“We’re excited for the opportunity to be part of the conversation about downtown re-development,” Browns co-owner Dee Haslam told ESPN a few weeks ago, confirming rumors that the team has begun initial discussions about a new stadium at a new downtown site or major renovations on the current facility. “We should be part of the conversation in a bigger way, and I think we will be. I have no idea at this point what’s even feasible. Don’t you think it’s a good idea for us to learn and figure that out?”
Haslam said a lot without saying much at all during the interview, talking in circles while avoiding any specifics except noting that, yes, the Browns current lease at FirstEnergy Stadium runs out in 2029 and they felt now was the time to begin planning.
But planning for what? Deciphering what Haslam actually meant when she said the team wanted to get in on the urban development game means looking at what’s going on among other professional sports owners in various American cities in the last few years. Because things have changed.
It used to be fairly simple for sports teams and their public subsidy handouts: get a new stadium, have most if not all of it paid for by taxpayers, and then sell luxury suites, sponsorships, tickets, hot dogs and beer to make their nut. But in the past few years, NFL teams have upped the ante on what they “need,” mainly 100 or more acres of land around the stadium fit for parking lots and development.
The New England Patriots, for instance, are doing a 300-acre development around their stadium in Foxboro, MA, and the Los Angeles Rams and Chargers are moving into a $2.6 billion stadium at the center of a 300-acre development in Inglewood, CA. The Oakland Raiders are moving to Las Vegas with a similar deal. And Cowboys’ owner Jerry Jones got two deals in Dallas: he got the huge stadium and 25,000 parking spaces around it in Arlington, and then a 100-acre training facility and property development in suburban Frisco.
The latest deal, sounding much like what the Browns seem to be going after, is one for the Jacksonville Jaguars that was announced last month. The city and the team are close to finalizing a $2.5-billion development of 70 acres of an old shipyard and park around the stadium on the adjacent waterfront. While final numbers aren’t hammered out yet, the multi-phase project will be overseen by the team and include about $750 million in public cash.
Economists sometimes get lost in the weeds trying to explain the unique ways of rich people and how they, despite being rich, need the public’s cash to do wonderful things for the public. But Michael Leeds, chair of the economic department at Temple University in Philadelphia and noted sports business expert, said he could explain this in terms that the Muni Lot pre-game corn-holers and beer guzzlers would understand.
“Every parent goes through this type of thing and knows the deal,” he said. “You ask your kid what they want for their birthday, and she might say, ‘I want a pony.’ You ask her why and she says the kid down the street has one. Most of us figure out a way to ignore what she wants and get her something else.”
But the Haslams and their ilk aren’t your daughter, who, while entirely adorable and brilliant, doesn’t have much leverage on her side. Teams have long since figured out that they have multiple cards up their sleeves in the debate.
“They are asking for this because they think they can get it,” Leeds continued. “Since the great recession, teams have been a little more hesitant to open up their wallets, but also to ask governments to open up their wallets too. But we are seeing this shift a bit now. They are re-thinking and re-packaging what they want, and are asking for not just this, but this and this and this too.”
FirstEnergy Stadium is coming up on 20 years of age, and the Browns are tied to staying there for ten more years. Local government agencies have always found ways to keep the public cash flowing for Cleveland sports, but the proposition is a bit different this time.
In ten years, we’ll probably be in the midst of discussions about a new ballpark, if not a new arena too, even with the Q renovation project. The city’s coffers aren’t deep, and the county has just about maxed out its credit card. Sure, the quarter-percent Cuyahoga County sales tax increase passed in 2007 to pay for the $450 million convention center and medical mart is set to expire in 2027 and one could imagine officials selling the idea of continuing it for another 20 — not a new tax! — as the public contribution for any new project, but that’s pure conjecture at the moment.
For the time being, it seems everyone, for once, is being cautious about the idea of dumping taxpayer dollars into Haslam’s pockets.
“While there are always discussions about new development opportunities, the City has not been and is not currently engaged in any formal planning relative to a new or remodeled stadium. That stated, the city welcomes the Browns’ participation in any city development efforts,” a city of Cleveland spokesperson said in a statement clarifying that while informal conversations have certainly happened, nothing formal has been discussed.
