May 25, 2024

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Cleveland Browns owners have hands out for new stadium public subsidy

7 min read
Cleveland Browns owners have hands out for new stadium public subsidy

The National Football League’s Cleveland Browns recently met with state legislators in Ohio to discuss plans including a new $2.4 billion domed stadium in Brook Park — about 14 miles southwest of Cleveland — for which the team wants public funding.

“We know that there are two proposals being floated, but they certainly have not reached the stage where there’s a formal request,” said Dan Tierney, press secretary for Ohio Gov. Mike DeWine. “It’s very early stages.”

Tierney said DeWine is generally in favor of public investments in sports stadiums, but “from the governor’s perspective, the first thing that needs to happen is that the team and the community [need to] come to an agreement about what it is they want.”

Billions or dollars are needed to upgrade or replace the 25-year-old Cleveland Browns Stadium, owners of the NFL team say.

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State Rep. Bride Rose Sweeney, D-District 16, who was part of the legislative delegation that met with team representatives last month, declined to comment. A Browns spokesperson did not respond to requests to comment.

The franchise’s 30-year lease on Cleveland Browns Stadium in Cleveland expires in 2028.

In 2022, the team conducted a feasibility study looking at renovations of the venue, formerly named FirstEnergy Stadium, that would cost over $1 billion. The team sought $500 to $600 million from taxpayers for the renovations, two City Council members told Signal Cleveland

Then, early this year, a local blogger broke the news that team owner Jimmy Haslam’s Haslam Sports Group had bought 176 acres in the suburb of Brook Park, which also hosts Cleveland Hopkins International Airport.

“We appreciate the collaborative process with the City of Cleveland and the leadership of Mayor Bibb in analyzing the landbridge and renovating the current stadium. At the same time, as part of our comprehensive planning efforts, we are also studying other potential stadium options in Northeast Ohio at various additional sites,” Haslam Sports Group spokesperson Peter John-Baptiste said in a statement in February. 

The landbridge refers to plans to build a pedestrian connection over railroad tracks and a highway to link downtown with the Lake Erie lakefront, including the stadium.

The Browns are reportedly now seeking $1.2 billion total, $600 million from the state and $600 million from local governments, toward the costs of the new Brook Park stadium. That’s nearly triple all the state assistance to build other sports stadiums, combined, over the past 27 years, according to a Cleveland.com analysis.

The state chipped in $21.79 million toward the costs of a new stadium for the Browns in 1998. The city of Cleveland helped finance the stadium’s construction with tax-exempt bonds, with the city paying debt service using its share of Cuyahoga County’s excise taxes on alcohol and tobacco products. And the city helped pay the $120 million price tag of renovations in 2014.

The Browns’ stadium complaints — and demands to taxpayers — may trigger memories of the departure of the first version of the Cleveland Browns.

After the 1995 season that franchise departed for a subsidized stadium in Baltimore, becoming the Baltimore Ravens, filling a void created by the Baltimore Colts’ abrupt move to Indianapolis in 1984.

An expansion version of the Browns debuted in 1999 in the new bond-financed stadium, which has the distinction of being the only one of the NFL’s 31 venues never to host a playoff game of any kind.

Local taxes and bonds have also in recent years subsidized the venues of the NBA Cleveland Cavaliers and Major League Baseball’s Cleveland Guardians.

Ohio House Speaker Jason Stephens told the Cleveland Plain Dealer that the state doesn’t currently have $600 million to give and that he’d prefer to issue bonds, possibly through the municipality where the stadium will be based, arguing that then other teams would be less likely to come forward seeking public funds themselves. Stephens’ office did not respond to requests for comment.

“I don’t see a difference in terms of incentives for future funding of stadiums,” said Robert Baumann, economics professor at College of the Holy Cross and co-author of a recent study on stadium developments. “Either way, this is still on the taxpayer.”

Baumann added that it is a common tactic in situations like that for stadium advocates to claim that the supposed economic benefits from the stadium will cover the borrowing costs and no new taxes will be necessary.

