Posts Tagged Cavs
Gateway Costs Taxpayers $100 Million Plus
Posted by Roldo Bartimole in Economic Development, Politicians on February 6, 2010
February 6, 2010… Taxpayers continue to pay dearly for the run-over costs from Gateway. Cuyahoga County sent a check of $2,493,426.93 but that was only a small portion of tax funds that now total far more than $100 million paid for bond borrowings in the 1990s.
Payments last year put the cost over $100 million; $9.7 million payment was made this January.
Similar January payments will continue annually through 2023. Go Cavs!
Dan Gilbert, Cavaliers owner, is one of the beneficiaries of this tax subsidy. You can thank Tim Hagan and Mike White mostly for this heavy subsidization of Gateway.
The full payment was $9,787,701.05.
In addition to the $2.49 million check from the County another $7.29 million came from other public sources. It includes millions of City of Cleveland tax dollars via the admissions tax and some $3 million from County bed taxes. (In this case, the bed taxes for two years were allocated in 2010.) A small part of the cost results from consultant fees.
The accounting calls for a portion of admission taxes from Quicken Arena – instead of going to the money-strapped city – to be used to pay for these bonds. Cuyahoga County originally issued bonds of $75 million and $45 million in the mid 1990s for the Gateway project. This was in addition to the sin tax, which brought in some $230 million for Gateway.
The Gateway project funding formula requires certain admission tax receipts at Quicken Arena to be used for the bond payments. The share varies from five-eighths to 25 percent of the admission taxes from ticket sales to be used to pay bondholders.
What this dramatically reveals is the huge money-maker the arena is for Gilbert.
Here are the actual figures as given by documents from the County Auditor’s office.
GATEWAY ARENA PROJECT FUNDING 2009
DATE AMOUNT FUNDING SOURCE FROM GATEWAY TOTAL 2004B Bonds Int Invoice $ Amt:
Jan 01 2009 ~ Beginning Balance 1/1/2008 $41,533,218.25.
Jan 30 2009 $84,383.28 25% of admission tax for “events” for Dec. 2008 $41,617,601.53
Jan 30 2009 $464,189.81 5/8ths of Games admission tax for Dec. 2008 $42,081,791.34.
Feb 03 2009 $1,425,101.00 Annual Incremental Bed Tax Payment – 2008 $43,506,892.34.
Feb 28 2009 $54,624.58 25% of admission tax for “events” for Jan. 2009 $43,561,516.92.
Feb 28 2009 $416,958.84 5/8ths of Games admission tax for Jan. 2009 $43,978,475.76
Mar 28 2009 $21,765.17 25% of admission tax for “events” for Feb. 2009 $44,000,240.93.
Mar 28 2009 $353,296.22 5/8ths of Games admission tax for Feb. 2009 $44,353,537.15.
Apr 28 2009 $193,366.67 25% of admission tax for “events” for Mar. 2009 $44,546,903.82.
Apr 28 2009 $418,900.83 5/8ths of Games admission tax for Mar. 2009 $44,965,804.65.
May 31 2009 $64,455.56 25% of admission tax for “events” for Apr. 2009 $45,030,260.21.
May 31 2009 $698,168.05 5/8ths of Games admission tax for Apr. 2009 $45,728,428.26.
Jun 30 2009 $66,891.90 25% of admission tax for “events” for May. 2009 $45,795,320.16.
Jun 30 2009 $536,646.26 5/8ths of Games admission tax for May. 2009 $46,331,966.42.
Jul 30 2009 $0.00 25% of admission tax for “events” for Jun. 2009 $46,331,966.42.
Jul 30 2009 $0.00 5/8ths of Games admission tax for Jun. 2009 $46,331,966.42.
Aug 29 2009 $0.00 25% of admission tax for “events” for Jul. 2009 $46,331,966.42.
Aug 29 2009 $0.00 5/8ths of Games admission tax for Jul. 2009 $46,331,966.42.
Sep 30 2009 $41,775.04 25% of admission tax for “events” for Aug. 2009 $46,373,741.46.
Nov 25 2009 $1,650,302.00 Annual Incremental Bed Tax Payment 2009 $48,024,043.46
Oct 30 2009 $17,949.30 25% of admission tax for “events” for Sep. 2009 $48,041,992.
Nov 30 2009 $69,908.17 25% of admission tax for “events” for Sep. 2009 $48,111,900.93.
Nov 30 2009 $323,458.96 5/8ths of Games admission tax for Oct. 2009 $48,435,359.89.
Dec 30 2009 $60,293.62 25% of admission tax for “events” for Nov. 2009 $48,495,653.51.
