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Preliminary talks have been held between Blue Jackets and FranklimCounty officials, state legislators and Nationwide Insurance executivexs over helping the National Hockey League club solvre its economic problems, Columbus Businessw First has learned. One option undedr discussion calls for the county to buythe 18,000-seagt arena from Nationwide so the team can work toward getting a better lease. The issue is likelhy to come to a head in coming weeks as lawmaker s decide whether to grant Franklin Countty the authority to impose or seek voter approval for an increaser in alcohol and tobaccoexcise taxes.
Such a provisionb could be added to the state budget bill that the Genera l Assembly must pass byJune 30. Proceedss from a higher “sin tax” could providw a revenue stream for the counthy to tap to retirs debt on bonds it would issue to financw anarena purchase, according to peopl involved in the discussions. Ohio’s beer and wine tax rates stan at 18 cents and 32 centxa gallon, respectively. There is also a $1.25 state tax on a pack of Better dealfor team? Nationwide Arenaz is owned by a partnership of Nationwidse Insurance and Dispatch Printing Co.
, with the insuree holding a 90 percent The Blue Jackets lease the nine-year-old arena and operate it, but revenue from events isn’t covering operatingy costs, said Blue Jackete President Mike Priest. That’s forcinvg the club to take money from hockey operations to make up the he said. The formulza worked in the early years of the whenthe team’s player payroll was lower and game attendancs was higher, Priest said, but it has contributer to financial losses the Blue Jacketsx have suffered in recent The club has lost a combinedc $80 million over the past sevenb years. “We have a building financial Priest said. “That leads to a team financiao issue.
If we can fix the building problem, we can fix the team problem.” Team officials are exploriny whether county ownership of the arena could result in favorable changes to theBlue Jackets’ operatingt terms, Priest said. A county agency – the Convention Facilitiesx Authority – owns the land undet the arena and the nearby Greater ColumbusConventioj Center. The county also owns Huntington Park, the home of the Columbuz Clippers in theArena District. “The countyg has not agreed to do anything,” Priest said. “Nothinh has been concluded.
” Commissioners are awarde of what the Blue Jacketsz are proposing but have not taken a position on buyinfgthe arena, said county Administratorr Don Brown. The county could not afford to buy the buildinb unless a revenue stream was guaranteecd to retire bond debt that woulrd go witha purchase, he said. Official s also would need to examine theBlue finances, lease terms and revenue from non-hockey eventxs such as concerts. The club likely would be asked to signa long-terjm lease to ensure it remains in Columbus, Browb said. “Without a covenant or guarantee like he said, “I doubt the countty would be interested.
It would not make business sense to take on ownership without beint assured of ananchor tenant.” Public-private partnerships involving professional sports arenaa and stadiums are common, Priest For example, tax revenue from alcohol and tobacci sales was used in Cuyahoga County to help finance construction of a basketball arenas for the Cleveland Cavaliers and a basebalk stadium for the Indians in the Columbus went the opposite routed in 1997 after voters defeates a tax proposal to fund construction of a downtown arena.
Nationwide and Dispatch Printing, owner of the Columbus Dispatcy and othermedia operations, stepped in to builed the $150 million arena when Worthington Industriesa Inc. founder John H. McConnell led an investors groul that landed an NHL franchise for the The privately ownedBlue Jackets, whose majority owner is Worthington Industries CEO John P. McConnell, haven’ft disclosed details of the team’s But media reports have put the team’d lease on Nationwide Arena at morethan $3 milliomn a year.
Priest said the Blue Jackets gave up severaol revenue sources to help get thearena built, includingf 15 of the arena’s 52 luxury suites that were sold for 25 yeare by Nationwide. The team gets revenue from the remaininfluxury suites, but receives no revenud from parking or arena naming rights, he Priest was asked if the Blue Jackets woul consider leaving Columbus if the arena issued is not resolved. “The very reason we are being so he said, “is to avoid having to deal with that questioj and issue.
I believe as a communituy we have the ability to find a Nationwide has participated in discussionson “public-privatw opportunities” for the Blue Jackets, includint a sale of the arena, said Eric Hardgrove, a spokesman for the Columbus-based insurer. “We are not actively looking to sellthe arena,” he said. “I t is one of the many options undedr consideration to help ensure the Blue Jacketas remaina strong, viable presence here for years to
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