Post by NHLWinnipeg on Sept 14, 2011 15:35:59 GMT -6
Deal Would Keep CBJ In Town Through 2039
Posted Sep 14, 2011 by Aaron Portzline | 0 comments
Casino tax revenues would finance the public purchase of Nationwide Arena, under a proposed deal announced this afternoon.
Franklin County and Columbus would pledge up to a third of the tax revenue they collect from the Hollywood Casino on the West Side through 2039 to finance the $42.5 million purchase of the arena from Nationwide Realty Investors and pay to operate it, said John Rosenberger, a lawyer hired by Columbus and the county in 2009 to negotiate an arena deal. The Franklin County Convention Facilities Authority would own the arena.
Under the agreement, Nationwide would invest $52 million in the Blue Jackets and would take a 30 percent ownership interest in the team. It would also pay an additional $28.5 million to the Blue Jackets to purchase naming rights to the arena for 10 years.
The Blue Jackets have said they are losing $10 million to $12 million per year on their lease deal with Nationwide. Rosenberger and others have been pursuing a public purchase of the arena so the lease can be changed. Blue Jackets majority owner John P. McConnell has said he will consider moving the team if the lease deal is not reworked. The Dispatch Printing Co., which publishes The Dispatch, is a minority investor in the arena and team.
The deal is expected to save the team $9.5 million a year. The team would agree to remain in Columbus through at least 2039.
The $42 million purchase price for the arena is slightly lower than the $44 million value Nationwide placed on it during court proceedings to set the taxable value of the building in 2006, a case in which it was in the company’s interest to set the price as low as possible. The county auditor had valued the arena at $129.7 million. It cost $147.1 million to build in 1999, Nationwide said at the time.
The state of Ohio would help out with the purchase through a $10 million loan, half of which can be forgiven by the state.
The deal would place in public hands an arena that voters declined to fund through taxes in 1999. Instead, the arena was built by Nationwide. Using the casino tax money to purchase the arena will require a vote of approval by the Columbus City Council and Franklin County commissioners, but no other public vote is required.
Rosenberger and others estimated that Franklin County will take in about $12 million per year in casino tax revenue; and Columbus, $18 million. That’s less than earlier estimates. Under the deal, each would pledge a quarter of its casino revenue for three years to retire the debt and operate the arena starting in 2013, with the percentage rising by 1 percent each year for seven years and topping out at 32 percent in 2022.
Payments would continue through 2039 unless the arena’s 27-year mortgage is paid off early through higher-than-expected casino revenue.
The casino is under construction near I-270 and W. Broad Street, and developer Penn National Gaming has said it will open in late 2012. Penn National had originally planned to build the casino in the Arena District, but business and government leaders, including Nationwide, Dispatch Printing and Mayor Michael B. Coleman pursued a successful ballot issue last year to move the casino to the West Side.
www.bluejacketsxtra.com/content/blogs/puck-rakers/2011/09/full-proposal.html
Posted Sep 14, 2011 by Aaron Portzline | 0 comments
Casino tax revenues would finance the public purchase of Nationwide Arena, under a proposed deal announced this afternoon.
Franklin County and Columbus would pledge up to a third of the tax revenue they collect from the Hollywood Casino on the West Side through 2039 to finance the $42.5 million purchase of the arena from Nationwide Realty Investors and pay to operate it, said John Rosenberger, a lawyer hired by Columbus and the county in 2009 to negotiate an arena deal. The Franklin County Convention Facilities Authority would own the arena.
Under the agreement, Nationwide would invest $52 million in the Blue Jackets and would take a 30 percent ownership interest in the team. It would also pay an additional $28.5 million to the Blue Jackets to purchase naming rights to the arena for 10 years.
The Blue Jackets have said they are losing $10 million to $12 million per year on their lease deal with Nationwide. Rosenberger and others have been pursuing a public purchase of the arena so the lease can be changed. Blue Jackets majority owner John P. McConnell has said he will consider moving the team if the lease deal is not reworked. The Dispatch Printing Co., which publishes The Dispatch, is a minority investor in the arena and team.
The deal is expected to save the team $9.5 million a year. The team would agree to remain in Columbus through at least 2039.
The $42 million purchase price for the arena is slightly lower than the $44 million value Nationwide placed on it during court proceedings to set the taxable value of the building in 2006, a case in which it was in the company’s interest to set the price as low as possible. The county auditor had valued the arena at $129.7 million. It cost $147.1 million to build in 1999, Nationwide said at the time.
The state of Ohio would help out with the purchase through a $10 million loan, half of which can be forgiven by the state.
The deal would place in public hands an arena that voters declined to fund through taxes in 1999. Instead, the arena was built by Nationwide. Using the casino tax money to purchase the arena will require a vote of approval by the Columbus City Council and Franklin County commissioners, but no other public vote is required.
Rosenberger and others estimated that Franklin County will take in about $12 million per year in casino tax revenue; and Columbus, $18 million. That’s less than earlier estimates. Under the deal, each would pledge a quarter of its casino revenue for three years to retire the debt and operate the arena starting in 2013, with the percentage rising by 1 percent each year for seven years and topping out at 32 percent in 2022.
Payments would continue through 2039 unless the arena’s 27-year mortgage is paid off early through higher-than-expected casino revenue.
The casino is under construction near I-270 and W. Broad Street, and developer Penn National Gaming has said it will open in late 2012. Penn National had originally planned to build the casino in the Arena District, but business and government leaders, including Nationwide, Dispatch Printing and Mayor Michael B. Coleman pursued a successful ballot issue last year to move the casino to the West Side.
www.bluejacketsxtra.com/content/blogs/puck-rakers/2011/09/full-proposal.html
