Regarding the Cleveland Browns’ future, the viability of a dome, and the financing options
Throughout the upcoming months and years, the steps that separate the two landmarks might act as a kind of battlefield. There’s a quiet showdown under way that could only get louder.
A Browns owner and a Cleveland mayor have attempted to negotiate a stadium agreement before. Compared to the violent conflict between Michael White and Art Modell, this one will conclude very differently. There’s no way the Browns are going to leave the area this time. Following the 1995 Great Heist to Baltimore by Model, laws were changed to guarantee it.
The Browns and the city, however, have been exchanging polite statements that haven’t really revealed much since the blog NEOtrans first broke the story about the Haslams’ interest in land near the airport and their practice facility as a potential new stadium site. This is because the original 30-year stadium lease is scheduled to expire after the 2028 NFL season.
Let’s be clear: I think the Browns want a new domed stadium, whether in Cleveland or one of the neighboring suburbs. The team and the city of Cleveland continue to treat each other with civility in public. Even though it’s still a possibility, renovating the current stadium seems like a last resort right now, something they would only do if they couldn’t raise the money for something more ambitious.
Starting with a renovation, creating renderings, and estimating costs was smart politics. Even more, the Ohio House committed $20 million for a desperately needed land bridge that would link the waterfront and downtown. However, I’ve always doubted the Browns’ sincerity and the viability of the renovation.
Cleveland Browns Stadium is terrible, even by NFL standards these days. It’s a horrible place. When the team returned in 1999, the job was completed in a hurry. Some of the most expensive seats have horrible sight lines. There are not enough suites. There isn’t a single service level that stretches all the way around the stadium; none exists. When cars and pedestrians leave the stadium after a game, there are safety concerns. The concourses are excessively cramped and narrow. Not to mention, when the winds whip in from Lake Erie in December, it’s a very terrible place to be. Everything about it is a mess.
A new domed stadium will cost, with a capital B, between $2 and $2.5 billion, as construction costs continue to soar. That is nearly twice as much as the stunning new dome stadium the Vikings built less than ten years ago.
Jimmy Haslam needs to contribute at least half. That’s a non-negotiable and standard procedure in the world of building new stadiums. The Minnesota Vikings’ owners, the Wilfs, contributed over half of the total cost to build U.S. Bank Stadium. Similarly, Arthur Blank contributed roughly half of the cost of Atlanta’s stunning Mercedes-Benz Stadium. In the end, Blank was held accountable for every overrun, and there were numerous of them on a project that ultimately came in at between $1.6 billion and $1.8 billion.
The unique retractable roof of Atlanta’s stadium, which opened and closed like a flower petal, made a difference. I’ve been informed that the Browns and the Haslams have a straight dome in mind. Nothing retracted. So how is this low-income area expected to pay for it?
Let’s begin with Haslam’s ability to cover the entire cost on his own, which I agree with. After selling his last Pilot Flying J, he can definitely afford it.
The entirety of Los Angeles’ SoFi Stadium was funded by Stan Kroenke. The advantage, from his perspective? no meddling from the government. Nobody can tell him what he may or cannot do if there are no public funds involved.
In actuality, there are several ways to pay for a new stadium without raising local taxes or taking money from the general fundโsomething Cleveland Mayor Justin Bibb swore last spring he would not doโif this takes the public/private partnership path, as the majority of these appear to do. It was a smart move on the part of the city, and a sound negotiation tool. Bibb informed the Haslams that the city would not reinstitute the sin tax, which Cleveland had previously employed to finance the Gateway Sports and Entertainment Complex. But when the time comes, there are alternative ways the state and city may contribute to a new stadium without putting the cost on taxpayers.
Let’s start with gambling and marijuana.
Cannabis may end up playing a significant role in all of this. Ohio is still figuring out how to handle taxes related to its recent legalization. Currently, it’s open season, and everyone wants a piece of the action, so it’s possible that some tax money will end up funding sporting facilities around the state.
In addition, during the first year of legal gaming in 2023, Ohioans spent almost $6 billion on gambling. In July, lawmakers voted to raise taxes by 100% and increase withholdings from 10% to 20%. Ohio thus collected $102 million in taxes over the month of October, as reported by the Dayton Daily News. So why not make another trip back there? Nobody is likely to be discouraged from placing a same-game wager on Deshaun Watson’s passing yards and winning the over by an additional 5 percent tax.
The majority of the state’s gambling-related tax money is allocated to education, with minor portions going toward programs for veterans of the armed forces and those with gambling addiction. While I would never advocate rerouting already-awarded funds, I do think it is feasible to hire the correct lobbyists to introduce the necessary legislation and raise casino taxes once more in order to finance stadium construction, maintenance, and repairs.
