Protect the Publics Investment Cuyahoga County Council January 21, - - PowerPoint PPT Presentation
Protect the Publics Investment Cuyahoga County Council January 21, 2014 Presenters Joe Roman Greater Cleveland Partnership Tim Offtermatt Gateway Economic Development Corporation Ken Silliman City of Cleveland Professional Sports Teams This is
Protect the Public’s Investment
Cuyahoga County Council January 21, 2014
Presenters
Joe Roman Tim Offtermatt Ken Silliman
Gateway Economic Development Corporation City of Cleveland Professional Sports Teams Greater Cleveland Partnership
This is about so much more than scoreboards!
Why We Are Here
partnerships with Cleveland’s three teams
from these investments
protect these investments
Why This is Important
investments in their facilities / our community
place for nearly 25 years
Professional sports in the U.S. is a partnership between the teams on the fields and the communities that support them.
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November 1928 Municipal Stadium Bond Levy For 112,448 59.36% Against 76,975 40.64%
Renewed Commitment
May 8, 1990 November 7, 1995
198,390 51.72% For Against 185,209 48.28% For Against 256,278 72.31% 98,113 27.68%
Small Tax on Alcohol and Tobacco Products
Per Glass of Wine Per Bottle of Beer Per Pack of Cigarettes
$0.045 $0.160 $0.320 $0.300 $2.560 $0.760 $1.390 $1.690 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cigarettes Beer Wine Liquor
Excise Taxes Paid in Cuyahoga County
Sports Facilities v. Other Excise Taxes
Amounts* and Percentages
Cuyahoga Sports Facilities Other Excise Taxes
*P/ pack, gallon of beer or wine, 1/10 gallon of liquor.
$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Excise Tax Analysis
Cigarette Alcohol Beer Wine/Mix Bev
Cigarette Alcohol Beer Wine/Mix Bev Total Total $103,952,679 $113,491,077 $109,056,681 $23,593,125 $350,093,557
VIDEO SLIDE
Impact
792,391 837,883 839,074 820,439 843,042 824,595 525,577 663,882 1,997,995 2,275,916 2,169,760 1,776,904 1,394,812 1,840,835 1,603,596 1,572,926 578,672 584,006 582,230 551,110 528,933 526,874 533,058 569,939 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 2006 2007 2008 2009 2010 2011 2012 2013
Annual Ticketed Game Attendance
2006‐2013
Browns Indians Cavs
Return on the Public’s Investment
Nearly two decades of benefits
Public Amenity
Visitor Attraction Economic Activity Jobs
More than 300 events per year 75+ million visitors since 1994 >4 million visitors per year, more than half from outside Cuyahoga County $4 billion in almost 20 years Thousands of jobs (full‐time, part‐time, construction)
Government Revenue
Development Regional Image
$900 million in local and state taxes >$1.6 million in property taxes in 2014 In Gateway District alone, five hotels with nearly 1,000 rooms, four more hotels on the way, fifteen residential buildings and >60 restaurants/eateries A major league city in a world‐class region United Hub World Class Cultural Institutions
Return on the Public’s Investment
Nearly two decades of benefits
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Protecting the Public’s Investment Protecting the Public’s Investment
Tim Offtermatt, Gateway Economic Development Corporation
January 21, 2014
$0.05 $0.16 $0.32 $0.32 $3.00 $0.03 $0.09 $0.19 $0.19 $1.73 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 Per pack of cigarettes Per gallon of beer Per gallon of wine Per gallon of mixed beverages Per gallon of spirituous liquor
Cuyahoga County Excise Tax
As Passed and Adjusted for Inflation
As Passed Adjusted for Inflation
An Excise Tax is a tax on purchased goods and is not a percentage tax. as a result, the value
Uses of Excise Tax Uses of Excise Tax
Restricted to:
public plazas and their infrastructure
Browns lease
2005-2015 levy is available to the County for us for professional sports facilities
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Gateway Economic Development Gateway Economic Development Corporation Corporation
behalf of City and County
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Leases with Leases with Indians and Indians and Cavaliers Cavaliers
Original lease agreements: 1991
accumulated large payable amounts to teams
Leases Amended in 2004 2004
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Gat Gateway no y now has tw w has two of the
more public-sect more public-sector friendly r friendly lease agreements in lease agreements in major league pr major league prof
essional sports. ts.
Under the Current Lease Agreements Under the Current Lease Agreements
All Gateway costs related to property taxes, site maintenance and security are funded by team rental maintenance and security are funded by team rental payments. payments.
Teams are obligated to fund all operating costs of the
two facilities two facilities
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Original and Amended Original and Amended Lease Comparison Lease Comparison
Maintenance and Repair Maintenance and Repair
Gateway: the public’s steward in maintaining the maintaining the quality of the Gateway facilities quality of the Gateway facilities
Teams are responsible for any single individual capital repair costing <$500,000/$525,000 repair costing <$500,000/$525,000
Gateway is obligated to fund major capital repairs above $500,000/$525,00. above $500,000/$525,00.
design, with some adjustment for modernization/competitiveness.
