The Cleveland Browns NFL team has proposed a funding model for its planned new stadium in Brook Park, with almost $1.2bn (£953m/€1.1bn) of public backing being sought.
The Browns currently play at Huntington Bank Field in Downtown Cleveland, but the team is planning on building a new stadium in Brook Park, some 15 miles away.
Last month, the Browns stepped up efforts to relocate to the new domed stadium by advancing a land purchase agreement. The agreement covers a 176-acre package of land for the new stadium and an adjacent mixed-use development.
On Thursday, Haslam Sports Group (HSG), the Browns’ ownership group, met to discuss the financial proposal and the decision to pursue the stadium and mixed-use development project. The stadium portion of the project is projected to cost about $2.4bn, with HSG seeking a 50-50 public-private partnership.
The private funding is worth $1.2bn, as well as any cost overruns. HSG is seeking almost $1.2bn in public funding, which would comprise three components: the city of Brook Park, Cuyahoga County and the state of Ohio.
The project calls for bond-financed contributions of $422m from Brook Park, $178m from Cuyahoga County and $600m from the state, which would be paid back with tax revenue primarily generated by the project.
The Browns claim that the funding model does not use any existing tax revenue sources or take away from current public uses, and will instead leverage the new tax revenues of the project to create up-front proceeds and excess that can be used by public stakeholders.
Cuyahoga County is primarily being asked to leverage its strong credit and issue bonds that will be repaid by the project-generated Brook Park revenues, along with potentially two new county taxes on visitors to the region – the 1% incremental bed tax and a rental car surcharge.
At city level, the Browns said the year-round impact of the new stadium will provide Brook Park with the capacity to benefit from nearly $1.8bn in fiscal impacts over the initial 30-year lease. The biggest portion of these fiscal impacts is admissions tax, which the team states will be enhanced by an agreement to increase Brook Park’s current 3% rate to 6.5%.
In terms of state funding, the Browns are asking Ohio to “borrow its balance sheet” to maximise the impact of the taxes generated by the project and Browns operations. The team claims this model differs from what has been previously asked of states for similar projects in the past.
The project is set to create 5,400 full-time permanent jobs and 6,000 construction jobs. Real estate consulting firm RCLCO has projected $1.3bn in annual economic impact.
Last month, the City of Cleveland filed a lawsuit against the Browns over the team’s proposed move to Brook Park. The lawsuit alleged that the Browns are violating state law and their contract agreements with the city by pursuing the move.
The Browns have been exploring the prospect of building a new stadium or renovating Huntington Bank Field since 2017, with the team’s lease at the venue expiring in 2028.
