CLEVELAND, OH (92.3 The Fan) – The Cleveland Browns proposed $3.4 billion enclosed stadium and mixed-development complex to be built in Brook Park took a major step forward towards reality Tuesday, with a twist.
The Ohio Senate finance committee included a $600 million appropriations amendment for the project in their biennium budget plan that will be voted on by the senate, but the money would come from a new state Sports and Culture Facility Fund backed by Ohio’s $4.8 billion unclaimed property fund.
“We believe this is a good plan,” Ohio senator and finance committee chair Jerry Cirino (R-Kirtland) said. “It doesn’t put the credit rating of the state in jeopardy.”
It is now the third plan to provide the Browns with state funding for a new enclosed stadium to be built off Snow and Engle Roads on 176 acres of land the team is in the process of acquiring.
Ohio Governor Mike DeWine originally proposed to double the tax on sports gaming companies to 40%, with the new 20% in revenue, expected to generate over $130 million annually, going towards a statewide stadium construction fund to be managed by a project committee.
In April, the Ohio House rejected DeWine's plan and included $600 million in financing to be funded through bonds in the budget they passed.
And now the senate plan, which scrapped both plans with the exception of creating a statewide fund for stadium construction that DeWine proposed by using $1.7 billion in unclaimed funds accumulated from at least 10 years ago to create the state Sports and Culture Facility Fund with $600 million earmarked for the Browns.
“We’re going to take the $1.1 billion left, and put that into future projects,” Cirino said.
“We know that there are going to be other projects coming down the road and we want to be able to have funds set aside in order to take care of [those]. So they have not been identified yet, the parameters of those projects will be evaluated on a [case by case] basis.”
All unclaimed funds will be available to their rightful owners through the state's claim process under this plan.
“We were very careful to ensure that we weren’t running into any jeopardy to support any unclaimed funds that are actually legitimate, and someone actually claims it,” Cirino said. “The percentages are very, very low. And since we have the timeline of at least 10 years before we can even access those funds after they have been in the state’s possession. Very often, those funds sit in insurance companies or banks or other places, they sit there for years while they try to find who the rightful owners are….So we don’t think there’s any risk of jeopardizing that plus we’re putting in a million dollars more each year for the commerce department to try to connect claimants with the funds that are out there.”
The money set aside for Brook Park would be paid back through tax revenues generated by the new stadium and development. To insure the state funding repayment, the team will place $50 million in escrow to backstop any tax revenue projection shortfalls. Should those funds be depleted, the team will place an additional $50 million in escrow. After 16 years, the team would recoup any unused funds from that escrow account.
The senate budget bill also includes a Cuyahoga County permissive to allow the county to place a sin tax increase on the ballot for voters to vote on, with a caveat: the funds must be made available to all three teams - the Guardians, Cavs and Browns.
“It’s up to the voters of Cuyahoga County, to decide if they want to do it or not,” Cirino said. “We had brought to us on that subject suggested legislation. There was some things in it we didn’t care for in terms of the extent of the increase, indexing taxes for the future. We don’t like that idea at all and we wanted to make sure that there was a proper sharing of the teams regardless of where the teams are in Cuyahoga County.”
Once the senate votes to approve their version of the budget, it will go through a reconciliation process with the conference committee, which will be comprised of two republicans and one democrat from each chamber to settle the differences between the house and senate budgets.
Following the reconciliation process, which will likely determine the construct for the Browns to receive the $600 million in state support, the final budget goes to Governor Mike DeWine’s desk at the end of the month for his signature and it to become law.
“This is about economic development, not just supporting a sports team,” Cirino said. “We’re very confident this is going to work. We’re very confident we’re not putting any of the state’s assets or credit ratings at risk, and we feel it’s a very creative way to do this – to use money that is not working for us right now and putting it to work to create jobs and good economic growth in northeast Ohio.”
Should everything continue to progress and the state funding is approved and signed by DeWine, the Browns aim to put shovels in the ground for the stadium and development by next April with a completion date of August 2029.
The team originally sought a 50-50 public-private split to cover the cost of the $2.4 billion 67,500-seat enclosed stadium to be built 80 feet in the ground adjacent to Hopkins International Airport.
Last month Browns chief operating officer David Jenkins sent a letter to Cuyahoga County Executive Chris Ronayne informing him the team is prepared to move forward with the project without county participation.
The Browns sought $178 million and a backstop for $422 million in bonds for the city of Brook Park from Cuyahoga County, increasing their commitment to $1.378 billion plus cost overruns for the enclosed stadium.
On Wednesday the Browns will break ground on a $200 million privately funded mixed-use development, which includes a 7,000-seat multi purpose stadium and field, University Hospitals sports medicine center as well as apartments, a hotel, retail space and a parking structure, to be built next to their training facility, CrossCountry Mortgage Campus, in Berea.