Gateway Economic Development Corp., the nonprofit landlord of Progressive Field and Rocket Arena, has tapped out all but a trickle of its available sin tax proceeds to repair the sports facilities. But the repairs aren’t stopping, and the Cavaliers’ Humongotron is on deck for an upgrade.
What happens if Cleveland and Cuyahoga County can’t come up with more stadium cash? The teams’ leases give the Cavs and Guardians a few options for trying to make Gateway pay.
Front the money. The teams can pay for the repairs themselves, and Gateway will have to reimburse them when it comes up with money.
The Cavs have already taken this option. In 2023, the basketball team embarked on $24.4 million in repairs that Gateway could not afford. The Cavs’ CEO made sure to remind Cuyahoga County Executive Chris Ronayne of this fact when the city and county named a new Gateway board chair.
Ronayne and Mayor Justin Bibb rustled up $40 million for repairs to the arena and ballpark. Gateway’s balance with the Cavs is now about $4 million, not including the coming scoreboard repairs.
Sue. The leases say the teams can take Gateway to court if it defaults on its obligations. Litigation can be long and costly, and it may not immediately solve the problem of freeing up cash for repairs. What do you get if you sue someone with no money?
Withhold rent. The Cavaliers and Guardians are Gateway’s rent-paying tenants. The teams’ rent funds Gateway’s operating budget, which stands at $5.9 million this year. That money supports such costs as staff, security, insurance and property taxes on the land beneath the stadiums.
The leases effectively allow the teams to use that rent as leverage. If Gateway defaults, the teams can take their rent payments and apply them instead to what Gateway owes them for repairs.
In the lease’s legalese, “Lessee may, with notice to Gateway and at any time or from time to time, charge, set off and otherwise apply all or any part of any of Lessee’s Obligations against Gateway’s Obligations now or in the future.”
The teams have not raised that possibility with Gateway recently, according to Scott Simpkins, Gateway’s attorney at Mansour Gavin LPA.
Has working from home sapped RTA’s commuter base?
The Greater Cleveland Regional Transit Authority is asking for a sales tax increase next spring in a commuting world that has been reshaped by the COVID-19 pandemic. While transit ridership has generally ticked up since the depths of 2020, it is not back to 2019 levels.
The number of Cuyahoga County residents who take public transit to work fell 27.5% between 2019 and 2024, according to census estimates. Driving to work declined 5.7%. No surprise, working from home exploded 209% over that time.
Around 18,600 county residents regularly rode transit to work in 2024, the latest year for which data is available. That’s about 3% of the county’s working population. More than 77% took a car, truck or van to work, and almost 14% worked from home.
These numbers focus just on transportation to jobs, not travel to doctors, errands or entertainment. According to RTA, about 55% of riders are using transit to get to and from work.
The census figures don’t tell us how many of those transit commuters started driving or instead worked from home. (Numerically speaking, far more people quit driving to work than stopped taking transit.)
But for all the caveats, the numbers underscore an important point about RTA’s bid for more tax revenue. In the years since the pandemic, people in Cuyahoga County haven’t been commuting like they used to.
Emily Harper, an RTA trustee, argued at a board meeting this week that the transit agency should stop comparing today’s ridership to 2019. People work differently today, she said.
“This looks like failure, but I don’t believe that it is a failure, because again, our world is different,” she said.
Even as RTA campaigns for more money in the future, it is downsizing to fit its present predicament. A 3% service cut goes into effect in August, and a 4.9% cut is planned for December.
Bibb hops across the pond
Mayor Bibb spent much of this week in the United Kingdom at the Farnborough Airshow. The event is a trade convention for the aerospace industry and defense manufacturers.
He traveled there with Jennifer Scheel, the city’s business attraction officer. The Cleveland Foundation, not city taxpayers, footed the bill, according to Bibb’s office.
The mayor documented his travels on — what else? — LinkedIn, where he said he was pressing his case in the U.K. for bringing investment back home.
“With world-class research institutions like NASA Glenn Research Center, a skilled manufacturing workforce, strategic industrial sites, and strong regional partners, Cleveland has a compelling story to tell,” Bibb wrote.
He told the military and security publication Defense One that he wanted Cleveland in the conversation at Farnborough. He pitched The Midline industrial development as fertile ground for defense, aerospace, manufacturing and health care companies.
“When folks are thinking about aerospace events, more than likely Cleveland’s not at the top of that list,” the mayor said.
Bibb visited the Cleveland Clinic’s London campus and caught up with Jergens president — and former Cuyahoga County Council member — Jack Schron. They weren’t the only Ohioans in England. So were Gov. Mike DeWine and Greater Cleveland Partnership CEO Baiju Shah, among others.
The mayor also talked with the publication fDI Intelligence about maintaining a “balancing act” on data centers. He chatted about industrial development and tax-increment financing with the Centre for Cities, where CEO Andrew Carter noted that a mayor — former Greater Manchester Mayor Andy Burnham — was taking office as prime minister.
“It’s a good reminder that mayors make good chief executives,” Bibb replied, adding, “at every level of government.”
