Gateway continues to take it on the chin

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Taxpayer Hell, BY ROLDO BARTIMOLE, Cleveland Free Times, 7-22-99

"... Gateway board chairman Joe Marinucci didn't bother asking the other Gateway tenant, Dick Jacobs, to pay some of his rent early so that Gateway wouldn't have to take a costly bridge loan to meet expenses next month. He didn't because he said he felt it would be fruitless. Don't know why he would think that, since Jacobs generously gave fans free water on a recent steamy-hot game day!

Marinucci's reluctance to ask Jacobs for an early payment of rent reveals the poor relationship Gateway has with its tenants - Gateway being the doormat, while Jacobs and the Gunds do the stomping ...

You have to wonder if there is a section of the brain missing from these three sports entrepreneurs that makes them so intensely greedy when they are treated so well by the public.

Let's take Jacobs. He pays rent from ticket sales. Last year before some deductions, the rent was $1.9 million. Now remember, since the team sells out before the season even begins, Jacobs holds that cash all year. But he doesn't have to give up a penny until Nov. 1, after the season concludes.

Six to 10 times a year, Jacobs uses what is known as the "common area" outside the stadium, where various moneymaking events occur. Supposedly, the teams and Gateway share this area for events. Gateway has sent invoices to Jacobs for $2,500, the charge for each event. Jacobs simply sends back the invoices with a "No thanks, we won't pay."

Again, it reveals the wonderful cooperation Jacobs gives the public for building him a $174 million stadium with almost all its revenue going to him.

Gateway had to go to banks for a loan to bridge the financial gap it will suffer this month. Because it's in such poor financial shape, most banks wouldn't even deal with Gateway. National City offered to make the loan but demanded $12,000 up front and offered an interest rate of 3 percent plus prime. One Gateway member noted that that might cost Gateway 20 percent in interest! The $12,000 alone would mean 6 percent on the expected borrowing of $200,000.

Mr. Jacobs is unmoved ...

Earlier this year when Jacobs wanted to put 500 new seats into the stadium, Gateway - suckers that they are - said all right, old Dick, you just go ahead. What it meant was that Jacobs could sell 40,000 extra seats over the last year. At about $10 a seat, that's $400,000.

That $400,000 alone is twice what Gateway intends to borrow from National City Bank.

When old Dick wanted the used bulbs from the stadium lighting, you'll remember Gateway said okay, old Dick, they're yours. Old Dick turned around and started selling them as souvenirs. At 200 bucks apiece.

But these small items are merely pocket change for old Dick.

No question he's having a better financial year that he did last year, and look how he did then.

In 1998, there were $55 million in ticket sales, $6 million more than the year before and nearly $10 million more than the year before that. Local radio and TV revenues were $19 million, up $2 million over last year, up $6 million over the year before. Concessions were $16 million, about $2 million more than each of the last two years. Merchandise, $15 million, was down actually from 1997 by almost $2 million, but up from the previous year by about $1 million.

So the dough rolls in. Much of it before the season even starts. What does the taxpayer get? A kick in the teeth.

We've paid out $147 million in sin taxes thus far. And Jacobs, the Gunds and Gateway have now "saved" $36,634,669 in property taxes, according to the latest figures compiled by the County Auditor's office.

That's disgusting. But what is more disgusting is that $22,790,189 of the $36 million comes straight from taxes that would go to the Cleveland school system. In other words, from the struggling children of Cleveland, who are predominately poor and whose families are now being tossed off welfare at record rates by the same Cuyahoga County that helped give the fabulous free-tax ride to multi-millionaire Jacobs ...

Wouldn't you think that they could offer to lend Gateway what amounts to scrap change for a couple of months? ..."

Roldo Bartimole publishes the newsletter Point of View. He can be reached at pointofview@stratos.net

Copyright © 1999, Cleveland Free Times (Hummingbird Press)

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