The bipartisan office that reviews legislation for state lawmakers says the tax revenue estimates provided by the owners of the Cleveland Browns for a $3.4 billion new domed stadium and development are "overly optimistic." House Republicans approved in the budget $600 million in 30-year bonds for the project, which the Browns have claimed will raise $1.3 billion more than the billion dollars the state will need to pay back the bonds.
This is the first publicly-released analysis from a legislative or state office of tax revenue estimates for the project from the Haslam Sports Group, the owners of the Browns.
An attorney and senior economist with the Legislative Service Commission and the Legislative Budget Office note in their analysis that they were unable to get the full report from the consulting firm Robert Charles Lesser & Co. The Haslam Sports Group used that to prepare a presentation to the House Arts, Athletics and Tourism Committee about the bond package . That bond package was added to House Bill 96, the budget bill, on March 31. House Republicans approved the budget on April 8.
The researchers write that they can't verify the economic claims in the consultants' report "because the source material and methodology were not documented in full detail. Nevertheless, the HSG projections implied an outcome that would outperform other similar developments previously studied in peer-reviewed academic literature.鈥�
There are nearly 14,000 temporary and permanent jobs in the consultants' report: 6,000 temporary construction jobs, 5,370 permanent full-time equivalent jobs at the development site and 2,540 indirect jobs in Cuyahoga County. The LSC researchers write that most of these would be relocated jobs rather than new ones.
The LSC analysis also says jobs in businesses surrounding the development are likely based on 鈥渕ultiplier effects鈥� of secondary spending as a result of economic activity at the site. But the LSC analysis cautions: 鈥淎cademic literature on the employment of such methods documents frequent misuse of multiplier effects to inflate the reported economic impacts of sport stadiums. However, since the publicly available executive summary does not describe the methods used in detail, LBO is unable to critique the multiplier effects assumed in RCLC鈥檚 executive summary.鈥�
The HSG report estimates the stadium and development would attract 1.5 million more visitors than Huntington Bank Field, the current Browns stadium in downtown Cleveland. LSC鈥檚 analysis notes the domed stadium will have a capacity to seat 70,000, which is 3,000 more than at Huntington Bank Field. With 10 home games, that means 30,000 more visitors. But LSC notes it would take 21 other sold-out events to reach the predicted total 鈥� and none of the three closest stadiums had more than 12 such events in 2023.
鈥淚t is important to emphasize that this calculation assumes an optimistic scenario relative to the experiences in comparable cities, suggesting that the estimated 1.5 million new visitors may be overly optimistic,鈥� the LSC researchers write.
The LSC analysis also says the bonds would not be general revenue bonds, The analysis also says there鈥檚 no clear constitutional authorization for the bonds, and the legality could be up to the courts to decide as there is a case from 1993 that could potentially apply. Treasurer Robert Sprague has said he believes the bonds are constitutional.
