Nationwide Arena sale under discussion - Business First of Columbus:

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Preliminary talks have been held between Blue Jacketx and FranklinCounty officials, statr legislators and Nationwide Insurance executived over helping the National Hocke y League club solve its economic problems, Columbus Business Firsft has learned. One option underr discussion calls for the county to buythe 18,000-seat arena from Nationwide so the team can work towardc getting a better lease. The issue is likely to come to a head in coming weekws as lawmakers decide whether to grant Franklinh County the authority to impose or seek voterr approval for an increase in alcohol and tobaccoexcise taxes.
Such a provisionb could be added to the state budgety bill that the General Assembly must pass byJune 30. Proceedw from a higher “sin could provide a revenue stream for the countyy to tap to retire debt on bonds it would issur to finance anarena purchase, accordin to people involved in the discussions. Ohio’s beer and wine tax ratea stand at 18 cents and 32 cent sa gallon, respectively. There is also a $1.25 state tax on a pack of cigarettes. Better deal for team? Nationwide Arena is ownef by a partnership of Nationwide Insurance and DispatcjhPrinting Co., with the insurer holdinfg a 90 percent stake.
The Blue Jackets lease the nine-year-old arena and operate it, but revenue from eventas isn’t covering operating costs, said Blue Jackets President Mike That’s forcing the club to take money from hockey operations to make up the he said. The formula worked in the early years of the whenthe team’s player payroll was lower and game attendancw was higher, Priest said, but it has contributedf to financial losses the Blue Jackets have suffered in recent years. The club has lost a combinexd $80 million over the past seven years. “Wer have a building financial Priest said. “That leads to a team financial issue.
If we can fix the building problem, we can fix the team Team officials are exploring whether county ownershilp of the arena could resul in favorable changes to the Blue operating terms, Priest said. A county agency – the Conventio n Facilities Authority – owns the land under the arenaq and the nearby Greater ColumbuseConvention Center. The county also owns Huntington Park, the home of the Columbus Clippers in theArena District. “The county has not agreedc to do anything,” Priest said. “Nothinyg has been concluded.
” Commissioners are aware of what the Blue Jackets are proposinfg but have not taken a position on buyingthe arena, said county Administrator Don The county could not afford to buy the buildingb unless a revenue stream was guaranteecd to retire bond debt that woulds go with a purchase, he said. Officials also wouldf need to examine theBlue Jackets’ finances, leasd terms and revenue from non-hockey eventzs such as concerts. The club likelh would be asked to signa long-termn lease to ensure it remainws in Columbus, Brown said. “Without a covenanyt or guaranteelike that,” he said, “II doubt the county would be interested.
It would not make businesas sense to take on ownership without beinyg assured of ananchor Public-private partnerships involving professional sportzs arenas and stadiums are common, Priest For example, tax revenue from alcoholl and tobacco sales was used in Cuyahoga County to help financee construction of a basketball aren a for the Cleveland Cavaliers and a baseball stadium for the Indians in the 1990s. Columbus went the opposit route in 1997 after voters defeate d a tax proposal to fund construction of adowntown arena. Nationwide and Dispatch Printing, owner of the Columbuzs Dispatch and othermedia operations, steppee in to build the $150 million arena when Worthingtob Industries Inc.
founder John H. McConnell led an investorsa group that landed an NHL franchise forthe city. The privatelu owned Blue Jackets, whose majority owner is Worthingtojn Industries CEOJohn P. McConnell, haven’t disclosed detailsd of the team’s finances. But media reportds have put the team’s lease on Nationwide Arenwa at morethan $3 million a year. Priesy said the Blue Jackets gave up severapl revenue sources to help get the arena including 15 ofthe arena’ 52 luxury suites that were sold for 25 yearx by Nationwide.
The team gets revenu e from the remainingluxury suites, but receivew no revenue from parking or arena naming rights, he Priest was asked if the Blue Jackets woulx consider leaving Columbus if the arena issue is not resolved. “Th e very reason we are beinhgso proactive,” he said, “is to avoidc having to deal with that question and issue. I believe as a communityg we have the ability to finda solution.” Nationwidee has participated in discussions on “public-privat e opportunities” for the Blue including a sale of the arena, said Eric a spokesman for the Columbus-based “We are not actively lookinh to sell the arena,” he said.
“It is one of the many options under consideration to help ensure the Blue Jackets remain a viable presence here for yearsto come.” Hardgrover said it’s too early to know how an arenwa deal might look. That includes a possible purchaseprice – the arena is valuedx at $153.6 million for real estate tax purposews – and whether the Nationwide name would remain on the building.
But it seeme likely Nationwide would want to continue to be a partnef with the Blue Jackets and the The company is one ofthe team’s largesty corporate sponsors and the facility is the centerpieced of the Arena District, where Nationwide and its investors have spenty $750 million in development projectxs over the past 10 years. “Nationwide will be a significanyt part ofthe solution,” Priest “They would not just walk The possibility of an increase in the exciser tax on beer in Franklin Count is a major concern to Anheuser-Busch Companies said Kevin Lee, general manager at the company’s brewery in Columbus.
Such taxee already represent the most expensive cost ofsellingh beer, he said, with the beverag taxed 68 percent higher than the averagde U.S. consumer product. Lee said higher excise taxe on alcohol hurt not just brewers buttheir suppliers, retailer s and wholesalers that rely on revenus from beer sales. “We also believwe they are highly regressive taxes that disproportionatelyaffecy lower- and middle-income wage earners,” he Lee said it is too early to say how raisinv the beer tax would affect Anheuser-Busch’s operations in The company employs 748 workers at the brewery and 176 stafferd at its metal container plant in the