ROLDO: The Scams They Devise to Screw the Taxpayer

By Roldo Bartimole

One of the first moves made by Jimmy “Cheat them if we can” Haslam when he took over the Cleveland Browns was to pick up $100 million in a naming rights for the Browns stadium — owned, by the way, by the City of Cleveland.

But Haslam grabbed the loot.

But what the hell, the city of Cleveland and its mayor “It is what it is” and its city council “too busy being obnoxious” doesn’t seem to care.

Is there a single politician in town with some scruples?

Back in the 1990s the naming rights to the baseball stadium and the arena built primarily with public dollars went to the Gateway Economic Development Corp., the operator set up by the County and City to operate the sports facilities.

But that changed.

Haslam took the $100 million.

Lagging Larry Dolan takes the $58 million (16 year contract) for the naming rights from First Energy Corp. for the baseball stadium.

Dan Gilbert takes the full naming rights for the arena – Quicken Loans. He doesn’t disclose how much. What the hell, he owns Quicken Loans so whatever he pays, he pays to himself. It could be $10 million or $100 million. It’s just one pocket out, one pocket in.

The Gunds, George and Gordon, who owned the Cavaliers, were paying Gateway $14 million for a 20-year deal, with the payments rising as the years passed. Dick Jacobs was paying about $1 million at the end of his term.

This was Gateway’s money to pay its costs of operations.

Before the two facilities were even completed, however, Gateway was revealed financially about where Detroit is now – essentially bankrupt.

Other financing had to be arranged, primarily with the County letting – without a public vote, of course, bonds of $75 million and $45 million. We’re still paying via County and city revenue at about $8-$9 million every January 15 until 2023.

But still Gateway couldn’t pay its bills. (Even though Mayor Mike White and Commissioner Tim ‘Give Them What They Want” Hagan reneged on their promise not to seek tax abatement. they went a step further for tax EXEMPTION – never to pay any property taxes on the facilities. (I examined two years of property taxes forgiven in 2009: Browns stadium, $15-million; baseball stadium, $9.7 million; Quicken arena, $7.5 million. That’s more than $22 million free property taxes for two years and it goes on forever with most revenue from the Cleveland schools.)

Gateway was to pay taxes on the land but if Gateway did, they’d be broke. Bankrupt.

So, after much huffing and puffing with the team owners, another arrangement was made.

It would have been an embarrassment of large proportions for Cleveland if its new facilities had to go bankrupt. A civic debacle.

What would it say to the town civic criers who were selling Cleveland as the Renaissance Comeback City?

The teams buckled and said they’d provide Gateway with operating funds each year.

Not much of a buckle since in exchange, they took the naming rights revenue.

And Gateway will never get it back.

 Last time I looked the annual operating costs for Gateway were $3.2 million.

The owners had struck another good bargain. Cleveland saved face.

If the Browns deal says anything it says that naming right will be a major revenue producer. For the city? For the County? Not a chance.

For Dolan? Yes. For Gilbert? Definitely. Whether he chooses to assign it to the team, or his mortgage business.

Let’s look a bit more.

Advertising at the ball field or arena?

All to the owners.

Restaurants built and equipped by the fans. Revenue?

All to the owners.

Television rights revenue? In the public facilities.

All to the owners.

Radio broadcast rights revenue?

All to the owners.

All to the owners.

Inside advertising revenue?

All to the owners.

Revenue for use of facilities other than for the teams?

To the owners.

Property taxes?

All forgiven for the owners.

Where do you get a deal like this?

Only form corrupt and pliant officials. That’s where.

And now we’re told the need (want) more.

Our news media doesn’t even attempt to examine just what the news media promoted as absolutely necessary for the city.

The Plain Dealer in particular sold these deals without seriously examining them. And they have consistently been absent in monitoring any of these shameful money grabs.

To see how sickly pandering the media have been go to this CSU memory site of my newsletter from 1996:

During some of these dishonorable doing I tried to force some truth from politicians.

Here’s an exchange with former County Commissioner Jim Petro when he along with Tim Hagan and Mary Boyle were indebted the County with $120 million in debt, still being paid (until 2023).

Roldo: Did you ever ask them (team owners) to back up the bonds themselves with other revenues coming out of those publicly subsidized facilities?

Petro: That question, I don’t know if it was asked.

Roldo: Why wouldn’t a question like that be asked? They are the ones who are benefitting from it.

Petro: I’m not going to keep debating with you, Roldo. We asked a lot of questions.

Roldo: Well, I want to know if you asked that question because that’s the crucial question.

Petro: Roldo, you’ve got all the answers.

Roldo: No, no. That’s the question that needs to be answered. But one that you don’t want to answer because you’re a politician and you just want to wave it off.

It’s easier to pass it off to the public.

Nibble. Nibble. Nibble. Gulp. Gulp. Gulp.

All the costs to people via regressive taxes. All the revenue to team owners via freebies.

Now, they come again. Hands out. Billionaire hands out. Give. Extend the sin tax, atop the 8 percent sales tax.

Criminal I call it.

 

 

In 1991 he was awarded the Second Annual Joe Callaway Award for Civic Courage in Washington, D.C. He received the Distinguished Service Award of the Society of Professional Journalists, Cleveland chapter, in 2002, and was named to the Cleveland Journalism Hall of Fame, 2004. [Photo by Todd Bartimole.]

 

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