Cleveland City Hall is laying out its economic case against a Browns move across city lines to Brook Park.
A departure of the NFL franchise to the suburbs could cost Cleveland $30 million in annual business activity and $11 million in tax revenue, the report said. The 36-page report argues that a team relocation would compete with other venues and hamper downtown Cleveland’s recovery from the pandemic.
The study also questioned whether – in a shrinking county that already hosts big retail and entertainment districts such as Crocker Park and Pinecrest – there’s enough demand for a new Browns village in Brook Park.
Mayor Justin Bibb cited the report in his October news conference admonishing Browns’ leadership for making plans to leave downtown. The city released the study Tuesday in response to a public records request.
“Many downtowns have focused on tourism, hospitality, and entertainment as part of their recovery strategy to compensate for the decline in purchasing power from the daily office workforce,” the study said. “The Brook Park Stadium plans would be contrary to these types of efforts and momentum.”
The city’s study was prepared by Econsult Solutions Inc., a Philadelphia-based firm that the city also hired to study the impact of closing Burke Lakefront Airport. Econsult Solutions produced the study for the law firm Squire Patton Boggs, which is advising City Hall in its Browns negotiations.
Browns owners Dee and Jimmy Haslam have argued that building a $2.4 billion roofed stadium in Brook Park would be “transformative” for the region and the state. Renderings of a proposed domed Huntington Bank Field show the facility surrounded by new developments and parking near Cleveland Hopkins International Airport. The team hasn’t yet publicly laid out a financing plan for a new stadium.
The team has produced numbers of its own that it argues underscores the Browns’ regional impact. Last year, Browns’ spokesperson Peter John-Baptiste told Signal Cleveland that the team estimates stadium events generated $225 million in spending in 2021.
What’s in the $30 million?
The study estimates that Huntington Bank Field visitors spend around $58.6 million a year on costs tied to football games and other stadium events. Of that, around $29 million goes to transportation – gasoline, parking, public transit and rideshares. The other costs are food and beverages, retail and lodging.
That spending generates $100.3 million of economic impact in Cuyahoga County – of which $29.5 million is in the city of Cleveland, the study estimated. Of that nearly $30 million, $14 million went to compensation for about 360 jobs.
Compared to the county’s overall economy, that’s not very much money. Cuyahoga County’s gross domestic product in 2022 was estimated at $121 billion by the U.S. Bureau of Economic Analysis. That would put the stadium’s economic impact at 0.08% of the county’s economy.
Nevertheless, the city’s study argues that a Brook Park stadium would siphon demand for housing and retail away from downtown Cleveland. A new stadium would also compete for events with Rocket Mortgage FieldHouse, the downtown convention center and the I-X Center, the study said.
Although the downtown population has boomed, the office market was weakened by the pandemic and the region as a whole is barely growing, the study said.
“With the continued uncertainty of the office market in the post-pandemic era, downtown areas nationally continue to recover and redefine their economic purpose,” the study said. “The continued loss of market support for retail and storefronts would have adverse spillover impacts leading to declining conditions, increasing storefront vacancies, and negative perceptions from visitors.”
Cleveland tax losses
The study estimates that the stadium generates between $10 million and $11 million in tax revenue for the city each year. That money breaks down this way:
- $8 million in admission taxes
- $900,000 in Browns’ income taxes
- Nearly $800,000 in property taxes
- $400,000 in parking taxes
- $300,000 in income taxes from on-site contractors
- $300,000 in hotel bed taxes
- $275,000 in income taxes tied to visitor spending
The study appears to mistakenly list the stadium’s entire property tax bill as revenue for the city. In fact, stadium property taxes are mostly a city expense, not income. (Technically, the taxes are collected on the land beneath the stadium; the building itself is exempt from property taxes.)
The City of Cleveland – not the Browns – pays nearly $800,000 in taxes on the property each year. Most of that money goes to the school district and only a portion comes back to the city’s General Fund. Even if the Browns were to move, Cleveland – as the property owner – would have to continue paying taxes on the stadium land.
Cleveland’s current stadium costs are roughly the same as the estimated income. This year, the city is scheduled to make another $7.3 million payment on the debt incurred to build the stadium in the late 1990s. That debt will be paid off by the end of the Browns’ lease in 2028.
On top of that, the city has budgeted $750,000 in insurance payments, plus the nearly $800,000 in property taxes. Cleveland also pays to repair the stadium using revenue from the countywide alcohol and cigarette tax.
In August, the Bibb administration publicly offered $461 million over 30 years for a renovated downtown stadium. The terms included $367 million for a stadium overhaul and $94 million for repairs.
