1. QUICKEN LOANS ARENA PROPOSED ENHANCEMENTS
11/27/2018

2. 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

3. 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

4. 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

5. $70 MILLION PUBLIC BOND SOURCES
County
Sources (Sales Tax, Hotel, Other)
City
Admission
Tax $4.5M/YR
Destination Cleveland From 1.5%
Bed Tax
PRESENT VALUE
$22.8 M
PRESENT VALUE $26.4 M
PRESENT VALUE
$26.3M
TOTAL VALUE $75.5 M
(INCLUDES RESERVE)
11/27/2018

6. 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

7. 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

8. 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