Columbus declares “no backsies” on Blue Jackets arena bonds, kicks ballot measure back to elections board

The city of Columbus has finally figured out how to respond to that campaign for a public vote on undoing the Blue Jackets arena bailout deal from 2011, and it’s to just declare the whole thing illegal and let the county board of elections sort things out:

At its first meeting of the year, the city council voted to send petitions to put the issue on the spring ballot back to the Franklin County Board of Elections, to determine whether the petition language meets requirements to get it on the ballot.

It’s unclear when the elections board would decide that issue…

City Attorney Richard C. Pfeiffer Jr. said yesterday that the proposal is invalid because voters cannot overturn the contract, which is to purchase the arena and operate it through 2039.

“The lease documents have been executed roughly two years ago, and this ordinance passed by council made it through the 30-day referendum period without a challenge,” Pfeiffer said. “The proposal would have no legal effect if approved.”

That’s what the initial response was to the plan for a vote on defaulting on the arena bond payments (including from me), but plenty of Ohio legal experts have since said that the initiative is totally legit. Whatever the board of elections decides, expect to see lawsuits challenging its ruling from the losing side, which means this could drag on for quite a while. What happens if a court case is still ongoing when it’s time to vote in May, I have no idea — anybody have an Ohio legal expert handy?

Columbus ballot measure to stop payments on Blue Jackets arena purchase set for May

As of yesterday afternoon, the Columbus arena backsies initiative already had enough signatures verified to qualify for the ballot, which means local voters will go to the polls next May to decide whether to stop automatic payments on the $42.5 million in bonds the city and county sold to buy the arena from its private builders back in 2011. (Actually the county sold the bonds, but the city and county both committed to paying them off — here, read the whole convoluted process for yourself, if you dare.) Future payments would then need to be approved by voters in a second ballot measure in November — which means all legal hell is about to break loose:

If approved by voters, the coalition wants that second vote to occur in November.

The initiative is likely to face legal challenges. Franklin County, Ohio State University, the Franklin County Convention Facilities Authority and the state also were part of the arena purchase. Their contracts are not subject to the vote.

City Attorney Richard C. Pfeiffer Jr. and elections officials said they are trying to determine whether such a two-part vote can be put on the ballot with one set of petitions.

“We are still looking into the matter, but those are the right questions to ask,” Pfeiffer said.

Another question city officials are asking: Can voters legally overturn a contract that the city already has signed?

In that 2011 deal, Columbus also exempted the Blue Jackets from making their annual $9.5 million rent payments — adding up to a far bigger subsidy than the actual purchase price, even in present value — but that wouldn’t be affected by the May vote. (According to the petition, which the Columbus Coalition for Responsive Government finally got posted properly on its website.) Still, it would be unprecedented for a city to stop payments on an arena deal it already made, which is why Columbus and Franklin County elected officials are no doubt scrambling their lawyers as we speak.

Legal experts say Columbus referendum to defund arena bailout could have teeth

Before anyone asks: No, I didn’t skip posting anything yesterday just in order to keep the appeal for new FoS Supporters at the top of the page. (Big thanks to everyone who’s joined so far, though!) Yesterday was just one of those days where I was slammed from morning till night, and didn’t have time to visit the stadium world.

That means that today we need to play extra catchup, though, so let’s get to it:

It turns out that that crazy plan to hold a referendum to overturn Columbus’s 2011 Blue Jackets arena bailout isn’t so crazy after all, or isn’t necessarily crazy, or something like that. Two legal experts tell Ohio NPR station WOSU that the ploy might just hold up in court:

“Citizens can do this,” Ohio State Moritz College of Law Professor Dale Oesterle said.

Oesterle said Columbus City Charter allows voters to put an initiative on the ballot to create a new ordinance.

“This is an effort to put a new ordinance on the books which, in essence, affects the operation of an old ordinance that they disagree with. It’s very clever, actually.”

Oesterle says the law is unclear on what would happen if a new ordinance to stop payments on the arena were put into effect; another Ohio State law professor, meanwhile, Stephanie Hoffer, said that Columbus’ Convention Facilities Authority might have to go into default if this happened.

