CLEVELAND \u2014 Two state agencies are raising questions about whether a $600 million investment in a new Cleveland Browns stadium will be a good deal for Ohio and its taxpayers.<\/p>\n
In a memo released Monday, the nonpartisan Legislative Service Commission warns that the team\u2019s predictions about traffic and events at a new, domed stadium in Brook Park might be \u201coverly optimistic.\u201d<\/p>\n
In a separate letter, obtained by News 5, the state\u2019s budget director says her office does not support a plan to issue $600 million in bonds for construction.<\/p>\n
The documents show that state policy analysts have big concerns about the public\u2019s proposed role in the $2.4 billion stadium project. They\u2019re skeptical about the Browns\u2019 math on everything from construction jobs to spending at the 176-acre planned stadium district, where renderings also show apartments, hotels, offices, restaurants, retail and parking.<\/p>\n
Team owner Haslam Sports Group \u201cinappropriately overstates projections of future taxes generated by the project, over-inflating positive impacts,\u201d wrote Kimberly Murnieks, the state\u2019s budget director, in a letter addressed to other public officials last month.<\/p>\n
The Browns pushed back late Monday, with a point-by-point response to the budget office\u2019s report. In an emailed statement, the team also challenged the Legislative Service Commission\u2019s analysis, saying it contained inaccuracies and misinformation.<\/p>\n
A Browns spokesman said the team has already addressed many of the agencies\u2019 concerns in direct conversations with Gov. Mike DeWine and other officials.<\/p>\n
\u201cWe question many of the memos\u2019 assertions and have worked with our team of national experts to prepare relevant information and responses,\u201d Peter John-Baptiste, the team\u2019s chief communications officer, wrote in an email.<\/p>\n
\u201cWe understand and welcome Governor DeWine\u2019s commitment to creating a responsible funding mechanism for sports facilities across Ohio, as he has consistently communicated the positive impact Ohio\u2019s teams and their venues have on the state,\u201d he added. \u201cWe look forward to more ongoing, collaborative dialogue with the governor and other state officials to create the best solution to bring our transformative project to the state and Northeast Ohio.\u201d<\/p>\n
The General Assembly is considering a proposal to borrow $600 million for the Brook Park stadium. The state would repay that debt, with interest, using tax revenues from the entire mixed-use stadium district.<\/p>\n
The total cost to the state could approach $1 billion over 25 years.<\/p>\n
Browns reveal more details about Brook Park plans in a pitch to state lawmakers<\/p>\n
RELATED: Browns reveal more details about Brook Park plans in a pitch to state lawmakers<\/a><\/p>\n The Browns say Ohio will more than recoup its investment in the project. But state policy analysts \u2013 and financing experts interviewed by News 5 \u2013 say it\u2019s impossible to properly vet those claims.<\/p>\n They want to see the assumptions and math behind the team\u2019s headline numbers.<\/p>\n Draft budget amendment is tailor-made for the Browns, shuts out the Bengals<\/p>\n RELATED:‘No more pretty pictures’: Finance experts, lawmakers ask Browns to explain their math<\/a><\/p>\n \u201cThe academic literature on publicly funded sports stadiums is vast, covering many decades, sports, states and municipalities,\u201d staffers at the Legislative Service Commission wrote in their memo. \u201cThe overwhelming conclusion from this body of research is that there are little to no tangible impacts of sports teams and facilities on local economic activity. A second conclusion is that the level of government subsidies given for the construction of facilities far exceeds any observed economic benefits when they do exist.\u201d<\/p>\n The state budget director, meanwhile, wrote that Haslam Sports Group\u2019s forecast for construction hiring seems \u201cwildly overblown.\u201d<\/p>\n She added that the state is facing many large capital projects \u2013 public buildings and infrastructure \u2013 and \u201cdoes not have the capacity to accommodate these priorities plus $600 million in bonds for a single sports facility.\u201d<\/p>\n ‘An incredibly huge decision’\u00a0<\/p>\n The Ohio House included the bond package in its version of the biennial budget bill in early April.<\/p>\n At the time, Rep. Brian Stewart, an Ashville Republican who leads the House finance committee, called it \u201cthe most conservative stadium funding proposal in America.\u201d<\/p>\n He said the state has a long history of issuing bonds for major projects, as part of its capital budget bill. Stewart added that the Browns\u2019 plan is \u201cbacked up by detailed financial metrics under which the new tax revenue generated by this project will pay the cost of the bonds, with no out-of-pocket expense for our taxpayers.\u201d<\/p>\n On Monday, Stewart said he was not available to talk about the concerns raised by state policy analysts.<\/p>\n The memos released Monday show that the budget office raised its concerns about the stadium financing plan weeks before the House voted on the budget.<\/p>\n Now the debate over the budget \u2013 and stadium funding more broadly \u2013 has moved to the Senate, which expects to vote on its version of the mammoth spending bill by mid-June.<\/p>\n After that, the chambers will hash out any differences between their versions. The final budget needs to go to DeWine\u2019s desk for his signature \u2013 and any vetoes \u2013 by June 30.<\/p>\n The governor favors a plan to double the tax rate on sports-gaming companies’ profits to pay for stadiums and youth sports education.<\/p>\n DeWine proposes using some of the money sports bettors lose in Ohio to help pay for new sports stadiums<\/p>\n RELATED: DeWine proposes using some of the money sports bettors lose in Ohio to help pay for new sports stadiums<\/a><\/p>\n Sen. Nickie Antonio, the chamber\u2019s minority leader, recently asked the Legislative Service Commission to weigh in on the Browns’ proposal. The Lakewood Democrat released the agency’s memo Monday.<\/p>\n During an interview, she said the analysis just leaves her with more questions and concerns.<\/p>\n \u201cWe\u2019ve been asked to make an incredibly huge decision. \u2026 That\u2019s a lot of money to be able to be working off the back of a napkin, which is what this feels like sometimes right now,\u201d she said. \u201cSo any time that we can add to the information about this for our decision-making, I think it\u2019s really important.\u201d<\/p>\n Antonio wants clarity on what will happen if state tax revenues from the project fall short of covering the debt payments. The House budget bill requires the Browns to put up $50 million as a sort of security deposit \u2013 money Haslam Sports Group would get back if the state doesn\u2019t need to tap it. But Antonio isn\u2019t sure that\u2019s enough.<\/p>\n She\u2019s also worried about the impact a Brook Park stadium could have on Cleveland.<\/p>\n \u201cTo cannibalize and gut the city of Cleveland, and take these resources away, I don\u2019t think serves anyone well,\u201d said Antonio, who represents much of the city.<\/p>\n The Browns also want Cuyahoga County to issue $600 million in bonds for the project. But County Executive Chris Ronayne has said that request is far too large \u2013 and too risky for the county and taxpayers to take on. He’s been urging the Browns to stay Downtown.<\/p>\n ‘Not simply a world-class stadium’<\/p>\n Until this week, the only economic-impact reports about the stadium came from the city of Cleveland and the Browns.<\/p>\n A study commissioned by the city last year said losing the team would be a blow to a fragile Downtown, where fans spend money on transit, hotels, bar tabs and restaurant bills. The report also said an enclosed suburban stadium could siphon events away from Rocket Arena and other Downtown venues.<\/p>\n A Browns move to Brook Park will deal an economic blow to Cleveland, study says<\/p>\n