The second half of the statement got more directly at the heart of why the ball is in the Browns’ court.
“The city of Cleveland welcomes anyone who wants to participate in the economic development of our neighborhoods and our downtown,” it read. “The question as it pertains to the stadium is whether this project is feasible, supported by private dollars. This is ultimately a choice for the people.”
While it’s nice that Mayor Frank Jackson gave a head nod toward a decision made by the people (which runs contrary to his whole position on the Q renovation project, it should be noted), and while Dee Haslam said basically the same — “I really do think [it] would be a decision by the people of Cleveland and the planners. I think what we need to do is be part of the conversation.” — the question of who pays for what might be entirely ancillary to the real question of whether it’s even possible to carve out what the Browns really want from limited space in downtown Cleveland. Especially because of what the Browns likely want it for.
Cowboys’ owner Jerry Jones has about 20,000 parking spaces around “Jerry World.” That means about $15 million a year in his pocket. The same goes or will go for the Patriots, Rams, Charges, Jaguars and possibly the Buffalo Bills.
The Oakland Raiders’ deal with Las Vegas is close to 120 acres for the stadium and the training facility. The $1.9 billion bill for the stadium will be split among a $750 million public contribution from increased room tax revenue, $500 million in a combination of NFL loans (some are repaid, some are gifts), naming rights and seat-license sales from the Raiders, and the rest in a bank loan.
Basically, the Browns are telling Cleveland, hey, look at all the cool ponies our friends got. In this case, ponies are parking lots, housing, restaurants and offices.
The Browns seem intent on being downtown, at least given what Haslam told ESPN, and the problem with all this, then, is that there are few options in downtown Cleveland that satisfy those needs.
First and foremost, the Browns have just 35 acres at the current stadium site, far, far less than other NFL teams now lay claim to. And the current site doesn’t provide many options in terms of a footprint expansion: It’s boxed in by Lake Erie on the north, railroad tracks on the south, the port authority to its west, and museums and Burke Lakefront Airport to its east. Meaning there’s no room to get more team-owned parking or much of any new development around it as things currently stand.
That’s why doing the current stadium in ten years make little sense for the team economically. Yes, a major renovation involving a dome or retractable roof would mean more events, but without parking and new development around it, those added events won’t increase profits for the team all that much.
There are 18 acres of old port property between the current stadium and the lake, but that property has already been assigned to Cleveland and Dallas development firms to develop. The Browns know those 18 acres are not in play, probably.
“We are acutely aware of the previous and ongoing discussions related to potential lakefront development,” they told Scene last week.
The city was equally vague but also less enthusiastic in their statements above.
So what about building a new stadium downtown, with the ability to get about 100 acres around it? That too is very dicey as things look now, as almost no such property exists within the Inner Belt box we now call downtown.
Outside that box, maybe. But again, not enough acres in good locations to make much of a difference. The Flats would be a no-go. The area north of Cleveland State University – between the inner belt freeway and East 55th Street and St. Clair Avenue — does have about 1,400 acres. That is enough for a stadium and parking and lot of other buildings. But that area is a bit removed from downtown, and would have to create its own little trendy fiefdom to market.
Another big question, whether on the renovation or new-construction front:
Is the Cleveland market large enough to support a domed facility? Not for what it means for NFL games, but whether the market is there for other events (college football, concerts, NCAA March Madness, etc.).
Only two of the NFL’s 32 cities have lost regional population since 2010 – Cleveland and Pittsburgh. Cleveland is also second from the bottom in poverty level, household income, and property value. We are not just talking about Cleveland proper here; we’re using the “metropolitan statistical area” data where the Cleveland area’s 2.1 million population ranks as the 24th largest market in the NFL.
“Football stadiums are more challenging than arenas because of the events that you can have in them,” said Mark Rosentraub, a University of Michigan economics professor who formerly was at Cleveland State. “What is the demand for an urban place-making space like a domed stadium would be in Cleveland? I don’t think many concerts would go to a big domed stadium because they have Dan Gilbert’s Quicken Loans Arena.