“At least with direct spending the municipality could say there are more pressing budgetary needs, like education, police or transportation,” he said. 

Cuyahoga County issued taxable and tax-exempt bonds in 2022 to help finance a $435 million upgrade to Progressive Field, home to the Guardians. DeWine joined city, county and team officials for that deal’s announcement. 

According to Tierney, the Browns’ new $2.4 billion proposal would involve not just a stadium but a mixed-use entertainment district surrounding it.

“The governor is open to doing the project a little differently if it’s a different type of project,” he said. “At the very least, the proposal regarding Brook Park is a different type of proposal in that it also serves as a seed for economic development around the property.”

Ohio Gov. Mike DeWine
Ohio Gov. Mike DeWine speaks at a ceremony at a manufacturing plant in 2022. The governor takes a broader view of the potential economic impact from sports stadiums, focusing on the draw he says it creates for employers to relocate to Ohio, his press secretary said.

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Economists have found that stadium projects generally do not result in positive fiscal returns to local governments or a statistically significant uptick in development. Even two decades ago, a survey of economists found 86% of them said state and local governments should end stadium subsidies for private sports franchises altogether.

A 2023 study by Baumann and John Charles Bradbury found that “ancillary developments” do not improve fiscal returns to municipalities on stadium projects.

“There is a mountain of evidence that stadium subsidies do not provide a positive return on investment. In my mind, there isn’t a stadium subsidy for taxpayers that is ‘a good deal,'” Baumann said. “For the Browns specifically, that stadium is about 25 years old, has an enormous footprint on the waterfront, and hosts about 12 to 15 events per year. People seem to forget that not much happens in and around an NFL stadium most of the year, and they also require a ring of parking lots to satisfy game days. Unless they are in remote or unused areas, stadiums are pretty bad economic drivers because they are closed most of the time.” 

And a 2020 study in the Journal of Sports Economics found “no clear evidence” of greater economic development in cities with new stadiums — that teams largely move into markets that already have higher growth. 

“Justifications for public funding for new stadiums [have] shifted away from economic impact generated by teams and towards economic (re)development generated directly or indirectly by venues,” researchers Nola Agher and Dan Rascher wrote. “The purpose of this paper is to test for the economic redevelopment effects through net changes in businesses and net changes in employment… Overall, we find no substantial evidence that entry of a new team or stadium is associated with any net gains related to economic development.”

But Tierney said DeWine thinks about the economic impact of stadiums more broadly, in terms of creating a draw for employers to relocate to his state. He said the governor has had “specific conversations” with CEOs that included questions about activities for their employees’ families.

“The governor believes that professional sports help contribute to quality of life; these are the types of things that he knows that employers look at when they consider relocating to Ohio,” Tierney said. “They’re going to ask, ‘What is there for my employees?’ … Sports are not the only thing. Ohio’s got a great parks system; they’re going to look at our schools… but professional sports is certainly part of the mix.” 

He added that it’s important to understand that professional sports have been part of the fabric of the state “since right after the Civil War,” with the Cincinnati Reds among the longest-operating sports teams and the NFL having been founded in Canton, Ohio, around 1920.

Today, he said, Ohioans who want to catch a game are no more than an hour or two away from a stadium. But many of the state’s stadiums were built in the 1990s, and “the governor notes that these stadiums and arenas generally have a useful life of 30 years,” Tierney said.

“You certainly have to have amenities to compete in the economic development game these days,” Tierney said. “We want to show that Ohio is competitive with other parts of the country.”

Baumann said the Browns’ franchise value has “skyrocketed” since the Haslam family bought it in 2012, and the team’s owners should face more pressure to pay for a renovation or a new stadium themselves. But, as a native Ohioan, he acknowledged that losing the Browns to Baltimore left a psychic scar on Cleveland.

“I suspect that is the nerve the Haslams are trying to tap,” he said.