Posts Tagged Dan Gilbert
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!
Want a Just City Tax… Try Admission Tax on Sports Events, Fair and Proper
Posted by Roldo Bartimole in Economic Development, Politicians on November 24, 2009
November 24, 2009… The most reasonable tax for Cleveland City Council to raise income would be a special admissions tax on all events at Progressive Field, Quicken Arena, and Browns Stadium.
Why?
The reason is mainly because none of the teams pay any property taxes on their sports facilities. Not a penny.
They ride FREE.
Somehow Mayor Frank Jackson and City Council always overlook the guys at the top of the ladder. In this case, all Billionaires. How predictable.
We shall see how it makes sense.
A 10 percent added admission tax would bring in millions of new revenue. The tax would actually probably have an added benefit to sports fans. The teams would have to think twice before raising ticket prices.
So it’s likely that a major part of the cost would have to be borne by the teams and the already – if not over-paid – well paid athletes.
It would be fairer because, although the city pays the high cost of policing the sports events and takes the loss of property taxes, the fan base comes from a wide geographic area. Most likely most fans come from outside Cleveland and many outside Cuyahoga County.
They don’t share the burden of the cost of the stadiums to the city and county taxpayers. They enjoy the benefits, however.
So they should pay.
Even more to the point, the three team owners – Randy Lerner, Dan Gilbert and Larry Dolan – all come from billionaire families.
Who can afford to pay more taxes – billionaire families or an ordinary Cleveland family? It’s a trick question for the mayor and council members.
Even Mayor Jackson and Council President Marty Sweeney can figure that one out. If they want to.
If you can afford to go to games and events at these venues, built largely with government funds and advantaged with full 100 percent property tax relief, you should be willing to pay that extra charge to Cleveland.
After all, Cleveland residents feel the impact of the lost revenue from the exemption of property taxes. Some 15 percent would go to the city for its operation.
If you look at the attendance and average ticket price at events you can get a picture of how much money this could mean for the city.
The Cleveland Cavaliers had attendance in 2008-09 of 820,439, actually down from the previous season of 839,674. At an average price cited for tickets at the arena of $50, the Cavs would have attendance income of $41,983,700.
A 10 percent added admission tax would mean income of some $4.19 million in revenue for the city.
The Cleveland Browns had 578,672 in attendance (latest figures from 2006). At an average price of $55 for football tickets, it would mean revenue income of $31.8 million.
A 10 percent added admission tax would produce $3,182,696 of income for the city.
The Cleveland Indians had 27,110 in average in attendance for 80 games for an attendance of 2,168,800. At an average price of $26 for baseball tickets here, it would mean $56,388,800 in ticket revenue.
At a 10 percent added admission tax it would produce $5,638,880 for the city.
The city would earn more than $13 million in added admission tax revenue. It would produce more revenue than a garbage tax.
It would produce such revenue in a fairer manner. It would likely keep ticket price increases smaller or nonexistent.
The market will bear just so much, although sports fans seem to be unthinking consumers, paying more and more even though the teams reap huge amounts of money from television and radio and other sources. The NFL teams, for example, share some $100,000,000 (yes the zeros are correct) in revenue from broadcast and other sales of team products.
If you charged the 10 percent for ALL events at these tax-subsidized, property tax evaders, the city would earn even more money.
Doesn’t this make more sense and isn’t this fairer than taxing garbage?