Veteran journalist Carl Hoffman believes he’s solved one of the great mysteries of the 20th century. In 1961 at the age of 23, Michael Rockefeller – son of New York Governor Nelson Rockefeller and a member of one of the richest and most powerful families in America ¬– travelled to remote New Guinea in search of primitive art for his father’s new museum.
Nationwide Arena Deal: Who Gets What?
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Columbus City Council votes on Monday whether to endorse a deal that would make Nationwide Arena a taxpayer-owned facility. City and county leaders say it’s a good deal, ensuring millions of tax dollars continue to flow from the hip, entertainment district surrounding the arena. WOSU takes a look at who gets what out of the deal.
If all goes as planned Nationwide Arena soon will be owned by taxpayers of Franklin County and City of Columbus. Mayor Michael Coleman said it’s the only way to save the Arena District.
“To avoid a blighted building, and investment, and to encourage an investment in jobs,” he said.
But critics, like City Council Candidate Matt Ferris, say taxpayers should not bear the burden.
“We can’t keep backing projects that are hemorrhaging money,” Ferris said.
Despite the criticism, the city and county will use about $10 million a year in casino tax money to pay for the arena. The Franklin County Convention Facilities Authority – or the CFA – would run the facility and the Blue Jackets get free rent.
So, let’s look at the numbers and see who’s getting what. Let’s look at what taxpayers are getting for their money.
Back in the late 90s Nationwide spent $156 million to build the arena. And now it’s selling it to the city and county for less than a third of that – $43 million.
Franklin County Auditor Hugh Dorrian suggests,” If we were to replace that facility today it would be in the neighborhood of a cost structure of probably $300 million.
Getting a 10 year old arena for a third the cost sounds good, but court documents show Nationwide was prepared to lose money on the arena from the start. In a 2003 tax valuation lawsuit, Nationwide attorney John Zeiger said the company saw it could “make up for the losses on the arena” by developing the property around it.
And Nationwide has cashed in on the development around the facility.
A study by the OSU John Glenn School found property valuations increased an extraordinary 267 percent in the ten years after the arena was built. Much of that property is owned by Nationwide.
“We’ve got an economic engine in this Arena District.”
As for its loss on the arena, Nationwide expects some tax savings because the company has taken a $40 million tax write off.
And don’t forget Nationwide is lending the CFA the money to buy the arena. Over the course of the loan, Nationwide will collect some $104 million in interest.
So what about the Blue Jackets? What kind of deal are they getting? They save $3 million in rent. They get $28 million in naming rights – from Nationwide – that they don’t get now. The team keeps all the revenue from concessions sold during hockey games.
And the team gets a new investor – Nationwide – which is buying a 30 percent stake in the team. But because of that Nationwide, now as part owner, would seem to benefit from hockey concessions.
So what does the city and county get?
It keeps non-hockey ticket revenue and concessions and some parking revenue.
But the head of the convention and facilities authority Bill Jennison admits that revenue will go to cover expenses.
“Initially, no, there will not be any money quote made on the arena,” he said.
But government and business leaders argue the real benefit is the non-arena revenue.
“Multi-millions. Many multi-millions.”
City Auditor Hugh Dorrian said the arena district generates $30 million dollars a year just in income tax revenue. And that OSU Glenn School Study, it found the Arena District has an economic impact of 300 million dollars a year. For city and business leaders that’s the number they fear will shrink if they don’t save the Blue Jackets.