Posts Tagged Larry Dolan
Perfect Solution Where New Cuyahoga County Officials Can Meet
Posted by Roldo Bartimole in Media, Politicians on March 28, 2010
March 28, 2010… I have the perfect place for the new Cuyahoga County Council to meet. It shouldn’t cost a penny. County taxpayers already paid for construction. And even to furnish it!
It’s a building the County constructed in Jacobs Field.
It’s not far from the present County Administration building.
The building wasn’t even in the lease. It was a gift.
I was told at the time that there was an unsightly ramp. Such a problem. So we – thank you Michael White and Tim Hagan especially – built a 57,500 square foot administration building “to hide the ramp that would have been visible to the public from Ontario Street,” Gateway boss Tom Chema told me. I guess they didn’t think of some far less costly solution. Shrubbery perhaps?
The truth is that Dick Jacobs wanted an office building for his Cleveland Indians staff. And what Dick Jacobs wanted our County Commissioners and Chema gave him.
So why doesn’t the County ask the Dolan family to vacate one floor of the five-story office building we built for them? (Come to think of it, maybe Matt Dolan, candidate for County Executive, could expedite this process with Larry Dolan, team owner and his dad.)
Back in 1990 I reported on this give-away. Neither The Plain Dealer nor any of the hot shot TV news stations touched it. Is that unusual?
Here are some of the facts:
The building, not called for in original plans or lease, cost us $7 million. That included furnishings. Yes, we even furnished it for Jacobs. It cost $900,000. Telephones, desks, computers, etc. All free.
Jacobs, of course, certainly knew the value of such real estate.
Here’s what I wrote in the Free Times at the time:
“Downtown real estate developer Dick Jacobs, of course, knows the value of that Gateway gift. Indeed, Jacobs, owner of the new Society (now Key) Center a few blocks away, asks tenants to pay $38 a square foot in his building. (His Society Center was property tax free, as was – and is – the stadium and the free building. You see rich people are not expected to pay taxes as the rest of us are made to do.)
“If Gateway did the same, instead of charging no rent, the space given Jacobs in the administration building would be worth $2,185,000 a year. With no increase over the 25-year lease that would be more than $54 million in free rent.”
Since 1990, that would have meant more than $30 million to the County. Didn’t happen.
And there’s a perfect table for the new commissioners to meet around.
At Jacobs’ request the County provided an 18-foot by 5-foot boat shaped table for a conference room. That should fit for the 11-member Council. If not, I’m sure it could be expanded.
The table had an ash veneer, according to the plans. I don’t think some of the special treatment asked by Jacobs will interfere with government business. The table called for inlaid wood shaped to replicate the stitching of a baseball.
There might be one problem. The table also called for a metal etching of the racist symbol of Chief Wahoo to be inlaid at each end.
I checked at the time with some firms that make custom tables. One said that with the inlays the cost would be about $10,000 for the table.
Good enough for our certainly new tax-conscious commissioners, don’t you think?
I asked Chema at the time whether he reported this magnificent gift to the Internal Revenue Service. “Absolutely not,” Chema said.
So there’s plenty of room for the commission at no cost in a building we taxpayers built.
The inattentive Plain Dealer offered today (Sunday) three possible meeting places. The cost estimates for the three range from some $687,000 to $1.2 million. The PD story is here:
Time to save some public money. Time for a billionaire family to give back to the community. Time, indeed, for us to assert our public will.
C’mon Matt, you can help. Have a talk with dad.
Gateway’s $3.2 Million Budget Bargain for Teams in 2010
Posted by Roldo Bartimole in Economic Development on February 8, 2010
February 6, 2010… The Gateway Economic Development Corp., the non-profit entity that operates Progressive Field and Quicken Arena, has set a budget of $3,275,873 for 2010.
As a result of Gateway’s near bankruptcy a few years ago the two team owners decided to “save” Gateway from bankruptcy by agreeing to pay operating costs. They now are multi-millionaires Larry Dolan of the Indians and Dan Gilbert of the Cavaliers.
In exchange, the team owners got the entitlement to income from naming rights. It now looks as if the team owners again got the best of the bargain. By far.
Naming rights revenues now easily exceed the operating costs, as we shall see.
Just how good a deal this was can be seen by the naming rights cost at the former Jacobs Field, now Progressive Field. The naming rights bring Larry Dolan $3.6 million a year. (As Jacobs Field in the final years the rate was some $900,000 a year.) See the $3.6 million deal here: http://cleveland.indians.mlb.com/news/article.jsp?ymd=20080111&content_id=2343558&vkey=news_cle&fext=.jsp&c_id=cle
Dolan’s share of the 2010 proposed budget is $1,890,548, according to Gateway. That sounds like less than $3.6 million a year the naming rights produces. Maybe half?
Quicken Loans – also owned Gilbert – uses the naming rights on the former Gund Arena, which at the end of its life was paying some $900,000 a year. Obviously, the naming rights are far more valuable now but not recorded for publication. In essence, Gilbert is paying himself, however he works it for tax purposes.
Team naming rights here originally were to last until 2013 and would total about $14 million at each facility during that period. This revenue would have gone directly to the Gateway Economic Development Corp.
The rescue deal called for each team to pay a portion of the costs of operation. The major cost is property taxes. (As anyone who reads me knows Gateway is tax exempt. But that only applies to the structures. Land continues to be taxed.)
This year the property tax is set for $1,052,271 with $761,851 for the stadium and $290,420 for the arena.
The next highest cost is security for the two sites with $413,974 for the stadium and $401,761 for the arena. Maintenance is another high cost: $326,398 for the stadium; $356,676 for the arena.
The total operating costs of $3.2 million will be shared by the two teams as follows: Cleveland Indians, $1,890,548 and Cleveland Cavaliers, $1,385,325.
So Gateway – and the taxpayers – got the short end again. Or is it still?
Gilbert, owner of Quicken Loans, enjoys a very lucrative deal for the use of the arena. Data show that Cavs fans spend a game average of $317 for tickets, food and trinkets, according to a site that deals with these sporting teams. The fan index cost is for a family of four.
That suggests that Gilbert has gross revenue of some $65 million from the Cavs’ games alone. (Attendance was some 820,000 last year.) He also enjoys the proceeds of all other events at the taxpayer built arena.
Data can be found here: http://basketball.ballparks.com/NBA/ClevelandCavaliers/index.htm
The Cleveland Indians had revenues of some $181 million last year. They spent a little more than half on players. See here:
http://www.forbes.com/lists/2009/33/baseball-values-09_Cleveland-Indians_333426.html
The cost of building the two facilities was some $154-million for the arena and $181-million for the stadium. Another some $40 million went for land and other costs. Some figure that close to 90 percent was tax subsidized.