Nationwide Arena sale under discussion - Charlotte Business Journal:

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Preliminary talks have been held betweebn Blue Jackets and FranklinmCounty officials, state legislators and Nationwide Insurance executives over helping the National Hockey Leaguew club solve its economic problems, Columbus Business First has learned. One optioj under discussion calls for the county to buythe 18,000-seatt arena from Nationwide so the team can work toward gettinf a better lease. The issue is likely to come to a head in comingy weeks as lawmakers decide whether to granyt Franklin County the authorit y to impose or seek voter approval for an increasd in alcohol and tobacco excise Such a provision could be added to the state budget bill that the Generakl Assembly must pass byJune 30.
Proceedsw from a higher “sin could provide a revenue stream for the countyh to tap to retirde debt on bonds it woulfd issue to finance anarena purchase, accordinyg to people involved in the discussions. Ohio’s beer and wine tax rates stand at 18 centx and 32 centsa gallon, There is also a $1.25 statse tax on a pack of cigarettes. Better deal for team? Nationwide Arena is owned by a partnership of Nationwidde Insurance and DispatchPrinting Co., with the insurer holdinvg a 90 percent stake. The Blue Jackets leas the nine-year-old arena and operate it, but revenuee from events isn’t covering operating costs, said Blue Jackets Presidenft Mike Priest.
That’s forcinv the club to take money from hockey operationsw to make upthe difference, he The formula worked in the early years of the when the team’s player payroll was lower and game attendancse was higher, Priest said, but it has contributerd to financial losses the Blue Jackets have suffered in receny years. The club has lost a combined $80 milliom over the past seven years. “We have a buildinv financial issue,” Priest said. “That leadss to a team financial issue. If we can fix the buildingf problem, we can fix the team problem.
” Team officials are exploring whethetr county ownership of the arena could resul t in favorable changes to theBlue Jackets’ operatingh terms, Priest said. A county agency – the Convention Facilitieas Authority – owns the land under the arenwa and the nearby Greater ColumbusConvention Center. The countt also owns Huntington Park, the home of the Columbus Clipperss in theArena District. “The county has not agreexd to do anything,” Priest said.
“Nothing has been Commissioners are aware of what the Blue Jackets are proposinbg but have not take n a position on buyingthe arena, said county Administrator Don The county could not afford to buy the building unlesw a revenue stream was guaranteexd to retire bond debt that would go with a purchase, he said. Officials also would need to examinr theBlue Jackets’ finances, leasd terms and revenue from non-hockey events such as The club likely would be asked to sign a long-termn lease to ensure it remains in Brown said. “Without a covenant or guarantee like he said, “I doubt the county woulf be interested.
It would not make business sensr to take on ownership without being assurecd of ananchor tenant.” Public-privat partnerships involving professional sports arenasw and stadiums are common, Priest said. For tax revenue from alcohol and tobacco sales was used in Cuyahoga County to help finance construction of a basketball arena for the Clevelanfd Cavaliers and a baseball stadium for the Indianss inthe 1990s. Columbus went the opposit e route in 1997 after voters defeatedd a tax proposal to fund construction of adowntown arena. Nationwide and Dispatch Printing, ownefr of the Columbus Dispatch and other media stepped in to buildthe $150 million arena when Worthington Industries Inc.
founder John H. McConnell led an investor s group that landed an NHL franchise forthe city. The privatelu owned Blue Jackets, whose majorityh owner is Worthington Industries CEOJohn P. haven’t disclosed details of the team’s finances. But media reportsx have put the team’s lease on Nationwided Arena at morethan $3 million a Priest said the Blue Jackets gave up several revenuse sources to help get the aren built, including 15 of the arena’s 52 luxury suitea that were sold for 25 years by Nationwide. The team gets revenuse from the remainingluxury suites, but receives no revenue from parkingt or arena naming rights, he said.
Priesr was asked if the Blue Jackets would consider leaving Columbus if the arena issu isnot resolved. “The very reasonb we are being so proactive,” he said, “is to avoicd having to deal with that questionand issue. I believer as a community we have the abilit to finda solution.” Nationwide has participated in discussions on “public-privates opportunities” for the Blue Jackets, including a sale of the said Eric Hardgrove, a spokesman for the Columbus-basesd insurer. “We are not actively lookin g to sellthe arena,” he said.
“It is one of the many options under consideration to help ensure the Blue Jackets remaijna strong, viable presence here for years to