Cavaliers owner Dan Gilbert backed out of his commitment to split the cost of a $140 million “Transformation” of Quicken Loans Arena on Monday, perhaps opening the door for the team to move or be sold in 2027.

It also means the NBA will not consider the city’s petition to host the league’s All-Star Game in 2020 or 2021.

The project for the 22-year-old facility was announced in December, but immediately sparked debate over the whether the city’s $70 million investment would be better spent elsewhere.

Earlier this month, the Ohio Supreme Court ordered Cleveland City Council Clerk Pat Britt to accept referendum petitions submitted by a coalition that opposed paying for the upgrades. Cleveland’s share was to come largely from an existing admission tax on event tickets.

The deal would have extended the Cavs’ lease at the Q until 2034. Gilbert’s withdrawal makes it uncertain what will happen when the current lease expires in 2027.

The Q, which opened in 1994, is the oldest arena in the league without a major structural renovation, according to an email from Quicken Loans Arena.

“This is a significant loss for the community,” Cuyahoga County Executive Armond Budish said in a statement. “It jeopardizes the future of two key economic generators: The Q and the Cavs. The deal would have guaranteed that the Cavs would stay in Cleveland through 2034 and it would have created and retained many hundreds of jobs for people living in our neighborhoods.

“And the deal did not raise anyone’s taxes. Contrary to misinformation put out by the opposition, the death of this deal actually means there will be less money, not more, available for social and community services for those most in need. By killing this deal, the opponents have harmed the future for our neighborhood residents.”

Cleveland Mayor Frank Jackson was also among the supporters of the project.

Construction was to begin after the playoffs ended in June, but the possible referendum delayed that start.

An email explaining Gilbert’s decision said the proposed referendum pushed up the costs of the project. That included historically low interest rates that are no longer available and missing the current construction cycle. The Cavs’ first preseason game is at home on Oct. 4 and the season-opener is at the Q on Oct. 17.

The email estimated the cost of a new arena at $500-$800 million.

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There would have been no new or increased taxes for the renovation. According to the email, the $70 million public funding was to have come from the existing admissions tax on every ticket sold for Q events from 2023-2034 and a portion of the existing Cuyahoga County bed tax, paid primarily by visitors to the city. The Cavaliers had committed to covering any and all construction cost overruns.

The city’s general fund was to have received a match of what was collected from the admissions tax.

Included in the deal was the renovation of 40 gym courts in the city of Cleveland’s recreation centers and all its high schools. The email said over 2,500 project-related construction jobs would have been created and the number holding permanent jobs at the Q would have risen to 3,200.

What was deemed as the “Transformation” project would have also helped the Q compete with other Midwest cities for major events such as concerts.

The possible referendum, now scuttled, was led by the Washington, D.C.-based Metro Industrial Areas Foundation. Locally it was led by a group called the “Greater Cleveland Congregations,” the Service Employees International Union District 1199 and the Cuyahoga County Progressive Caucus.

According to Crain’s Cleveland Business, NBA deputy commissioner Mark Tatum recently wrote a letter to Gilbert saying if the project didn’t start by Sept. 15, the city would not be considered for the 2020 or ’21 All-Star Games. The letter said the league had already delayed the announcement on those events to accommodate Cleveland.

Economic impact

An All-Star Game could have an economic impact of $100 million, the Quicken Loans email said. It said the Q and the Cavs have already generated more than $2.7 billion for the community, produced nearly $500 million in state and local tax revenue and contributed more than $42 million in civic and charitable funding.

According to the Plain Dealer, Gilbert paid about $13 million for upgrades to the Q in 2006, while Gateway, funded by the sin tax, chipped in about $22 million in recent years. According to the Cavs (through the Plain Dealer), they have spent $88 million on improvements, $117 million on repairs and maintenance and $176 million on other items since 1994.

Marla Ridenour can be reached at mridenour@thebeaconjournal.com. Read the Cavs blog at www.ohio.com/cavs. Follow her on Twitter at www.twitter.com/MRidenourABJ.