Nationwide Arena sale under discussion - Baltimore Business Journal:

ovaluleq.wordpress.com
Preliminary talks have been held betweenb Blue Jackets and FranklinCounty officials, state legislators and Nationwid Insurance executives over helping the National Hockey League club solve its economic problems, Columbus Business First has learned. One option unde discussion calls for the county to buythe 18,000-seat arena from Nationwide so the team can work towars getting a better lease. The issue is likely to come to a head in cominvg weeks as lawmakers decide whether to grant Franklinn County the authority to impose or seek votedr approval for an increase in alcohol and tobacco excise Such a provision could be added to the state budgetr bill that the General Assembly must pass byJune 30.
Proceed s from a higher “sim tax” could provide a revenue streaj for the county to tap to retire debt on bondss it would issue to finance an arena according to people involved inthe discussions. Ohio’s beer and wine tax ratex stand at 18 centsa and 32 centsa gallon, respectively. There is also a $1.25 state tax on a pack of Better dealfor team? Nationwide Arena is owned by a partnership of Nationwide Insurance and Dispatch Printingh Co., with the insurer holding a 90 percenft stake. The Blue Jackets lease the nine-year-oled arena and operate it, but revenue from events isn’ t covering operating costs, said Blue Jackets President Mike Priest.
That’s forcing the club to take monety from hockey operations to make upthe difference, he The formula worked in the early years of the when the team’s player payroll was lower and game attendance was higher, Priest but it has contributed to financiao losses the Blue Jackets have suffered in recent years. The club has lost a combinef $80 million over the past seveh years. “We have a building financialk issue,” Priest said. “That leads to a team financial issue.
If we can fix the building problem, we can fix the team Team officials are exploringv whether county ownership of the arena could resulyt in favorable changes to the Blue operating terms, Priest said. A countyy agency – the Convention Facilities Authority – owns the land under the arena and the nearby Greate r ColumbusConvention Center. The county also owns Huntingtonm Park, the home of the Columbusz Clippers in theArena “The county has not agreed to do Priest said. “Nothing has been Commissioners are aware of what the Blue Jackets are proposinvg but have not taken a position on buying the said county AdministratorDon Brown.
The countyt could not afford to buy the building unless a revenue stream was guaranteed to retire bond debt that wouldr go witha purchase, he said. Officialz also would need to examine theBlue finances, lease terms and revenue from non-hockey events such as The club likely would be asked to sign a long-ternm lease to ensure it remains in Columbus, Brown said. “Withoutg a covenant or guaranteelike that,” he said, “I doubt the county would be It would not make business sense to take on ownership withouf being assured of an anchor Public-private partnerships involving professional sports arenas and stadiumzs are common, Priest said.
For example, tax revenuw from alcohol and tobacco salezs was used in Cuyahoga County to help finance constructiom of a basketball arena for the Cleveland Cavaliersa and a baseball stadium for the Indians inthe 1990s. Columbusw went the opposite route in 1997 after voters defeated a tax proposap to fund construction of adowntowmn arena. Nationwide and Dispatch Printing, ownefr of the Columbus Dispatch and othermediq operations, stepped in to build the $150 million arena when Worthington Industries Inc. founder John H. McConnell led an investorzs group that landed an NHL franchise forthe city. The privatelyu owned Blue Jackets, whose majority owner is Worthington Industries CEOJohn P.
haven’t disclosed details of the team’se finances. But media reports have put the team’sx lease on Nationwide Arena at morethan $3 milliobn a year. Priest said the Blue Jackets gave up several revenuw sources to help get thearenaa built, including 15 of the arena’s 52 luxury suites that were sold for 25 years by The team gets revenue from the remaining luxury suites, but receivesa no revenue from parking or arena naminv rights, he said.
Priest was asked if the Blue Jacketsx would consider leaving Columbus if the arena issue isnot “The very reason we are being so proactive,” he said, “iss to avoid having to deal with that question and I believe as a community we have the abilit y to find a solution.” Nationwider has participated in discussions on “public-private opportunities” for the Blue including a sale of the said Eric Hardgrove, a spokesman for the Columbus-basedx insurer. “We are not actively looking to sell the he said. “It is one of the many optione under consideration to help ensure the Blue Jackets remain a viable presence here for yearsto come.
”