(Cleveland) - Cavaliers announced today the cancellation of their participation in The Q Transformation Project of the publicly-owned Quicken Loans Arena, which the team claims would have: "
Significantly upgraded one of the oldest arenas in the NBA"Make it more competitive for the long term with other nearby midwestern cities and national venues to maintain and attract additional events"
Created over 2,500 project-related construction jobs"Grown The Q's permanent job base to 3,200"Increased tax revenue to the City's General Fund and neighborhoods "Extended the Cavaliers lease for The Q to 2034 "
Help maintain state and local taxes such as the $44 million in 2016 and potential growing tax revenue source to Cleveland through 2034"Rehabbed 40 gym courts and floors in the city of Cleveland's rec centers and all Cleveland Metropolitan School Districts high schools"
Brought an NBA All-Star Game to Cleveland in 2020 or 2021 along with its $100 million+ economic impact.
Construction on the $140 million publicly-owned facility project was to have started this past June, but had been delayed due to a prospective referendum being placed on the ballot by the Washington, DC-based Metro Industrial Areas Foundation represented locally by a group calling themselves the "Greater Cleveland Congregations" (GCC), Service Employees International Union District 1199 and the Cuyahoga County Progressive Caucus.
The Cavaliers contends, the prospective referendum will cause the groundbreaking of The Q Transformation to miss the current construction cycle, which pushes the overall price tag of the project higher due to rising construction costs.
In addition, the team claims a time sensitive financing package that included historically low interest rates would be negatively impacted by further delay due to a prospective referendum exposing the project to an expected higher interest rate environment.
The public friendly public/private partnership was to be funded with $70 million of private capital contributed by the Cavaliers organization and an additional $70 million in public funding was to be generated primarily by a portion of the existing Admission Tax of every ticket sold to every event at The Q from 2023-2034 and a portion of the existing Cuyahoga County Bed Tax which is paid predominantly by visitors from outside of the County, many of which are attending events at The Q, as well as other sources either directly generated or largely impacted by The Q.
The Cavaliers had also committed to covering any and all construction cost overruns on the project. In addition, the City's General Fund would have received matching funds equal to the revenue collected from the Admission Tax generated for use in The Q Transformation project.
The Cavaliers say there were no new or increased taxes related to this project.
The Q is the oldest arena in the NBA without a major structural renovation. The team believes, the renovation project would have extended the life of The Q to over 40 years when the average life of similar facilities is only 22 years in the NBA.
The Cavaliers claim the $140 million transformation investment is a fraction of the cost of a new arena, which today would cost between $500-$800 million.
Backers of the proposal maintain quicken Loans Arena and the Cavaliers have been a massive economic engine for downtown Cleveland and the entire region: "Generating over $2.7 billion in economic activity creating thousands of jobs"Producing nearly $500 million in state and local tax revenue"Contributed over $42 million in community, civic and charitable funding and support to local programs like the Greater Cleveland Habitat for Humanity, the Cleveland Food Bank, Shoes and Clothes for Kids, Cleveland Municipal School District and Boys & Girls Club of Cleveland among others".
The Cavaliers say they appreciate the strong leadership of Cuyahoga County Executive Armond Budish and Cleveland Mayor Frank Jackson, along with Cuyahoga County Council President Dan Brady and Cleveland City Council President Kevin Kelley.
Both the Cuyahoga County Council and Cleveland City Council overwhelmingly agreed with the project, by way of supermajority votes of support, understanding that there is a need to update the publicly-owned Quicken Loans Arena for the future benefit of the entire community.
United States Congresswoman Marcia Fudge has also been a major supporter. State Senator Sandra Williams has been a strong advocate as well.
(Photos by Ken Robinson/WTAM)
(c) 2018 by iHeartMedia, Inc.