With Gateway staring down a massive funding gap over the next decade, Cavaliers CEO Nic Barlage wants to reframe the debate around public support for Rocket Arena and Progressive Field.
It's note a giveaway to owners, but an investment in Cleveland’s future, he said.
“We have to look at these not as bailouts to billionaires,” said Barlage, who is also the CEO of Rock Entertainment Group (REG) and the arena. “We’re not looking for a handout.
"These are investments in an experience-driven economy.”
The two facilities will soon need more than $400 million in capital repairs over the life of the teams’ leases, according to the latest facility condition assessments. That's left the Gateway Economic Development Corp., which owns both buildings, with a sizable funding gap since the county's sin-tax revenues haven’t come close to keeping pace.
Critics argue the problem is rooted in decades-old leases that leave the public on the hook for a disproportionate share of arena and ballpark costs. Rocket Arena will need more than $80 million in capital improvements over the next three years alone, work that ranges from major building systems to behind-the-scenes infrastructure.
Barlage doesn’t necessarily dispute that criticism, but notes that Cavaliers chairman Dan Gilbert inherited the lease when he bought the Cavaliers in 2005.
"We didn’t create the lease," said Barlage, who spoke at the City Club of Cleveland on Friday, Jan. 9. "We weren’t the ones who pushed for it.”
Barlage also noted that Gilbert has invested more than $200 million of his own money into Rocket Arena over the past two decades, including about $85 million since the arena’s 2019 transformation.
Gateway’s leadership has been in talks with city and county officials in recent months as both sides search for a long-term fix.
“These leases — if (city leaders) want to change them, we're open to the conversation,” Barlage said. “Our doors are never closed in these things.”
Still, Barlage believes the funding debate misses a bigger point: arenas and ballparks have become core pieces of how cities attract residents, visitors and employers in an economy increasingly driven by travel, entertainment and experiences. That’s especially true of Millennials and Gen Z, who often value experiences over possessions.
“When you look at communities that are thriving — and communities that are growing faster than we are, although we’ve got some great momentum right now — they celebrate these investments because they understand what they unlock,” Barlage said. “It’s a lot easier to recruit somebody to Cleveland with these foundational assets as part of your bag of tricks than it is if we don’t have them.
“At the end of the day, it's just about finding the right balance and making sure that we have sustainability. But I look at this as investments in a whole new segment of the economy that's growing and thriving.”
As to the impending departure of the Cavs' pro sports peers, the Cleveland Browns, from that urban core for a proposed $2.4 billiion stadium in Brook Park, boosted by $600 million from the state, Barlage was grilled on that with the first audience question:
“What opportunities and challenges does the Browns’ departure create for REG?”
“Right off the bat, huh?” Barlage said, as the crowd roared. “At least we got that one out there.”
In true CEO fashion, Barlage didn’t take a hard stance on the Browns’ decision — ”We are fully supportive of private businesses making private decisions for where they want to play and what they want to do,” he said — and even noted that the move to the suburbs mirrors decisions made by several other NFL teams.
Instead, Barlage reframed it as an opportunity to rethink what Cleveland’s lakefront could become.
“Now that we have an open waterfront that we can do whatever we want with, how do we make this thing sing for this region?” he said. “I think we just have to live more in this opportunistic mindset and also realize they're (the Haslams) going to deploy significant amounts of private capital in what they're doing out in Brook Park.
“So, we have to just embrace those things as a region and we have to make sure that we celebrate these investments in this economy that's developing.”