It’s still pretty inconceivable that Columbus would let things get this far — depending on how the referendum is worded, it could try to come up with other money to use to pay for the arena that it took off the Blue Jackets’ hands two years ago. (Hey, Minneapolis pulled it off.) But this referendum campaign is more clever than I gave it credit for, and likely to be watched closely in other cities with citizens who regret past stadium and arena deals, which is a whole lot of places.

Columbus set to hold public vote on defaulting on Blue Jackets arena bonds (but won’t actually do it regardless)

I don’t even know where to start with this:

A citizens group trying to change Columbus politics has turned in petitions seeking a ballot initiative to stop the city from paying on its purchase contract for Nationwide Arena.

The Columbus Coalition for Responsive Government submitted 17,200 signatures to the Columbus city clerk’s office yesterday to amend the purchase ordinance and stop payments to buy the arena by 2016.

While it’s a nice idea to try to undo a money-losing public bailout deal for the Blue Jackets from 2011, um, no, residents of a city can’t just vote to refuse to make good on contracts that the city already entered into. Or rather, they can apparently vote on it — if the petitions hold up, the referendum would be held — but it’s not going to stop the city from being obligated to make those payments. Or else I could suggest some other things we might vote to stop paying for.

The Columbus Coalition for Responsive Government is … well, the group is still rebuilding its website after it was hacked (in August, wha?), but it looks like it’s mostly dedicated to improving transparency in local government — one of its primary goals is “We support the return of public access television to the people.” (Its Facebook page features a cartoon of, man, I have no idea what’s going on there.) I’d cite the arena petition itself, but that page directs to an unrelated petition on district governance — curse you, hackers! — so it’s hard to say much more.

Except that clearly, enough people in Columbus are ticked off about the arena bailout that they’ll sign anything opposed to it, no matter who’s waving it in their faces and whether it will actually do anything. This is going to be the funnest ballot measure ever!

After public bailout, Columbus arena now making money, except for the making money part

Hallelujah! Just two years after getting bailed out by a public purchase costing $42.5 million plus $9.5 million a year in lease breaks, the Columbus Blue Jackets’ Nationwide Arena is set to turn a profit this year, according to Columbus Business First:

Nationwide Arena is on track to finish its fiscal 2013 with a $500,000 operating profit, even though arena managers had planned for a $260,000 loss when they put together the budget a year ago.

How did it manage this? Well, it helped that part of the NHL season was wiped out by a lockout, because apparently the arena spends so much on running hockey games that it loses money on them. (Admittedly, this isn’t tough when the Blue Jackets’ revised lease says the team doesn’t have to pay rent.) Plus, it’s getting about $4 million in subsidies from the Franklin County Convention Facilities Authority. And finally, it isn’t actually making money, since a projected shortfall this year is being covered by a surplus from 2012.

But not to worry: So long as the NHL keeps cancelling games, and the public keeps underwriting the arena’s losses, Columbus can look forward to years more of an arena that only bleeds money slowly. And headlines about how this is actually a “profit,” because that’s what newspapers do.

NHL lockout threatens small business owners with crushing weight of boredom

One more “OMG the hockey lockout is costing businesses money!” story today, from NBC4 in Columbus, which reports that “many businesses in the Arena District” are hoping for the lockout to end, because:

“I think for the good of the game, I think both sides know that they have to get there,” said Mike Darr, owner of the R-Bar Arena.

Darr said it would be nice to have the extra revenue from hockey fans coming in, but the lockout has not hurt his business too much.

“It’s still a fun area to hang around in. There are a lot of neighborhoods, we are kind of a neighborhood bar also. It’s not been detrimental. It’s just sometimes been boring,” Darr explained.

Darr is the only arena-area small business owner quoted, so it’s hard to say how typical his experience is. Still, somebody might want to pass along to the city and state officials wringing their hands over lost tax revenues that people haven’t stopped drinking beer now that hockey is no longer being played — they’re just crying into it instead. Or rather, given that it’s the Blue Jackets we’re talking about, crying into it even more than usual.

No, Virginia, there isn’t an NHL lockout economic crash

The other holiday news tradition, of course, is to slack off from actual reporting by writing vague analysis pieces on things that aren’t really new news, like the NHL lockout, since you can write them anytime in December and then keep them in the can until Christmas week. Last Thursday it was San Jose Inside asserting that the lockout is hurting local businesses; on Sunday, it was the Columbus Dispatch claiming that local government is losing millions of dollars because the Blue Jackets aren’t playing:

Roosting birds outnumber rowdy fans lately in Nationwide Arena, left empty most nights during the bitter NHL lockout.

