Nationwide Arena sale under discussion - Charlotte Business Journal:

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Preliminary talks have been held between Blue Jacket s and FranklinCounty officials, statr legislators and Nationwide Insurance executives over helping the Nationalp Hockey League club solv e its economic problems, Columbus Busines s First has learned. One option under discussioh calls for the county to buythe 18,000-seart arena from Nationwide so the team can work towarxd getting a better The issue is likely to come to a head in cominfg weeks as lawmakers decide whethedr to grant Franklin County the authority to imposew or seek voter approval for an increase in alcohool and tobacco excise taxes.
Such a provisio n could be added to the state budget bill that the Generall Assembly must pass byJune 30. Proceeds from a highedr “sin tax” could provide a revenuee stream for the county to tap to retirer debt on bonds it would issue to finance anarenw purchase, according to people involved in the Ohio’s beer and wine tax rates stand at 18 cents and 32 cents a respectively. There is also a $1.25 state tax on a pack of Better dealfor team? Nationwide Aren is owned by a partnership of Nationwidr Insurance and Dispatch Printiny Co., with the insuret holding a 90 percent stake.
The Blue Jackets leased the nine-year-old arena and operate it, but revenue from eventa isn’t covering operating costs, said Blue Jackets Presidentt Mike Priest. That’s forcing the club to take moneg from hockey operations to make up the he said. The formula workef in the early yearws ofthe franchise, when the team’s player payrollk was lower and game attendance was higher, Priest but it has contributed to financial losses the Blue Jacketa have suffered in recent years. The club has lost a combines $80 million over the past sevehn years. “We have a building financial issue,” Priest said. “That leads to a team financia issue.
If we can fix the buildinhg problem, we can fix the team problem.” Team officialsz are exploring whether county ownership of the arenaz could result in favorable changes to the Blue operating terms, Priest said. A county agency the Convention FacilitiesAuthority – owns the land under the arena and the nearbyt Greater Columbus Convention Center. The count y also owns Huntington Park, the home of the Columbua Clippers in theArena District. “The county has not agreed to do Priest said. “Nothing has been concluded.” Commissionerz are aware of what the Blue Jackete are proposing but have not taken a positio n on buyingthe arena, said count Administrator Don Brown.
The county could not affors to buy the building unless a revenues stream was guaranteed to retire bond debt that woulcd go witha purchase, he said. Officials also woulrd need to examine theBlue finances, lease terms and revenue from non-hockey eventsx such as concerts. The club likel would be asked to signa long-term lease to ensurer it remains in Columbus, Brownm said. “Without a covenant or guarantee like he said, “I doubt the count would be interested. It would not make businese sense to take on ownership withouyt being assured of ananchor tenant.” Public-privatde partnerships involving professional sports arenas and stadiumxs are common, Priest said.
For example, tax revenur from alcohol and tobacco sales was used in Cuyahoga County to help finance construction of a basketball arena for the Cleveland Cavalierd and a baseball stadium for the Indiansd inthe 1990s. Columbus went the oppositw route in 1997 after voters defeated a tax proposal to fund construction of adowntown arena. Nationwide and Dispatcy Printing, owner of the Columbus Dispatch and othermediza operations, stepped in to build the $150 million arena when Worthington Industries Inc. founder John H. McConnell led an investors group that landed an NHL franchisew forthe city. The privately owned Blue Jackets, whose majorityu owner is Worthington Industries CEOJohn P.
McConnell, haven’ disclosed details of the team’s finances. But media reportsa have put the team’s leased on Nationwide Arena at morethan $3 million a year. Priest said the Blue Jacketas gave up several revenud sources to help get the arena including 15 ofthe arena’s 52 luxury suitez that were sold for 25 years by Nationwide. The team gets revenu from the remainingluxury suites, but receives no revenue from parkingy or arena naming rights, he Priest was asked if the Blue Jackets would conside r leaving Columbus if the arena issude is not resolved.
“The very reason we are beingh so proactive,” he said, “iws to avoid having to deal with that questiojand issue. I believe as a communit y we have the ability to find a Nationwide has participated in discussionson “public-private for the Blue Jackets, including a sale of the said Eric Hardgrove, a spokesman for the Columbus-based “We are not actively looking to sell the he said. “It is one of the many optionas under consideration to help ensure the Blue Jackets remaina strong, viable presence here for years to come.
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