What happens with The Q project now that Cleveland Cavaliers backed out?

Updated: Aug. 29, 2017 at 2:14 PM EDT
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CLEVELAND, OH (WOIO) - Now that the Cleveland Cavaliers have pulled out of paying for half of the Quicken Loans Arena Transformation Project many are asking about what happens next.

The project was supposed to cost $140 million. The Cavs had agreed to pay $70 million.

The public's portion of the other $70 million was to be paid for with taxes made off of tickets sold to events at The Q and the taxes charged on hotel stays in Cuyahoga County.

Here is how the Cavs website broke down who would pay for what:

$70 million in funding paid by the Cavaliers organization by way of increased rent to Gateway and extending the team's lease through 2034.

$70 million in bond funding will be paid from per-existing, self-generating funds and destination facility sources:

Admissions Tax: Continuation of the existing portion of 8% of every ticket sold to every event at The Q to the City of Cleveland, which in turn shares that with Cuyahoga County. The Cavs have now committed that for every dollar of Admissions Tax that goes to the Q Transformation debt, another dollar will go directly into the City's General Fund that would be available to address critical community needs.

Sales Tax: The amount generated above the existing level of the 1.25% County sales tax proceeds on all taxable purchases at The Q.

County Bed Tax: A portion of the County Bed Tax, which is paid for primarily by visitors from outside Cuyahoga County.

County Destination Facility Reserve: Resources dedicated for the Hilton Hotel project that were unused are being re-allocated to The Q, another destination asset.

Sin tax dollars will not be used on the Transformation.

Several people were critical of the plan, already passed by the county, saying the use of tax dollars could be better spent in neighborhoods and not downtown.

The opposition was able to generate enough signatures to possibly force a referendum to let the public vote on whether or not to publicly fund the project.

In a release from the Cavs the referendum was the very reason they have pulled out of the project saying, "Time delays due to 'referendum' attempt make project unfeasible."

There are now several questions people have. Here what we can answer at this point.

Yes. With the Cavs not willing to pay for half of the project it is extremely unlikely the city will pay the full amount or get some other private funding source to pay for the project?

No. According to a Tad Carper, spokesman for the Cavaliers, nothing in the original plan will be implemented. This includes extending a lease through 2034. The current lease is up in 2027.

In the plan the Cavs had agreed to, "Rehabbed 40 gym courts and floors in the city of Cleveland's rec centers and all Cleveland Metropolitan School Districts high schools."

Because the Cavs are scrapping the whole plan, the renovations of the 40 courts will not happen.

The Cav will continue to help the community in several ways as they pointed out in its news release. "Substantial investment in the development of downtown and Cleveland's neighborhoods. This includes a deep commitment to fighting blight, including the organization's lead role in securing over $60 million of Federal Hardest Hit Funds for blight relief for Cleveland and Cuyahoga County, and donating over $1 million of support to the efforts of the Greater Cleveland Habitat for Humanity. The recently announced $1 million dollar donation to support Cleveland and Akron public school S.T.E.M. programs."

The referendum vote was still in the hands of the Cleveland City Council that would have needed to vote to get it either on the November ballot, or spend close to a million dollars to hold a special election possibly in May of 2018. A vote on this seems very unlikely going forward.

According the Cavs, "The Cavaliers organization will no longer participate in the partnership formed for The Q Transformation project and the need for a referendum no longer exists."

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