QUICKEN LOANS ARENA PROPOSED ENHANCEMENTS 11/27/2018

CITY ADMISSION TAX ON ARENA “AS IS” To assist the 1993 Gateway Arena Bonds, the City agreed to send annual % amounts of its City Arena Admission Taxes to the Bond Trustee from 1993 to 2023. In 2015 the Trustee for Gateway Arena Bonds received $4.7 million in City Arena Admission Taxes, and the City retained $4.3 million from those taxes. In 2016 the Trustee for Gateway Arena Bonds received $7.0 million in City Arena Admission Taxes, and the City retained $5.85 million from those taxes. Arena Activity City Share of 8% Tax Trustee Share of 8% Tax Basketball games 37.5% 62.5% All other arena events 75.0% 25.0% 11/27/2018

CITY ADMISSION TAX PROPOSED FOR 2017 ARENA BONDS DEAL Extends the current arrangement for another 11 years: from 2024 to 2034. By extending the current admissions tax arrangement, we are causing the purchasers of tickets to events at the Q to contribute to the costs of the $140 million enhancements to the Q. In other words, the City’s contribution to the Arena Bonds requires no new taxes: it simply extends the duration of an annual admissions tax payment that the City already makes to Cuyahoga County. In exchange, the Arena lease will be extended to 2034. 11/27/2018

A DOLLAR TODAY IS WORTH MORE THAN A DOLLAR TOMORROW One of the most fundamental concepts in finance is that money has a “time value.” That is to say that money in hand today is worth more than money that is expected to be received in the future. The reason is straightforward: A dollar that you receive today can be invested such that you will have more than a dollar at some future time. This leads to the saying that we often use to summarize the concept of time value: “A dollar today is worth more than a dollar tomorrow." - From TVMCalcs.Com In the further slides examining the proposed public investments in the Arena Bonds, we are assuming a 5% discount rate to account for the time value of money. 11/27/2018

$70 MILLION PUBLIC BOND SOURCES County Sources (Sales Tax, Hotel, Other) 2016-2034 City Admission Tax $4.5M/YR 2024-2034 Destination Cleveland From 1.5% Bed Tax 2017-2034 PRESENT VALUE $22.8 M PRESENT VALUE $26.4 M PRESENT VALUE $26.3M TOTAL VALUE $75.5 M (INCLUDES RESERVE) 11/27/2018

TOTAL 2017 VALUE OF COUNTY CONTRIBUTIONS TO ARENA BONDS = $22,862,802 YEAR $ FROM CCGC HOTEL PLAN $ REDIRECTED FROM CITY ADMISSION TAX $ ARENA SALES TAX INCREMENT 2016 2,000,000 1,000,000 400,000 2017 1,500,000 377,317 150,000 2018 951,485 2019 779,458 2020 1,450,000 1,002,632 2021 1,911,716 2022 1,400,000 1,339,393 2023 1,328,401 2024   200,000 2025 2026 2027 2028 160,000 2029 2030 2031 2032 2033 2034 2017 PV SUBTOTALS 13,491,367 6,820,946 2,550,489 TOTAL 2017 VALUE OF COUNTY CONTRIBUTIONS TO ARENA BONDS = $22,862,802 11/27/2018

TOTAL 2017 VALUE OF CITY CONTRIBUTION TO ARENA BONDS = $26,407,044 YEAR $ FROM EXTENDED ADMISSIONS TAX (GROSS AMOUNT) $ TO ARENA COOPERATIVE BOND DEBT SERVICE AND BOND RESERVE $ TO SPORTS FACILITY IMPROVEMENT FUND 2024 6,030,792 2,530,792 3,500,000 2025 8,608,724 5,108,724 2026 9,529,632 6,029,632 2027 8,363,855 4,863,855 2028 7,891,000 4,481,000 2029 2030 2031 2032 2033 2034 2024 PV SUBTOTALS 66,229,813 37,157,363 29,072,450 2017 PV SUBTOTALS 47,068,292 26,407,044 20,661,247 TOTAL 2017 VALUE OF CITY CONTRIBUTION TO ARENA BONDS = $26,407,044 11/27/2018

DESTINATION CLEVELAND CONTRIBUTION YEAR $ FROM PORTION OF 1.5% BED TAX   2016 2017 1,000,000 2018 2019 2,000,000 2020 2021 2022 2023 2024 2025 2026 2027 2028 3,150,000 2029 3,244,500 2030 3,341,835 2031 3,442,090 2032 3,545,353 2033 3,651,713 2034 3,761,713 2017 PV SUBTOTALS 26,351,921 TOTAL 2017 VALUE OF DESTINATION CLEVELAND CONTRIBUTIONS TO ARENA BONDS= $26,351,921 11/27/2018