Columbus throws another $62.3m in tax money on Blue Jackets arena fire

Once upon a time, the Columbus Blue Jackets‘ Nationwide Arena was a privately funded success story, with locally based insurance company Nationwide helping to underwrite construction costs in exchange for a cut of arena revenues (and their name on the thing). Then came the county bailing out the Blue Jackets owners by taking over ownership of the arena, and a new ticket tax to help pay for arena renovations. And now it’s been revealed that the city and county are working on “restructuring” Nationwide’s $44.2 million loan to funnel new tax money into it:

Nationwide, which built the arena through a limited liability company and loaned the authority $44.2 million to buy it, has never received any payments in return because casino-tax revenue backing the loan never generated what was estimated…

Though Columbus officials had repeatedly stressed that the risk on the loan was solely Nationwide’s should casino-tax revenue come up short, the city has now also contributed to the deal, restructuring tax-increment-financing agreements on Nationwide properties to, in effect, let Nationwide repay itself from its future property taxes…

The memorandum indicates that city TIF funds could generate up to $10.8 million toward repaying the loan.

The city’s contribution would be on top of a one-time, lump-sum payment in December 2029 of $51.5 million from the authority, according to the memorandum. Brown said the authority will make the payment by issuing new bonds backed by casino taxes and hotel revenue from its lease with Hilton Columbus Downtown.

On the one hand, Nationwide was already set to get public money to repay its loan, via those casino tax revenues. On the other, it agreed to take payment from the casino tax funds, and now that those aren’t turning up as expected (apparently Columbus residents just don’t love to gamble like they should, or else are too busy going to Blue Jackets games), this is $62.3 million in new money being allocated to Nationwide. Either way it’s not good news for Columbus residents, and has to be especially galling since the city’s then-auditor said in 2011 that the city’s commitment if the casino revenue fell short was “none.” No word yet on when the city and county will be voting to approve the deal, but one can expect they’ll be getting an earful at that time.

10 comments on “Columbus throws another $62.3m in tax money on Blue Jackets arena fire

  1. Columbus residents aren’t necessarily anti-gambling, but aren’t enthusiastic about where they decided to put the one and only casino.

  2. Professional sports…. the gift that keeps on taking.

    Yet another example of good money being thrown after bad.

  3. If one remembers correctly, Franklin county residents voted against the casino to begin with… no surprise then that the promised revenues aren’t being generated.

    • Note to self: Lexicon change. TIF doesn’t mean “tagged image file format.” TIF means “tax increment financing.”

      • “Tagged image file format” was always TIFF. If Bill Gates told you to jump off a three-letter bridge, would you do it?

        And Happy Decemberween, everybody!

        • Uh-oh! I’ll take that as a no, sitting at “msg” (Madison Square Garden) in your “xls” (leXis Luxury Suite). Damn! There goes my chance to be seen with the man who founded “Field OS.”

  4. Nationwide has made a fortune off the entire arena district. A 99 year abatement for the development of the neighborhood and now the city will pay for an arena that nationwide was magnanimous in building “For the City”.

  5. Countdown to Cleveland politicians demanding more? Threats of MLB relocation to Nashville?

    Worth remembering that Cleveland was told the arena needed upgrades to “compete” with Columbus and Pittsburgh for concerts.

  6. Now that the initial boom around legal marijuana has abated, the reality is that tax revenues, while not insignificant, have not been anywhere near as high as they were projected to be. And that’s often what happens with sin taxes, be it gambling or legal marijuana, that the tax revenues simply don’t add up because there is only so much demand and in the case of gambling, often just shifts demand from one locality to another. The next big sin tax to be funneled to poor ideas will be nationwide sports betting.