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No tax re No tax revenue has been used nue has been used to fund Gat fund Gateway capital repair y capital repairs s since initial construction. since initial construction.
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The Indians and Ca The Indians and Cavalier liers ha have funded nearly $50 million in capital funded nearly $50 million in capital repair repairs since 2004. s since 2004.
Need Need for Major Capital Repairs for Major Capital Repairs
Facilities are 20-years old and 20-years old and have hosted 75 have hosted 75 million visitors million visitors
Anticipate requests for major capital repairs: capital repairs:
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Air handling units Steel shoring and painting Sanitary and storm water facilities Roof and sub-roof repair and replacement Chilled water equipment Sound system Concrete repair, replacement, or sealing Water pumps Vertical transportation Ice floor and chillers Building security and automation systems Energy management systems
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Requests due on or before July 1 of the year prior to repair, unless emergency Must submit an “Annual Team Report” that includes repair costs, maintenance records and a five-year plan of Major Capital Repairs. Gateway must prepare analyses of the Annual Team Reports by August 31. Gateway Board then makes recommendations to the County and the City by October 1
Gat Gateway Major Capital R y Major Capital Repair pairs s Process Process
Approved by Gateway’s Board on June 13, 2012
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Construction costs of maintaining Construction costs of maintaining facilities has doubled since 1993 facilities has doubled since 1993
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Other than rent receiv Other than rent received fr ed from
teams t ams to fund other activities, fund other activities, Gat Gateway has NO REVENUE t y has NO REVENUE to fund fund major capital repair major capital repairs
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Ex Excise T cise Tax has w x has work rked ef ed effectiv ctively ely for nearly 25 y r nearly 25 year ars t s to fund fund construction.
Now re w revenue is nue is needed t needed to maintain int maintain integrity of the grity of the public’s in public’s investment stment
Extending the Sin Tax
January 21, 2014
Overview
Established in 1901, the Indians organization has been a long‐time contributor to the economy and community of NE Ohio. The Indians endorse the proposed extension of the Sin Tax based on the following:
repairs and expenses.
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Indians Guiding Commitments
Baseball: Win the World Series Fans: Make Fans the Focus of Our Actions Ballpark: Preserve and Enhance Progressive Field Community: Positively Impact Our Community
The Indians strategic planning process identified what we want to accomplish as an organization which are our four Guiding Commitments centered around baseball, community fans and ballpark
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Economic Impact from Progressive Field
and Cypress Research Group covering the 19 year period from 1994‐2012.
including fan spending and employee wages.
travel, accommodations, amusement and retail spending by fans.
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Economic Impact from Progressive Field
dramatic as well. (34 post season games have been played in Cleveland from 1995‐2012 translating into roughly $61 million in sales, $5.6 million in taxes and $26 million in new earnings for the City.)
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Economic Activity from Progressive Field
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AND CREATING OPPORTUNITIES FOR WORKERS WHO:
Serve and prepare food Work in hotels and motels Drive trucks, buses and cabs Work in back office and support functions Work as clerks in retail
CREATING JOBS IN INDUSTRIES SUCH AS:
Accommodations and Food Services Transportation Arts and Entertainment Back Offices Retail Trade
THE IMPACT OF 100,000 TYPICAL FANS VISITING PROGRESSIVE FIELD
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Additional jobs$1,735,690
Additional taxable earnings$290,731
Additional state/local taxes
$4,112,000
Additional sales in the city
The impacts above assume that 83% of the visiting fans are from outside of the City of Cleveland and 51% of visiting fans are from outside Cuyahoga County.
Other Impacts
programs annually.
during the height of a season (61% from Districts 1‐11).
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Our Investment at Progressive Field
maintenance and capital improvements, broken out as follows:
$24M
(These expenses will continue to be incurred by the Indians to preserve Progressive Field.)
$23M
(Includes suite renovations, Collection Auto Club, Heritage Park)
$16M
TOTAL
$63M
Progressive Field.
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Team/Gateway Partnership
major capital repairs in excess of $500,000 ($525,000 currently with CPI factor.)
several years, have attempted to objectively assess future major capital repair needs.
requests for major capital repairs.
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Projected Preliminary Estimated Major Capital Repair List & Range of Costs
lighting systems
concrete
Main, Mezzanine, and Upper concourses
including displays and control equipment
areas
backs
elevators & escalators
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10-Year Major Capital Repair, Replace, & Restore (2014-2023) projected preliminary estimated range of costs: $60,000,000-$70,000,000
Conclusion
Established in 1901, the Indians organization has been a long‐time contributor to the economy and community of NE Ohio. The Indians endorse the proposed extension of the Sin Tax based on the following:
improvements.
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