The Cleveland Cavaliers have announced the cancellation of their participation in The Q Transformation Project of the publicly owned Quicken Loans Arena, which would have significantly upgraded one of the oldest arenas in the NBA.
Construction on the US$140m facility project was to have started this past June, but had been delayed due to a prospective referendum being placed on the ballot by the Washington-based Metro Industrial Areas Foundation, represented locally by the Greater Cleveland Congregations (GCC), Service Employees International Union District 1199 and the Cuyahoga County Progressive Caucus.
The prospective referendum will cause the groundbreaking of The Q Transformation to miss the current construction cycle, which pushes the overall price tag of the project higher due to rising construction costs. In addition, a time-sensitive financing package that included historically low interest rates will be negatively impacted by further delay due to a prospective referendum exposing the project to an expected higher interest rate environment.
The public-friendly public/private partnership was to be funded with US$70m of private capital contributed by the Cavaliers organization; an additional US$70m in public funding was to be generated primarily by a portion of the existing admission tax of every ticket sold to every event at The Q from 2023-2034 and a portion of the existing Cuyahoga County Bed Tax. The Cavaliers had also committed to covering any and all construction cost overruns on the project.