Schumann's Cleveland Pages archives

This archive article is selected from The Cleveland Pages, the city's only weekly independent journal of politics and opinion on the Internet. Find out all about the Cleveland Pages here, or check out the current issue.

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The Cleveland Pages is a somewhat-weekly commentary on what's new and why it's all happening in Cleveland and Cuyahoga County. If what you read here is upsetting, you might prefer this simple-minded happy-talk instead.

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DUH! (23 August 2002)

Recent fans of NBC's Saturday Night Live shows will remember Norm MacDonald's news anchor character in the "Weekend Update" segment. Who can forget gems like:

A person who suffers two sharp, powerful blows to the head within a short period of time can suffer brain damage or even die, according to a new study in the medical journal, DUH!

Well, that about summarizes recent news coverage of Cuyahoga County's budget deficit and looming cash flow problem. Norm MacDonald might have said: "Urban rust-belt counties with high rates of unemployment and poverty, who burden their operating budgets with expensive gifts to real estate developers and big-league sports team owners, tend to run out of money when the national economy slows... this from the business and economics journal, DUH!"

Many factors combined to create the deficit, but we can't ignore the $8 million per year the county has poured into Gateway to cover its ongoing operating and debt repayment shortfall. The cost to county taxpayers, from the county's general operating fund, now exceeds $72 million--money that could have funded county programs or been left in the hands of innocent taxpayers who had nothing to do with the ripoff that Gateway was always known to be. And let me repeat the word "always" because some media people seem to have trouble with it.

A front-page Plain Dealer article this August 12th, titled "Tribe's troubles could cost county," made the disingenuous claim that "Gateway's troubles were never expected. In fact, supporters believed the project would be so successful that it would not only pay its own bills but also pick up the county's debt obligations."

That's not just contrary to fact; it's crazy. No person of any common sense and integrity was saying anything like that at the time the Gateway project was discussed and its notorious sin tax passed. Insider dealing with Indians management resulted in an agreement for no rent at all on the team's first 1.85 million tickets per season--that's an average attendance of 22,840 (Jacobs Field seats only 43,345) at each of the 81 home games in the regular season. In years where the stadium averages a little less than half full, the Indians pay no rent. If the team's win-loss record remains around .400 in future seasons, count on it.

The rent situation with the Cavs, anchor tenants in Gund Arena, is even worse for taxpayers. Gordon Gund still claims that Gateway owes him seven million dollars for capital expenses he applied to the property, and rent has never been paid on the facility.

The leases that created this cash-flow crisis for Gateway were known to the public nine years ago! Gateway's typical annual expenses are around $3 million for taxes and maintenance, which is hardly unexpected. Rent for the Indians cannot exceed about a million a year, best case; and in the early 1990s nobody would have assumed the team would have 455 consecutive home-game sellouts! Counting on more from the ever-beleaguered Cavs made even less sense--they've been uncompetitive in the NBA for decades now.

So Gateway received, by contract, on the two major properties on its site: either very little rent, and that for just a few years, or no rent at all for a long time in the future. Let's not consider the possibility that Gordon Gund might sell the Cavs franchise, settling the outstanding lease for an estimated $50 million, leaving the Arena with neither a major tenant nor realistic prospects for one. (Does Arenaball count? It's fun but does it pay the bills?)

The math doesn't add up now. But it never did. For Plain Dealer reporter Joan Mazzolini to call the ten years of deficit spending at Gateway unexpected is incredibly naïve or deliberately misleading.

Like, duh.

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