The Cleveland Cavaliers needed a new 50,000 square foot practice facility in Independence, Ohio. The facility, called Cleveland Clinic Courts, opened for the 2007-08 NBA season. It includes two regulation basketball courts, workout facilities, locker rooms, meeting areas, and media facilities.
The Value Provided
Cleveland Cavaliers needed off-balance sheet financing.
Funding by multiple port authorities and a municipality needed to be coordinated.
Benefits of Working with us
DFA partnered with other area port authorities to fund the project.
Port authority involvement allowed tax-free purchase of construction materials.
DFA has extensive experience with off-balance sheet financing.
Project Cost: $27.845 million
$9,500,000 – Cleveland-Cuyahoga Port Authority Bonds
$6,000,000 – DFA Jobs & Investment Fund Bonds
$5,200,000 – Toledo-Lucas Port Authority Bonds
$1,850,000 – City of Independence land purchase
$5,295,000 – Cleveland Cavaliers cash
$27,845,000 – Total
CCCPA Bonds: 6.375%
DFA Bonds: 6.375%
TLCPA Bonds: 6.500%
The City of Independence acquired the project site at a cost of $1,850,000. The city also implemented a TIF district to offset the purchase costs. The city entered into a non-cancelable 20-year ground lease with the Cleveland Cuyahoga County Port Authority. Both parties have renewal options at the end of the lease term. The Cavaliers constructed the practice facility pursuant to a construction agency agreement with the CCCPA. The project was then leased to a real estate holding company created by the Cavaliers and sub-leased to the Cavaliers basketball team. Lease payments from the Cavaliers will be sufficient to repay all of the principal and interest on the CCCPA, TLCPA, and DFA Bonds. After the 50-year lease term expires, the City of Independence will assume ownership of the entire project.