It’s an attendance figure that is not lost on state, Columbus and Franklin County officials, who estimate they’ll lose $3 million to $4 million in tax revenue if the NHL season is canceled.

That sum represents lost income taxes from players and other workers associated with hockey, and sales taxes from concessions, restaurants and other commercial activity near the arena, which the city and county bought last year.

Really? Do we have to go over this again? Okay, fine: Yes, people are spending less money at the arena because there’s no hockey. And yes, that means less sales tax money from spending around the arena going into public coffers.

It doesn’t mean less sales tax money overall, though. As I’ve noted before, studies of sales tax revenues in cities during sports work stoppages found “no statistically significant effect on taxable sales is found from the sudden absence of professional sports due to strikes and lockouts.” That’s because when people aren’t spending their money on hockey, they’re usually spending it on something else — and they’re almost certainly spending it within the same state and county, and given that Columbus has become the largest city in Ohio by annexing every suburb in sight, likely within the city limits, too. So if tax revenue is going down in downtown Columbus, it’s likely going up everywhere else.

And while the county is now the owner of the arena (since it bought out the arena from its private owners as a bailout of the Blue Jackets last year), it only gets to collect parking and concessions sales for non-hockey events — so if anything, the county should be in a position to bring in slightly more money since there are fewer hockey dates cluttering up the schedule. Emphasis on “slightly,” though, since it’s tough to book vacant dates when the NHL has so far only been cancelling games a few weeks in advance. Still, even in its capacity as arena manager, the lockout shouldn’t be hurting local government revenues.

A more honest headline, then, would have been “NHL lockout has both tax costs and benefits.” And maybe reporter Lucas Sullivan could have called one of the five economists who’ve studied the economic effects of strikes and lockouts for comment, instead of the only quotes coming from county and league officials. Hey, it’s nice to want things.

Blue Jackets bailout clears Columbus council

The Columbus city council approved the public-private bailout of the Columbus Blue Jackets yesterday, putting that deal one step closer to fruition. The mayor and the county commission still need to sign off on it, but that seems pretty likely, as the plan has widespread support:

“So many neighborhoods are literally dying,” Smith said. “To do this right now is morally indefensible. We need to focus on our critical needs — infrastructure and the well-being of our citizens.”

Whoops, wrong quote: That’s actually Columbus mayoral candidate Earl Smith, who says it’s a lousy deal, since Columbus would be giving up casino revenue that could otherwise go to serve other needs, in exchange for uncertain economic benefits. It doesn’t look like there’ll be much that Smith can do about it even if he takes office in January, though — and in any case, as we’ve seen, it’s all too common for stadium-skeptic mayoral candidates to have changes of heart once they’re the ones in the lobbyists’ crosshairs.

Columbus panel proposes public-private bailout of Blue Jackets

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.

Columbus on Blue Jackets bailout: No money, ask again later

If you want a parable explaining how the economy’s impact on state finances is affecting stadium and arena campaigns, look no further than Columbus, where two years ago the Blue Jackets‘ demanded a state bailout of their privately owned arena. And two years later, that demand is still “in a state of pause,” according to the lawyer trying to broker a deal.

The Columbus Dispatch continues:

That pause accompanies uncertainty about the state budget and whether tax revenue from a casino could be part of a solution. The casino developer has sued the city and county in a case that could decide how much tax revenue Columbus receives from the project.

The casino plan sounds like a mess right now — there are actually two lawsuits, including one over whether the suburban casino site will get annexed to the city — and the state budget is equally messy. Still, it’s worth noting that this is just a “pause,” not a rejection, and Columbus Mayor Michael Coleman said all the requisite team-friendly things about how he doesn’t want to cause “rippling economic consequences” if the hockey team were to move: “I do not want to lose the Blue Jackets. I don’t know much about hockey, but I do know about economic development.” (Apparently Coleman doesn’t know much about the substitution effect, either.)

The upshot: Local government budget crises are putting stadium and arena plans on hold, but the back burner remains lit. And team owners, even those losing $12 million a year like the Blue Jackets claim to be, can afford to sit and wait in hopes for a nine-digit payday; what else are they going to do, all move to Winnipeg at once?