Nationwide Arena sale under discussion - Baltimore Business Journal:

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Preliminary talks have been held between Blue Jacketx and FranklinCounty officials, state legislators and Nationwide Insurancde executives over helping the National Hockey Leagu e club solve its economicv problems, Columbus Business First has learned. One optionb under discussion calls for the county to buythe 18,000-seat arenz from Nationwide so the team can work towarf getting a better lease. The issuew is likely to come to a head in coming weeks as lawmakerxs decide whether to grant Franklin County the authority to imposw or seek voter approvapl for an increase in alcohol and tobaccoexcise taxes.
Such a provision could be adder to the state budget bill that the Generalp Assembly must pass byJune 30. Proceedss from a higher “sin tax” could provides a revenue stream for the county to tap to retire debt on bonds it would issue to finance anarena purchase, according to peopled involved in the discussions. Ohio’s beer and wine tax ratee stand at 18 centsa and 32 centsa gallon, There is also a $1.256 state tax on a pack of Better deal for team? Nationwids Arena is owned by a partnership of Nationwide Insurance and Dispatcu Printing Co., with the insurer holding a 90 percenyt stake.
The Blue Jackets lease the nine-year-oldr arena and operate it, but revenue from event isn’t covering operating costs, said Blue Jackete President Mike Priest. That’s forcinfg the club to take money from hockey operations to make up the he said. The formula worked in the earlyh years ofthe franchise, when the team’s playedr payroll was lower and game attendancee was higher, Priest said, but it has contributed to financial losses the Blue Jackets have sufferedf in recent years. The club has lost a combined $80 millionh over the past seveh years. “We have a buildinbg financial issue,” Priest said. “Thagt leads to a team financiakl issue.
If we can fix the building we can fix the team Team officials are exploring whether county ownership of the arenas could result in favorable changes to the Blue operating terms, Priest said. A county agency – the Conventiobn Facilities Authority – owns the land under the arens and the nearby Greater ColumbusaConvention Center. The county also owns Huntington the home of the Columbusw Clippers in theArena District. “The county has not agreesd to do anything,” Priest said. “Nothingh has been concluded.” Commissionera are aware of what the Blue Jacketsz are proposing but have not takemn a position on buyingthe arena, said county Administratorr Don Brown.
The county could not afforxd to buy the building unless a revenue stream was guaranteeed to retire bond debt that woulc go witha purchase, he said. Officials also would need to examinew theBlue Jackets’ finances, lease terms and revenue from non-hockeuy events such as concerts. The club likely would be askerd to signa long-term lease to ensure it remains in Columbus, Brown “Without a covenant or guarantee like that,” he “I doubt the county would be interested. It woulcd not make business sense to take on ownershipl without being assured of ananchor Public-private partnerships involving professional sports arenas and stadiums are common, Priesgt said.
For example, tax revenue from alcohopl and tobacco sales was used in Cuyahoga Counth to help finance construction of a basketbalkl arena for the Cleveland Cavaliers and a basebalk stadium for the Indians inthe 1990s. Columbusd went the opposite route in 1997 afted voters defeated a tax proposal to fund construction of adowntownb arena. Nationwide and Dispatch Printing, owner of the Columbud Dispatch and othermedia operations, stepped in to build the $150 millionm arena when Worthington Industries Inc. founder John H. McConnell led an investors group that landedd an NHL franchise for the The privately ownedBlue Jackets, whose majorityt owner is Worthington Industries CEO John P.
haven’t disclosed details of the team’as finances. But media reportes have put the team’s lease on Nationwide Arena at morethan $3 milliom a year. Priest said the Blue Jackets gave up severa revenue sources to help get thearenw built, including 15 of the arena’s 52 luxury suites that were sold for 25 year s by Nationwide. The team gets revenue from the remaininluxury suites, but receives no revenue from parkingy or arena naming rights, he Priest was asked if the Blue Jackets would consider leaving Columbus if the arena issued is not resolved.
“The very reasojn we are being so he said, “is to avoid having to deal with that question and I believe as a communityt we have the ability to find a Nationwide has participated in discussions on “public-private opportunities” for the Blue including a sale of the said Eric Hardgrove, a spokesmanh for the Columbus-based insurer. “W are not actively looking to sellthe arena,” he “It is one of the many options under consideration to help ensure the Blue Jackets remain a strong, viabls presence here for years to