(The Center Square) – The Cleveland Browns plan to build a $2.4 billion domed stadium in Brook Park with state and city public funding but will do it regardless of if they receive assistance from Cuyahoga County, Haslam Sports Group Chief Operating Officer Dave Jenkins wrote in a letter to the county.
In the letter, Jenkins repeated unsubstantiated claims that a new stadium would create hundreds of millions in excess tax revenue as opposed to renovating the team’s current stadium in Cleveland.
“It is truly disheartening to see you, as County Executive, actively work against a potential $600 million investment from the State that would be paired with $2 billion+ in private investment for an unprecedented $3 billion+ economic development project centrally located in Cuyahoga County,” Jenkins wrote. “These are the types of inexplicable decisions that keep the Greater Cleveland region from thriving, while other regions like Columbus and Cincinnati continue to grow and evolve.”
The Browns have asked for a total of $1.2 billion in public funds to build the stadium in Brook Park, including $422 million from Brook Park, $178 million from Cuyahoga County and $600 million from the state of Ohio. Those funds would be paid back through a tax capture at the site, the Browns claim.
NFL Commissioner Roger Goodell was in Columbus this week to meet with both Gov. Mike DeWine and state leaders about the stadium project.
The Browns’ estimates of taxpayer benefits were recently characterized as overblown and filled with inconsistencies and incorrect information by Ohio’s Office of Budget Management.
Economists who have studied professional sports stadiums have consistently shown that money spent at a stadium and taxes collected are diverted spending from elsewhere in a state or region with the overall tax base not rising.
In this case, the Browns would simply be moving operations from Cleveland to Brook Park and creating a tax capture in Brook Park to pay for up to half of the new stadium.
That means that $1.2 billion that had been going to the public entities as part of the tax base will now be sent to the Browns.
“It’s just your typical loser of a financial plan that claims to bring big economic benefits at no cost to taxpayers, when neither of those things are true,” economist J.C. Bradbury of Georgia’s Kennesaw State University told The Center Square when the plan was announced. “The Browns have a history of losing, and this plan sticks with that tradition. The fabulously wealthy Haslams should be embarrassed to be expecting Ohio taxpayers to give them a handout.”
Bradbury has studied sports stadiums, their financing and impact across the country and recently sent a new paper on the topic titled “This one will be different, False promises and fiscal realities of publicly funded stadiums” for peer review after two years of writing.
Along with the tax capture, the Browns have asked Cuyahoga County for a new 1% bed tax for hotels and a rental car tax for all of Cuyahoga County.
“I think what is attractive to us is the vast majority of those monies, bed taxes and rental car fees, are going to be paid by people who do not live in Cuyahoga County,” Haslam Sports Group said when the plan was announced. “It would be unfair to say all of them, but the vast majority would be paid by people who do not live in the county.”
Bradbury and other economists have shown that the source of taxes sent to sports teams to build stadiums does not matter as the funding comes from the tax base and lowers the amount government has available to spend on other items.
None of that deterred the Haslam Sports Group from again making the claims of economic benefit in Jenkins’ letter.
“To further clear up misinformation, while we have not given up on our elusive goal of local unity, and the upside for the public is far greater with the County’s partnership, we remain undeterred and are not relying on the County’s participation to executive this project,” Jenkins wrote.