“So there are lots of unanswered questions Cleveland has to figure out on this,” Rosentraub continued. “Is there available land in the downtown area that is unused and the city wants to do something with the Browns at, and is the market big enough now to justify public investment in such a development plan? In some markets these stadium development plans are sustainable, but in other markets they are not.”
But then, of course, many want to consider the big elephant in the room: Burke Lakefront Airport.
Burke has been around for about 70 years and its use by private airplanes has fallen off the cliff in the last decade. It had about 100,000 takeoffs and landings in 2000; last year that number was 38,000. Scene explored the issue about whether the airport could be closed or not at length in a cover story last month.
When news about the Browns interest in doing downtown development tied to a new stadium hit, Twitter and other social media exploded with Cleveland Browns’ fans solution: just close Burke and put the stadium and the assorted desired developments on the 450 acres on Lake Erie just north of the Muni Lot.
“So many people think the solution to all this is to just drop a new stadium at Burke, give the team the 450 acres around it, let them develop it and have us fund it, and everything is solved,” said a current city councilman who didn’t want his name used. “But we all know it is not that simple.”
That is an understatement about the simplicity of closing Burke and re-using it for a sports stadium development. What people have to realize is that the federal government (through the Federal Aviation Administration) runs the national airport system the same way the Department of Transportation keeps an eye on interstate highways. What that means is that a city cannot just decide to close an airport for the same reason the City of Cleveland could not just tell the feds they want to close I-71 between downtown and Hopkins airport for some reason.
But, wait, didn’t we tell you a few weeks ago that not only is closing Burke prudent, but possible? Yes, but…
It can get real complicated to get the FAA to close any airport. First, they require airports to stay open for at least 20 years after they got their last federal grant. In this case, Burke received money in the past year, so under the agreement with the Feds, theoretically the airport would have to stay open as an airport until at least 2037. That timeframe can be negotiated, but it takes the willpower of local and state officials to get it done, something that currently isn’t in the picture.
The city would also have to do studies saying they don’t want the property used as an airport anymore, and give the reasoning why they don’t. (The last Burke study was done in 2007.) The FAA usually requires airport owners like Cleveland to show they have consistently wanted to close their airport for some time before they even consider a closing, and Cleveland has consistently – even as recently as two years ago – praised Burke as an airport and contended they need to expand the runways and build new hangers to make it even better for the city and the region as an economic development driver.
In effect, you can’t tell the FAA you think the airport is fantastic for the city and then suddenly turn around and tell them what you have been telling them isn’t true. At the very least, making such a switch takes a long time to get the FAA to buy in, and certainly the time frame of ten years, which the Browns seem to want as the timeline for their new stadium and development projects, doesn’t seem feasible.
Case in point: The Santa Monica Airport in southern California, which is similar to Burke as a secondary airport in the region, has now gained approval by the FAA to close in 2028. But they first started the process in the late 1980s, and have had to fight with the FAA and pilots groups and the airline industry to get this done.
In the end, the FAA usually wants one more thing that relates to this issue. It usually frowns upon the airport property just being transferred to a private entity without just compensation, if that is part of the closing request. So Cleveland, more than likely, might be able to get their airport closed in 20 years, build an airport after that, but not be allowed to give the acreage round the stadium to the Browns for development.
Again, the key term is “not likely.” Closing Burke is possible, yes; probable, no. Setting it up for a real estate development run by the Browns even less probable.
All of which makes this posturing by the Browns something that will be interesting to watch.
“The way these ideas might work is if you put the new stadium and the development in an underutilized area and hope the project jump start development in that area,” said Vic Matheson, a sport economist expert and professor at College of the Holy Cross in Massachusetts. “But that rarely happens because the purpose of the sport teams is to make money for themselves and not develop underutilized areas.”
Matheson continued: “If you want to spend a billion dollar to move a stadium a half-mile to Burke, go ahead, but it does not make much sense economically to do so. But cities do a lot of spending on sports teams that doesn’t make much economic sense.”
Published at Wed, 16 May 2018 05:00:00 +0000