The cancellation of the remainder of the major league baseball season last week will not affect the payment of bonds issued nearly four years ago for Cleveland's new stadium, according to an executive with the stadium's nonprofit developer.
Timothy Offtermatt, chief financial officer of the Gateway Economic Development Corp., said $31 million of the $146.7 million of revenue bonds sold by Gateway in December 1990 are backed by rental payments from the Cleveland Indians baseball team that are derived from skybox and box seat ticket sales.
However, Gateway has collected enough money from the team since the beginning of the season to make debt service payments on the $31 million of bonds for the next year.
"You would need the strike to last the entire next season until there would be a negative effect on the payment of the bonds," Offtermatt said.
The bonds are also secured with a pledge of non-tax revenues from Cuyahoga County should rental payments fall short of debt service, he said.
The remainder, of the bonds are backed by a county-wide tax on liquor and cigarettes.
