Ohio's Management of Unclaimed Funds Affects Sports Facilities and Insurance Payouts

In Ohio, a significant shift in the management of unclaimed funds has sparked interest and legal actions, particularly affecting pro-sports facilities and insurance policyholders. The state has been using long-held unclaimed funds to provide grants for sports and cultural venues, starting with a proposed suburban stadium for the Cleveland Browns. The Cleveland Cavaliers and Cleveland Guardians have also submitted grant applications for maintenance work on Rocket Arena and Progressive Field.

The state budget office invited proposals from sports teams in January, despite ongoing litigation challenging Ohio's authority to use unclaimed property this way. Approximately $1.7 billion to $1.9 billion in unclaimed funds, potentially including insurance payouts and other business assets, is currently managed by the state. Since 2011, companies like John Hancock Life Insurance have relinquished assets to Ohio, which the General Assembly has now reclassified as state property.

Lawmakers in Ohio have earmarked $1 billion from these unclaimed funds to support sports and cultural projects, prioritizing the new Browns stadium in Brook Park. A statutory limitation period now designates that unclaimed money becomes state property ten years from its receipt. Nonetheless, a Franklin County Common Pleas Court has issued a temporary restraining order halting the appropriation of the contested funds.

Opponents argue that Ohio's strategy amounts to an unconstitutional taking of private property. However, state representatives claim individuals have had ample opportunity to reclaim assets. Through the new Sports Facility Grant Program, grants can cover up to 25% of project costs, contingent on anticipated tax revenues meeting or exceeding the grant amount.

Professional sports franchises operating in public-owned venues, such as those managed by Cuyahoga County's Gateway Economic Development Corporation for the Cavaliers and Guardians, can apply for these grants. Meanwhile, the city's "sin tax" on cigarettes and alcohol, intended for facility repairs, faces challenges keeping pace with rising costs, complicating funding for venue maintenance.

The Cleveland teams argue that state funding is essential for preserving and modernizing their venues. They emphasize necessary upgrades, including structural and technological enhancements, that align with long-term leasing commitments and facility preservation goals. These developments highlight the ongoing debate in Ohio over unclaimed funds' allocation and their impact on public finance, insurance management, and community infrastructure investment.