City to pay $30M for upgrades

Updated: November 19, 2013, 5:08 PM ET
By Pat McManamon | ESPN.com

The city of Cleveland reached tentative agreement with the Browns to pay for one-quarter of the team's planned $120 million in improvements to FirstEnergy Stadium.

The city's contribution will take place in $2 million payments to the team for the next 15 years. The agreement then includes a commitment in 2016 from the city to spend $12 million on capital improvements from a fund already set aside for that work. The $2 million annual contribution will come from the city's general operating fund, and will not affect the level of service and investment the city provides now, the mayor said.

"I would do nothing to put the city in jeopardy," Frank Jackson said at an afternoon news conference at Cleveland City Hall. Jackson added that the money will allow the city to have a modernized stadium when the Browns' lease ends in 15 years.

The agreement must be ratified by city council. Jackson said he hoped it would happen at the next meeting on Monday, but in a city hit hard by a poor economy and with numerous empty houses, it will be interesting to see if Council feels $2 million per year is worth the investment.

[+] EnlargeFirst Energy Stadium
AP Photo/Scott BoehmFirstEnergy Stadium, home of the Cleveland Browns, is expected to see $120 million in improvements.

The Browns will pay the entire cost of the improvements up front -- the most prominent feature being gigantic new scoreboards behind each end zone. Improvements will begin after the 2013 season and will be done in two phases over two years.

The city then will reimburse the team its portion. Jackson pointed out that the present value of $30 million spent over 15 years is $22 million.

Both Jackson and Browns CEO Joe Banner said the city has lease obligations to provide money for necessary repairs. Banner said the $2 million contribution is "moderately below the lease obligations" from the city's point of view, and significantly below from the team's.

"We actually view this deal as a significant savings to the city," Banner said.

"Much of what you see happen are things that we were obligated to do or will be obligated to do over 15 years," Jackson said.

Both Jackson and Banner said they favored the extension of the "sin tax," a tax on cigarettes and alcohol that was used to provide money to build the Browns stadium, Progressive Field and Quicken Loans Arena.

The sin tax provided the money for the $12 million in capital improvements. Those improvements will be decided by the city, with the Browns gaining input.

Jackson said the money is in a capital fund that presently has $24 million.

Jackson said he would have never have come to an agreement with the Browns if it placed any city services in danger. He admitted, though, that it's also $2 million that the city could use to provide additional services. In his view, the money is a worthwhile investment to the city to ensure the stadium is modernized and structurally sound.

Pat McManamon

ESPN Cleveland Browns reporter

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