
READ MORE:
- DeWine concerned about Browns' $600M stadium state-backed bond plan: "That is a ton of money"
- Browns' owners lay out their ask for state help for stadium, but also bring an offer to the table
Possibility of state money for new Browns stadium leaves Ohio funding experts skeptical