Ohio hasn’t really looked at one other unusual source of income, but it worked so well in Minneapolis that the state was able to pay off $348 million in state debts 20 years ahead of schedule.
In the absence of authorized gambling, Minnesota turned to charity-operated electronic pull-tab games. These are slot machine-like games that are exclusive to bars and veterans’ halls and can only be played on iPads. Games range in price from 50 cents to $5, with the most popular ones costing $1 and $2.
Politicians in Minnesota were initially quite skeptical of the concept of philanthropic electronic pull-tab games, and with good reason. It was a first for its kind. However, following a disastrous beginning, the games were altered and have enjoyed tremendous success over the past ten years. The NFL’s Minnesota Wild and the NBA’s Minnesota Timberwolves are now considering separate arena renovations that will each run into the hundreds of millions after the bonds for U.S. Bank Stadium were already retired. It is inevitable that the state will turn its attention back to its electronic pull-tab games as a source of income.
According to reports, Minnesota receives over $2 billion in money from the games each year, which goes toward funding tens of millions of charitable causes. Other than changing tax laws, not much would stop Ohio from taking the same action in this instance. The Browns are well aware of Minnesota’s achievements in charitable gambling.
“I believe that in order for charitable gambling to be permitted in licensed bars and restaurants with a charity sponsor, a charity licensee would have to expand it,” stated Jon Weaver, president of Pilot Games, whose business created the computerized pull-tab games that are so popular in Minnesota. “The tax structure would most likely need to be altered. Right now, the tax on charitable gaming is quite low. They can remark, “Look, it’s in veterans clubs right now.” It is possible to place tablet-based games at eateries and pubs, but doing so will incur fees. Additionally, pubs and restaurants in Minnesota are thrilled to have it, and charities are happy to do the same.
Weaver recently signed an agreement with the Cincinnati Bengals, which means that by the middle of the year, his businessโon a far smaller scaleโwill be operating in Ohio. Pilot Games is situated in Minnesota, so he tweaked the product and made a Bengals game that was comparable to what he made for the Vikings, Twins, and Wild.
Weaver’s company develops the systems and games for the charities and acts as a vendor for them. Weaver pays the teams a licensing fee for the use of the trademark and intellectual property in the team-specific games.
In actuality, the question is: How much money can Ohio reasonably hope to make from these kinds of games? Can Ohio make enough money over the course of 30 years to pay off $700 million in bonds for a new stadium, given that Minnesota made $350 million in just ten years? What occurs if it is unsuccessful? Ohio may not see the same level of success with an approach that works in Minnesota. It will take months, if not years, to sort through all of these questions. But now is the moment to take action.
Right now, it seems like the Browns are moving much more urgently than the city. This is one of the reasons the Browns are probably not too concerned by last week’s disclosure of information about the Brook Park property. Maybe it’s a means of exerting pressure and getting the city to participate.
Even now, the Brook Park location is far from a sure thing. The site is still being studied by the Browns, and two people with knowledge of the location told me that due to the stadium’s close proximity to the airport, part of it could need to be buried in order to comply with FAA height restrictions on neighboring facilities and regulations around runways. Higher building costs result from this. It might make the entire issue irrelevant. To put it another way, the situation might still go south, and the Haslams haven’t reached the point of really buying the home yet. Alternatively, Jimmy Haslam may go ahead and buy it, use it as leverage in negotiations, and eventually turn it into anything else except a stadium.
The entire area of land surrounding the former Ford manufacturing site is what makes it so perfect. In professional sports, mixed-use development surrounding stadiums and arenas has gained popularity. Regarding Gateway, the Guardians and Cavs have investigated related concepts. On the 176 acres that are being considered, Haslam is free to construct hotels, entertainment venues, residences, restaurants, or anything else he wants. Not to mention the opportunity to use the dome more than ten times a year and the parking money for events.
Meanwhile, Bibb appears to be concentrating on more urgent issues for the city, like his recently created tax increment financing (TIF) area. Public works along the riverfront and shoreline would be supported by a planned Shore-to-Core Tax Incentive District (TIFD). As of right now, it appears that City Hall is focused on that, so the Browns aren’t their first priority. Ultimately, the lease has four more years left on it before expiring.
I think that’s incorrect. I’ve had conversations with folks who have previously worked on various stadium projects. They’re all in agreement that the time to begin planning is now, years in advance. Waiting until near the end of the lease causes too much pressure, which results in inadequate preparation and poor choices.
Legislation pertaining to electronic pull-tab games was passed in Minnesota in 2012. In 2016, the stadium reopened after four years.