Monday, August 21, 2006

Cavs Want In on Corporate Handouts

Well well well! The Cavaliers have joined the likes of Ford and OfficeMax by demanding public dollars to finance their for-profit business. The PD reports that Cavs officials met with city officials (including Commissioner Dimora) to present ideas for sprucing up Gund Arena (oops! I mean "The Q"). Though Cavs officials hesitated to name their price, County officials estimated the improvements (which will include "enhanc[ing] the fan experience and the arena's function") at $30 million.

Here's a quick review of who owns and operates what: The Gateway development corporation, funded by public bond funds from the county, owns The Q and Jacob's Field. Gateway, in turn, leases The Q to the Cavaliers. The Cavaliers, writes the PD, are 11 years into a 33-year lease.

So the Cavs want $30 million for arena improvements? For comparison's sake, let's consider how much taxpayers have already spent on building the Gateway complex to begin with! Take a look at this Schumann's link for a great brief history of the Gateway project; also see here for more. The long and short of it is that taxpayers spent around $150 million for original construction of The Q. Surely $150 million should be enough to satisfy any large-scale business seeking to operate in a major American city!

But in an era where sports teams feel perfectly free to demand huge public subsidies in exchange for the "locational loyalty" (see here, here, and here), I guess the Cavs demand isn't so outlandish. Maybe the city should consider throwing more dollars at the NBA team, given that the region's less important problems probably wouldn't even know what to do with a sudden infusion of a cool thirty million. Maybe the county treasury should simply be opened up for corporate raiders!

Or maybe we can finally say "No!" to the idea that the public budget's primary purpose is the subsidization of the private sector. If the Cavs really think their business merits improvements, they should issue corporate bonds, borrow on existing lines of credit, or raise ticket prices. In fact, I imagine there are a whole host of licensed financial advisors ready to help the Cavs solve their problem.

In the meantime, let's try not to let the public get squeezed even more so that Dan Gilbert can move up another tax bracket.

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