The Cleveland Browns’ $120 million plan to “modernize” FirstEnergy Stadium is a significant step closer to reality.
The Browns and the administration of Cleveland Mayor Frank Jackson reached an agreement Tuesday to fund the project proposed by the team last week. City Council must approve the deal, which was announced at a joint news conference. Jackson hopes the deal is approved Monday at a Council meeting.
The Browns agreed to pay the $120 million up front through an NFL loan and private funding. The city, which has significant financial struggles, would pay $2 million per year for 15 years from its general fund.
The city’s contributions would help fulfill its obligations for capital repairs and improvements as outlined in the stadium lease. The city owns the stadium.
“This will not affect services or development in the neighborhoods or City of Cleveland,” Jackson said. “It will not diminish it at all.
“The level of service we provide today will not be in jeopardy.”
The Browns received a low-interest loan from the NFL for half the cost of the renovation project, up to $62.5 million. CEO Joe Banner said the team will finance the other $60 million through private loans. He and Jackson referred to the city’s $30 million commitment over 15 years as $22 million in present-day money and said it saves the city from having to sell bonds to finance its portion.
“We tried to find a balance where we were, in fact, holding the city to some of its lease obligations -- in our view very modest,” Banner said. “We tried to find the balance where there was some city involvement and some living by the lease, but to structure it and minimize it as much as we could.”
As part of the new agreement, the team would have greater influence in how the city spends $12 million toward capital repairs at the stadium, starting in 2016. The $12 million is part of $24 million remaining in the sin tax fund for future repairs.
Jackson will seek an extension of the tax on alcohol and tobacco products. Banner said the team “strongly supports” the tax, which is set to expire in 2015.
“It would relieve us putting so many millions of dollars into the capital fund,” Jackson said. “It would go a long way in relieving a burden in the future.”
“The goal here is after we spend the $120 (million), don’t allow things to regress,” Banner said.
The stadium lease expires in 15 years, and Jackson said the city benefits if the building is in good shape at that time.
The first phase would start in January and be completed for the 2014 season. It includes the installation of two video boards nearly three times the size of the current scoreboards in each end zone. New LED video boards would be added throughout the stadium, along with an audio system and two escalators.
The project would increase the seating capacity in the lower bowl -- overall capacity would shrink 3,000 to just more than 68,000 -- while improving sightlines and moving fans closer to the field.
The second phase, to be completed in time for the 2015 season, would improve the concession areas, club seats and suites. New graphics honoring team history would be added inside and outside the stadium.
The Cleveland Planning Commission approved the concept Thursday.
“This $120 million renovation is a result of wanting to create the best fan experience in the NFL for our fans and players, and also to create a venue to attract other world-class events at FirstEnergy Stadium,” Browns owner Jimmy Haslam said in a statement. “We realize the transformative opportunity of this investment for the City of Cleveland and worked with Mayor Jackson to help minimize their costs and create the most productive agreement moving forward. We are excited to reward our fans and the community with the experience they deserve.”