Hey, how are things going for Nationwide Arena, home of the Columbus Blue Jackets, since Franklin County bailed out its private builders almost five years ago? Let’s see:
A modest uptick in casino-tax revenue will allow Nationwide Arena to go forward with one major maintenance project — replacing part of the heating and cooling system — but officials continue to search for ways to fund a goal of $2 million in updates and repairs each year…
The arena, which was taken over by the facilities authority in 2012, made a net operating profit of just under $250,000 in the first half of its fiscal year, from July through December; event revenue was $10.8 million.
Beyond an annual $2.1 contribution from the facilities authority, virtually all of the arena’s revenue comes from rental income.
So, same as last time we checked in: The arena is turning a small operating profit, but only because the county is shoveling tax dollars at it every year. So while it’s good news that casino taxes have rebounded from their dip a couple of years ago that left the county in danger of defaulting on its bonds, all this means is that the county hasn’t yet run out of money to shovel, at least not until something else at the arena breaks and needs repairs.
This is a reminder of two things: One, most new arenas don’t bring in enough money to come close to paying off their construction debt, if the reports out of Kansas City hadn’t already convinced you of this. And two, it’s a really bad idea to take over responsibility to repairing an arena that your local sports team built, while letting the sports team keep all the revenues that are needed to make the actual repairs.
In fact, if you’re a local elected official reading this, maybe you should print out that last paragraph and glue it to your computer monitor. It won’t guarantee you of being saved from Columbus’s fate, but it’ll at least give you a better shot.
So it’s reminiscent of Glendale, Arizona? If they didn’t have a long lease, I wonder if the Blue Jackets would also be in the hunt for Seattle or Portland.
Alex, the mayor in Columbus pitched the league for a NBA team in 2012 so they have their own ideas of going big. That pitch makes more sense than a Browns practice facility.
And the Vikings Stadium that is not even done yet has a leaky roof requiring a $4 million repair….?
What is it with the Twin Cities and leaky roofs, the science museum has a major problem with it too.
Have you seen that part of Columbus before and after the arena was built?
Aqib,
Isn’t it the old old story? Correlation/causation? Columbus is a growing city (one of the few in Ohio, as you probably know). What if Columbus built a good park system there, which also tends to raise investment and property values? Maybe that would be a cheaper way to spruce the neighborhood up.
“What is it with the Twin Cities and leaky roofs, …”
Insanely cold temperatures that make everything brittle, expansion and contraction?
GDub –
The arena was financed by Nationwide as was the rest of the Arena District. It was a package deal. So whatever debt service and expenses are associated with the arena you have to consider pretty much any property and sales taxes in the surrounding area as part of the revenues stream. While people wouldn’t stop spending money if there was no arena or hockey team they wouldn’t necessarily spend it in Columbus. I a place like Ohio where sports are such a big part of the culture people in Columbus would drive to Cinci or Cleveland for events.
While Columbus is growing it is extremely sprawled out. A large part of CBus’s growth has been as a result of annexing suburbs. Like a lot of cities in Ohio you need something to draw people into the urban core otherwise people won’t go. There are plenty of people in the Cleveland area for example who would never go downtown at all if it wasn’t for an event at one of the venues.
It gets nearly as cold in Chicago/Detroit/Boston and most of Canada. Anyway I don’t think the expansion and contraction have had time to create leaks in a roof that is mere months old.