The Cleveland Cavaliers NBA Basketball team have announced they have withdrawn their commitment to a $140m regeneration of the publicly-owned Quicken Loans Arena.
The project would have, among other things, upgraded one of the oldest arenas in the NBA, made it more competitive for the long term with other nearby midwestern cities and national venues to maintain and attract additional events and created more than 2,500 project-related construction jobs but say time delays due to a referendum attempt make project unfeasible.
Construction on the $140 million publicly-owned facility project was to have started this past June, but had been delayed due to a prospective referendum being placed on the ballot by the Washington, DC-based Metro Industrial Areas Foundation represented locally by a group calling themselves the “Greater Cleveland Congregations” (GCC), Service Employees International Union District 1199 and the Cuyahoga County Progressive Caucus.
The prospective referendum causes the groundbreaking of The Q Transformation to miss the current construction cycle, which pushes the overall price tag of the project higher due to rising construction costs. In addition, a time sensitive financing package that included historically low interest rates would be negatively impacted by further delay due to a prospective referendum exposing the project to an expected higher interest rate environment.
The public friendly public/private partnership was to be funded with $70 million of private capital contributed by the Cavaliers organisation and an additional $70 million in public funding was to be generated primarily by a portion of the existing Admission Tax of every ticket sold to every event at The Q from 2023-2034 and a portion of the existing Cuyahoga County Bed Tax which is paid predominantly by visitors from outside of the County, many of which are attending events at The Q, as well as other sources either directly generated or largely impacted by The Q. The Cavaliers had also committed to covering any and all construction cost overruns on the project.