Dec 30 2009 $416,172.13 5/8ths of Games admission tax for Nov. 2009 $48,911,825.64
$7,378,607.39 $7,378,607.39
2009 Collections
Admissions (Games/Events) Tax $4,303,204.39 Chg From Prev. Yr % Change
Excess Bed Tax from CVB $3,075,403.00 $952,916.57 22.1%
Total Revenue Collections $7,378,607.39 $3,075,403.00 100.0%
The document below shows the principal and interest payment due this year with a total of $9.7 million due. The amount shown as from “StarOhio” is the result of the transfer of funds from the admission taxes and bed taxes. See document:
GATEWAY-Jan 10
Cuyahoga County Pledge Fund
Calculation of Funding required for 2010 in Gateway/Pledge Fund
Monthly interest on Series 2004B (floating rate @ 3.0459%) $4,353.10 per mo.x 12 = $52,237.19
“Bank Bond” interest @ 5.25% $76,496.88 per mo.x 12 = $917,962.50
(interest due 1st business day each month)
Interest on Series 1992A $1,509,375 x 2 = $3,018,750.00
(interest paid June 1 and Dec. 1)
Interest on Series 1994 $889,932.50 (June) $804,856.25 (Dec.) = $1,694,788.75
(interest paid June 1 and Dec. 1)
Interest on Series 2004A $68,725.00 (June) $36,125.00(Dec.) = $104,850.00
(interest paid June 1 and Dec. 1)
Principal due June 1 on Series 1994 bonds $2,315,000.00
Principal due June 1 on Series 2004A bonds $1,630,000.00
Wachovia Bank fees Calculated @ 90 bp x $1,715,000 + $19,734.25 $15,612.61
(1,715,000 x35/365 days interest @12%)
(paid quarterly Jan. Apr. Jul. Oct. 15th)
Remarketing Agent fees = $30,000.00
(paid quarterly Mar. Jun. Sep. Dec. 15th)
Rating Agent fees = $8,500.00
(paid annually in 4th quarter)
Total Interest $5,788,588.44
Total Principal $3,945,000.00
Total fees $54,112.61
Jan. 15, 2010 Grand total due = $9,787,701.05
137402 Jan. 7, 2010 Balance in StarOhio = ($7,294,274.12)
Jan. 15, 2010 Additional amount required = $2,493,426.93
That final figure is the amount of the check issued on Jan. 15 by Cuyahoga County from its general fund.
Only 13 more years to go!
Former Cop’s Arrest Story Differs from Dan Gilbert’s Version
Posted by Roldo Bartimole in Economic Development, Media, People on October 30, 2009
October 30, 2009… A former Michigan state trooper tells a different story of Dan Gilbert’s arrest for operation of a gambling business than the Cavs owner has been peddling to the news media. Gilbert has made it seem a minor episode, best forgotten.
Gilbert, a billionaire of the mortgage business and owner of the Cleveland Cavaliers, has been a lead proponent of a monopoly casino issue on the November ballot. Issue 3 will give Gilbert a monopoly casino in Cleveland.
A lieutenant detective tells of the arrest of Gilbert when he was a Michigan student. He posed as the father of a gambling debtor. He said a victim told him of a strong-armed threat unless he paid. He also linked a car filled with manure to the betting business as a method of forcing collections of gambling debts.
The detective, John Fiedler recorded the meeting with Gilbert when he went to pay the debt. He said he was shown a ledger with betting data with pages of bets made, some as high as $1,000 or more.
Here is his statement in full:
“My name is John Fiedler, and I was a member of the Michigan Department of State Police for 25 years.
“In 1981, while I was a Detective Lieutenant in charge of the organized crime unit, the East Lansing Police asked my unit to assist them with a criminal investigation into an illegal bookmaking operation that eventually led to the arrest of Dan Gilbert.
“I have read Mr. Gilbert’s explanation of what happened that day. I’m here to tell you what really happened.
“East Lansing Police received a complaint from a young man who owed a significant amount of money to the bookies. It was over $1000 but I cannot remember the exact amount.
“After interviewing the victim, I had him call and say that his father planned to pay his debt and arrange a meeting between the bookies and his dad. I posed as the young man’s father and entered an off-campus house where I met two men. One of them was Dan Gilbert, and Dan Gilbert did all the talking.
“I was wearing a hidden recorder and transmitter and I asked him why he believed that my ‘son’ owed him so much money. The other man left the room and returned with a ledger. He showed me all of the bets that he had made – and I got to see lists of bets that others had made. I do not remember the number of bets but several pages of the ledger book were filled.
“There were $10 bets, $100 bets and even some $1,000 bets.
“The victim had personally told me that Mr. Gilbert had grabbed him and pushed him up against the wall, making threats that he had better pay up. Another police officer who worked on the case said one victim who did not pay had his car filled with manure and it contained a letter threatening bodily harm.
“I asked Mr. Gilbert why he felt the need to threaten my ‘son’ and he told me that he was owed the money and my ‘son’ refused to pay.
“So I paid him the money, signaled to the East Lancing Police, and they entered the house and arrested both men.
“I understand that the voters of Ohio have a big decision to make on Tuesday. When I learned Mr. Gilbert’s characterization of what happened back in 1981, I agreed to tell the people of Ohio what really transpired. Mr. Gilbert was part of a serious, organized bookmaking ring that threatened some of its victims with violence.
“I am also here today because I learned that some members of Ohio’s law enforcement community believe that Issue 3 would severely limit the scope and authority of law enforcement over owners and investors of Ohio’s casinos. Based on my police experience in investigating crimes of this nature, I completely agree with concerns raised by the Ohio law enforcement community. Casinos are the type of industry that demands tough, impartial and complete oversight.
“I am not here to tell Ohio voters how to vote on Issue 3. I am here to try and make sure Ohio voters have the facts they need to make an informed choice.”