The Gateway Project: Following the Norms of the Suburban Regime

The $392 million Gateway Complex opened at the beginning of the Cleveland Indians\' Spring, 1994 season, and was the most expensive developmental project ever initiated in downtown Cleveland. The Complex, which is almost identical to Baltimore\'s Camden Yards, had been referred to as the city\'s all-out bid to retain major league sports and inject new life in its central business district. It includes a baseball stadium, a basketball arena and a common area, and represents a large and important part of a vision of private executives and local entrepreneurs.



The Gateway project has a long and irregular history, however, one which dates back to 1984, when Cuyahoga County voters defeated a ballot issue to build a domed stadium in downtown Cleveland. Although the ballot was defeated, the idea of replacing or refurbishing Cleveland Stadium had already established a place in the minds of many community leaders. So much so that later, that same year, leaders met to re-evaluate the concept of developing a new downtown sports facility. Within a few months, they formed a civic committee to take their recommendations a step further. After re-evaluating the feasibility of the concept, they agreed that a new, state-of-the-art downtown domed stadium should be built on the old Central Market site -- the site which eventually became the site of the Gateway Complex. The essential difference between the new and the old set of recommendations had to do with the financial plan. In consideration of County voters\' concern that they not be asked to shoulder new taxes, the committee proposed a combination of public and private funding -- a 50-50 split.



By June, 1985, the civic committee was re-organized as the Greater Cleveland Domed Stadium Corporation. As such, the Corporation was given permission to act on behalf of the citizens of Cuyahoga County. In fact, the project had developed so much support that over the next few months, the City, State and Federal government all donated money, property, and/ or services towards its completion. Within a year, lease negotiations had begun with the Cleveland Indians.



Two issues, to do with funding and stadium design, developed within the Domed Stadium Corporation\'s first year of operation. Both were resolved by changing the Corporation\'s charter so as to allow it to consider alternative (non-domed) stadium designs. In the process, the Corporation\'s name was changed to New Stadium Corporation. Although the next few years were productive, they were marked by a series of deadlocks, most of which had to do with the public-private financial plan (i.e., the 50-50 split). Republican Mayor Voinovich had, at that time, already served the maximum of two four-year terms in office. His political influence, which reached extensively into the business community, was on the decline and he was unable to break the deadlocks.



However, in 1990, a series of events took place which would, indeed, break the deadlocks and push the project over one of its most crucial hurdles. First, Democrat Michael White won the election as Mayor, and used his overwhelming popularity to back the Gateway Project. Within a few months, a coalition of public officials ratified a revised luxury tax on alcohol and cigarettes to finance the Complex and placed the initiative on an upcoming County primary ballot. The tax passed by a slim margin. Afterwards, the Cleveland Cavaliers and Cleveland Indians signed memorandums of intent, which set in general, the monetary terms of their forthcoming leases with their respective facilities (i.e., the Indians at the Stadium and the Cavaliers at the Arena).



By June, 1991, the Gateway Economic Development Corporation of Greater Cleveland was formed and later, merged with the New Stadium Corporation. Gateway took responsibility for the New Stadium Corporation\'s debts and was given ownership of its properties. Soon thereafter, Gateway, the City of Cleveland and Cuyahoga County approved a tri-party agreement to support and back the sports/ entertainment complex project. Private investors bought into the project by immediately purchasing all $148 million worth of tax-exempt bonds on the same day they went on sale. Cleveland business leaders loaned $28 million to the Gateway Corporation through the Cleveland Development Partnership. The Indians and Cavaliers took the next step and signed long-term leases (20 years for the Indians and 30 years for the Cavaliers) to play in the Gateway Complex. In doing so, they committed to one of the largest financial contributions ever made at that time by a major league baseball or basketball team to the development of a new sports facility.



By the end of 1991, all remaining negotiations had been settled. Cuyahoga County Commissioners and the State Controlling Board agreed to help Gateway cover any gaps or overruns in its financial plans and the Ohio Senate passed a bill which capped Gateway\'s property yearly taxes at $400,000. With all the financial \"ducks\" aligned, and with the physical site cleared, the excavation of Gateway\'s baseball park began shortly after the New Year celebration in 1992.



Author: Steven A. Maclin, Ph. D.



About the Author: Dr. Maclin has been a university professor of public administration and policy since 1994. Recently, from 1998 - 2004, he lived and worked with American military troops in Japan, Okinawa, and South Korea. He has previously edited and published dozens of articles in professional administrative journals and recently, in his ‘spare time,’ he’s been building websites for distributing materials to his graduate students. He\'s now stateside, teaching graduate students online, writing articles and developing a small online business (see http://buyfromart.com); he can be reached at info@buyfromart.com.