Posts Tagged Quicken
Gateway Costs Taxpayers $100 Million Plus
Posted by Roldo Bartimole in Economic Development, Politicians on February 6th, 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!
Plain Dealer Gives Free Boost to Gilbert’s Subsidized Restaurants
Posted by Roldo Bartimole in Economic Development, Media, People on October 20th, 2009
October 20, 2009… Well, thank you Plain Dealer for the free publicity. Just what independent downtown restaurants needed – two new publicly-subsidized restaurants in the Quicken Arena to draw business away from other restaurants.
The Pee Dee Tuesday in a prominently displayed Metro front page applauded the opening of two new restaurants by the “Iron Chef” (Michael Symon).
The Pee Dee devoted four columns, eight inches deep with a nice headline: “Symon opens 2 restaurants at the Q,” accompanied by an attractive photo of the business and one of Symon.
“The superstars won’t all be on the court this season at The Q,” sings the Pee Dee. Zip-a-dee-doo-dah, zip-a-dee-ay. My, oh my, what a wonderful day! Plenty of sunshine headed their way.
Now we’ll have a celebrity chef on our subsidy list, too. What can be better in these dark days when so many can’t even find a job?
We – the public – paid dearly for the restaurant facilities at the Quicken Arena and now Dan Gilbert gets the benefit. So when he gets a monopoly casino, he can have more restaurants that compete with the independent downtown restaurant business.
Yes, let’s give it all to the billionaire. Doesn’t it make you feel good?
And remember, these restaurants have the luxury of not having to pay property taxes. Oh, boy. The entire Quicken Arena facilities are tax free! Tim Hagan and Mike White – flying to Columbus in a private corporate plane – got the legislature to exempt all the Q property FOREVER! What fun guys.
And isn’t this exactly what Dan Gilbert will do in the casino he can build if Issue 3 passes – build new restaurants that will attract or keep business from privately-owned restaurants throughout downtown.
Why aren’t they screaming?
Let’s shut down Cleveland street business and force everyone into the Quicken Arena, Progressive Field or Browns Field. Let everything be a sports bar.
Let me tell you again what we gave the sports franchise owners at the Quicken (formerly Gund) Arena. Sammy’s at the Arena has space for 323 guests, 63 at the bar. Didn’t matter that a Gateway board member – Denise Fugo – was given the restaurant business, requiring her, of course, to leave the board.
Here’s what taxpayers helped provide – a $1,841,380 restaurant sporting $178,750 of new furnishings and some $350,000 worth of kitchen equipment. Total bill: $2,370,134.
Remember: No burden of paying those nasty property taxes either.
No wonder Sammy’s says it serves “off-site private residences, yachts, businesses and anywhere else.” Yachts, of course.
Altogether, food concessions at the Quicken Arena cost $6,119,520.
Some of the cost at Sammy’s included 300 restaurant chairs, costing more than $100,000; bar stools at $500 each ($13,500 total); and terrazzo tables at $13,415 each. One sports bar kitchen cost $263,000.
Concession stands with grills and pizza service were well spotted on two levels, I wrote back in 1994, ranging in cost from $62,000 to $132,000 and totaling in cost $1,048,350. The Press, of course, got some special treatment with a banquet kitchen at $121,050. No wonder they’re such boosters and don’t write about the corruptive side of professional sports. Usually, right before their eyes.
Hey, nothing’s too good for our sports heroes and their owners.
The “beer room” (need it cold) cost $63,700. The automatic system for dispensing the beer cost $200,000 and to dispense soda, only $180,000.
There’s a lot more including ice cream outlets at a hefty cost of $198,000.
But when you’re having fun, what’s the difference. Especially when you don’t have to pay. The politicians – all legal, they say – provided major league service – free of charge essentially.
They’ll do the same for the Medical Mart, don’t worry.
The Pee Dee, of course, never told the public any of this. They only cheerlead, they don’t lead.
The Quicken Arena, in addition to Cavs games, has 175 special events during the year, Cleveland promoters tell us. The public, which sprung for most of the dough to build this special place, gets ZERO from the extra events, a gift to billionaires – both the Gunds and Gilbert.
That’s the way our system – free enterprise – works. Free.
By the way, if you can afford these fancy priced places in the Q, you won’t have to bother touching a Cleveland street. You can simply drive to the tax-free Gateway garage because we also provided – at great cost to the City of Cleveland – 1,700 free spaces to the sports owners in the garage for special people.
So when the Pee Dee promotes these new restaurant facilities without telling you the back story, do you think this is professional journalism at its best?
If you do, send a complimentary note to Susan Goldberg, the Pee Dee editor for her and her staff’s fine work.