CLEVELAND, Ohio – Gateway, the landlord of Rocket Arena and Progressive Field, is shuffling funds and issuing IOUs as it waits for officials to secure more sustainable funding—ideally before a new facilities condition report outlines the next round of expenses.
At its regular meeting Wednesday, Gateway’s board approved reallocating about $1.7 million in savings from one project, which updated broadcast equipment at Rocket Arena, toward another project to update escalators, which has run about $2 million over budget.
The transfer still leaves a $330,929 shortfall that Gateway (formally called the Gateway Economic Development Corporation of Greater Cleveland) will need to cover once it receives more funding from the city or county, Executive Director Todd Greathouse told cleveland.com. For now, the Cavaliers are accepting an IOU.
“It will come from other resources that we currently don’t have, and hopefully I can beat the budget again,” Greathouse said.
Gateway also freed up about $160,000 for minor capital repairs at Progressive Field. The money comes from interest earned on a portion of the $40 million bailout from the city and county, which had been set aside for replacing an emergency generator and updating other outdated equipment at the ballpark. Since that money didn’t need to be spent immediately, Gateway placed it in an interest-bearing account, Greathouse explained.
Gateway can now draw on those funds—up to $50,000 at a time—for repairs at Progressive Field without seeking board approval, Greathouse said.
In addition to these newly available funds, Gateway has about $1.1 million remaining in its minor capital repairs budget, said Samantha O’Neil, manager of special projects and budgets. The other $1.4 million has already been committed to projects such as replacing stairwell handrails, making concrete repairs, and fixing plumbing—an ongoing issue at the ballpark.
“There’s 30-year-old pipes that are just failing left and right,” she said.
Meanwhile, Gateway is preparing for an updated facilities condition assessment, due in the next couple of months, which will estimate future repair and replacement needs for both venues. Greathouse said the findings will shape Gateway’s funding needs going forward.
Under current lease agreements, Gateway is responsible for all repairs at Progressive Field and for any repairs exceeding $500,000 at Rocket Arena.
Cleveland and Cuyahoga County officials continue to debate how to cover those increasing costs without constantly tapping their general funds. County Executive Chris Ronayne previously
advocated to expand the county’s sin tax
on alcohol and cigarettes—which hasn’t been adjusted for inflation since its inception in the 1990s—to boost stadium funding. The state recently cleared the way for such an increase.
However, Ronayne has since
said he will not pursue it
, citing concerns that the revenue wouldn’t be enough and that some of the funding would benefit the Browns in their move to Brook Park, which he opposes.
And it’s not just the stadiums that need more money. Gateway’s board was recently asked to consider pay increases for Gateway staff. Draft legislation did not list what the added cost would be, and after an hour of discussion in executive session at the June meeting, the board decided to table it. But the conversation is expected to resume at a later date, Greathouse confirmed.
Any pay increases would have to be funded from Gateway’s operating budget, which comes from rent payments made by the teams. But that account is currently projected to end the year with a $45,000 deficit, according to Controller Paul Valvoda. He attributed most of the overage to unexpected concrete repairs after the harsh winter.
He characterized the shortfall as “modest,” given the total $5.6 million operating budget, but said it still represents an “increasing loss” — a nicer way to say deficit.
Gateway Economic Development Corp.
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