City of Cleveland reaches deal with Browns on funding of stadium renovations
John Kosich, newsnet5.com
9:38 PM, Nov 19, 2013
CLEVELAND - When the Cleveland Browns announced $120 million in stadium upgrades last week, including state of the art 3D scoreboards three times the size the present models, the reaction was positive followed by the question, who is paying for it?
The Browns promised those answers would come shortly. On Tuesday, they did.
Under an agreement reached with Cleveland Mayor Frank Jackson, the Browns will put up the money now, half theirs - half borrowed from the NFL, with the city to contribute $2 million a year for the next 15 years to offset the cost.
While that equals $30 million because it is paid out over 15 years, the city said it will actually represent a $22 million commitment in today's dollars.
"By us putting all the money up front, the city avoids having to issue any kind of bonds which come with a lot of legal fees, a lot of placement fees, a lot of other things that they won't have to cover," said Browns President Joe Banner.
"The contribution that the city's making, $2 million per year, I think the city would describe as moderately below what its lease obligations are. We would describe as significantly below," said Banner.
"We actually view this deal as a significant savings to this city vs. the status quo or not making a deal."
The money though will come from the city's general fund, which some members of council took issue with Tuesday.
"That is the fund that we pay for police. That is the fund that we sweep streets and for the mayor to say it's not going to have any impact on the neighborhood it's just not realistic,' said Councilman Jeff Johnson.
But Mayor Jackson insisted he would never have entered into this deal if he thought it would.
"It is $2 million a year that is not needed to provide the level of service that we're providing today," said Jackson.
"If I felt that we would have put anything in regards to city services or capital outlay in jeopardy we would not have an agreement here," he said.
The $2 million represents just .37 percent of the city's $538.9 million annual budget, or 37 cents on $100.
The bottom line city leaders pointed out was the fact that the city owns the stadium and it's in their interest to protect their investment.
"We want a stadium at the end of this lease that is in good shape that does not need huge capital repairs," said Mayor Jackson.
In addition, with $24 million remaining in the existing sin tax fund for future repairs, the agreement gives the Browns the right to provide input on how $12 million of that money will be spent on infrastructure improvements starting in 2016.