CHICAGO — The Cuyahoga County Council signed off on a resolution paving the way for a $140 million bond issue to help cover $280 million of upgrades to the Quicken Loans Arena where the National Basketball Association's Cleveland Cavaliers play.
Approval of a new lease and other documents came despite opposition from council members and local organizations that believe the funds could be better spent elsewhere or that team owner Dan Gilbert should contribute more.
Three council members voted against the resolution saying they had additional questions that were not answered ahead of the vote, while eight endorsed the plan.
The renovations to the 22-year-old arena relies on $16 million from the county, at least $88 million from the city which will come from admission tax revenue, and $44 million from the local group Destination Cleveland's share of a county bed tax with remainder covered by the team. Increased rental payments from the team and hotel taxes would also go to repay $250 million when interest is added.
The Cleveland City Council has not yet voted on pieces of the plan. Its approval is needed to extend the existing city admissions tax. Several public hearings are planned and the project financing faces some opposition although supporters believe it will receive the majority vote needed.
The project is aimed at upgrading and extending the life of the venue, as well as resolve what are described as important structural and operational deficiencies.
Backers say the upgrades will avoid the need to build a new arena at an estimated cost between $500 million and $750 million. The renovations, supporters say, will ensure the team remains in Cleveland through 2034, seven years past the current expiration of its lease.
Once the project is complete, the NBA has agreed to allow Cleveland to be a host city for the NBA All-Star week in the near future. Supporters say the county-funded renovation is needed to preserve the revenue generated by the arena while opponents believe the county should get more out of the deal.
County officials have retained Squire Patton Boggs LLP, and Forbes, Fields & Associates Co. LPA to serve as co-bond counsel on the 2017 Arena Bonds. Stifel Nicolaus & Co. has been hired as financial advisor.