Just weeks after an Ohio State Supreme Court ruling forced a public referendum on whether the Cleveland Cavaliers would be reimbursed for half of the cost of renovations to Quicken Loans Arena, the Cleveland Cavaliers have scrapped the plans for the renovations altogether.
There won’t be a public vote on whether the Cleveland Cavaliers will be reimbursed by the city for Quicken Loans Arena renovations after all. The NBA’s Eastern Conference champions have made the referendum unnecessary by dropping the issue in question.
In April, members of Cleveland’s city council approved an “emergency measure” that would have reimbursed the Cavaliers for about half of the projected $140 million cost of the planned renovations to “The Q.” A few weeks later, a local activist group presented the city council with a petition that had enough signatures to trigger an Ohio state law provision which required that a public referendum on the payment to the Cavaliers be held.
After the city council even refused to enter the receipt of the petition into the record, much less go forward with the ballot measure that state law required, the activist group filed suit against the city to force the issue.
In keeping with the already-shady nature of the relationship between the Cavaliers and the city council, the city reacted to the suit by filing its own suit against itself with the Ohio Supreme Court.
That motion was unfruitful, however, as the court ruled that the referendum must be held two weeks ago.
Faced with the daunting task of trying to sway public opinion in its favor, the Cavaliers have now abandoned the renovations altogether. That decision is quite telling.
#Cavaliers have scrapped plans on $140 million upgrade to Quicken Loans Arena.
— Tom Withers (@twithersAP) August 28, 2017
Obviously, the Cavaliers didn’t like their chances of getting voter approval for the $70 million handout. That’s not hard to understand, as public opinion has grown increasingly negative toward government subsidies for professional sport entertainment corporations like the Cavaliers. There’s more that this decision reveals, however.
It’s also apparent that the Cavaliers either don’t have the resources to fund the renovations, or simply don’t want to spend that kind of capital on the upgrades. If the latter is true, then the question then begs to be asked: if the Cavs don’t think it’s a worthwhile investment, then why were they willing to push that same bad investment on the people of Cleveland?
The Cavaliers didn’t have to completely abandon the renovations. They could have done what nearly every other privately-owned business (as the Cavaliers are) does when they are looking to take on a major project. They could have borrowed against the value of the business or sold some stakes of the team to private investors. Again, the fact that they chose to abandon the renovations instead of pursue those channels is potentially very telling.
A similar question begs to be asked if the Cavs either wouldn’t pursue private funding or didn’t even attempt to. That question is, if the project wasn’t investable for a bank or another private source, why was the franchise so eager to let the same people that they would like to call dedicated fans pay for half of the project without any choice in the matter?
While the matter seems closed for now, it might rear its ugly head at some point in the future. It’s feasible now to see the Cavaliers eventually threaten to relocate the franchise because of The Q’s obsolete state, and pin the blame for that on the city’s resistance to help with renovation costs. At that point, it would behoove the city to remind the franchise that it was the team’s choice, not the city’s, to abandon the plans to upgrade the facility altogether. The team could counter with an argument that it was fully prepared to pay for half of the renovations on good faith that the city would provide the other half of the funding, and it’s not their fault that the city failed to live up to its agreement.
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Regardless of the motivations, the bottom line for right now is that the renovations that the Cavaliers wanted to perform at The Q aren’t happening. There could be more legal wrangling over the team’s future in the building in the future, but for now, it looks like the status quo is holding.