One of the few good models of a privately funded sports facility may be about to get a whole lot less, uh, modely. A government task force put together to resolve the Columbus Blue Jackets‘ demands to be bailed out of their lease at their 11-year-old, privately built arena has come up with a plan that would go like this:
- Columbus’ Convention Facilities Authority, a combined city-county entity, would buy the Nationwide Arena from its private owners, Nationwide Insurance and the Columbus Dispatch, for $42.5 million, and take over management and operations. The city and county would pay off the purchase price with part of its share of revenue from the state’s four new casinos, just as the Blue Jackets owner requested last summer.
- The Blue Jackets would stop paying rent, currently running about $9.5 million a year. It would also extend its arena lease through 2039, which doesn’t sound like much of a concession when it’s a lease where you pay no rent.
- Nationwide would buy a 30% minority share in the Blue Jackets for $52 million, as well as signing a 10-year, $28.5 million naming rights deal to keep its name on the building it would no longer own. That money would go, naturally enough, to the Blue Jackets, even though they 1) didn’t build the arena, 2) wouldn’t own the arena, and 3) wouldn’t even be paying tenants, thanks to that whole free rent thing. Effectively, then, the team would be getting paid $2.85 million a year to play in Columbus.
So what’s in this for whom, exactly? Well, the Blue Jackets, who say they’re currently losing $12 million a year, would get that $9.5 million a year rent break plus $2.85 million a year in naming-rights money, effectively putting them in the black in one fell swoop. Nationwide would take a bath on its $175 million construction cost, getting only $42.5 million in return, and having to cough up naming-rights money as well. As for city and county taxpayers, they’d be giving up several millions of dollars a year in casino revenues in exchange for an arena whose primary tenant would be paying no rent — so how that works out for them will likely depend on whether it’s possible to pay operations costs on an arena off of just Lady Gaga concerts and monster-truck shows.
Or, as Columbus City Auditor Hugh Dorrian put it to Columbus Business First (in the newspaper’s words): “The deal will not raise taxes and won’t take money away from capital projects and city operations.” Oy!
The plan still has to be approved by the Columbus City Council, the Franklin County Commission, and the Franklin County Convention Facilities Authority.