Our City Online

Messageboard - General Columbus Discussion

NOTE: You are viewing an archived version of the Columbus Underground forums/messageboard. As of 05/22/16 they have been closed to new comments and replies, but will remain accessible for archived searches and reference. For more information CLICK HERE

Dispatch -- Arena Deal No Windfall for Public

Home Forums General Columbus Discussion Dispatch — Arena Deal No Windfall for Public

Viewing 15 posts - 1 through 15 (of 67 total)
  • Author
    Posts
  • #97365

    NDaEast
    Participant

    Dispatch: Arena Deal No Windfall for Public

    The Dispatch reporting on this (as a minority owner of the Blue Jackets) is admirable and raises the question of whether “not a windfall” could be an understatement.

    “The decision by the city, county and the state to purchase the arena was not so much about hockey as it was economic development, officials said. Mayor Michael B. Coleman and city Auditor Hugh J. Dorrian said surrounding businesses generated $30 million annually in state and local taxes and that future developments will outweigh the estimated $250 million in casino tax revenue that local officials have dedicated toward maintenance and purchase of the arena through 2039. The arena doesn’t make much money because elected officials did not lay claim to several revenue streams in the purchase contracts. The Blue Jackets get right of refusal on nearly every decision related to the arena’s use and reap almost all the profit from any advertising in and around the arena. The team gets to keep revenue from concessions, parking and ticket sales from the 45 home games to help pay players’ salaries.

    At the same time, the public pays for nearly everything in and around the arena, including more than $2,000 for the hockey goal nets and safety pads as well as for the ice, arena security, event staff and traffic control for the games.“

    Hmmmm … doesn’t sound like we struck the best deal possible — we take all the Blue Jackets arena expenses and don’t get any of the upside.

    As far as the economic development rationale, all the Arena District development used to justify the arena purchase predated the City/County decision to buy the arena from the private sector owner (Nationwide and partners). According to the 2008 Glenn School report on the “Gross Economic Impact of the Arena District,” over 1 million square feet (the primary use in the district at 80% of the Arena District’s development since 2001) was commercial office, the success of which is not tied to the presence of the Blue Jackets. The next largest segment was in residential development, which success is not tied to the presence of the Blue Jackets. Of the development a very small amount is restaurant/bars, which success is tied to the seasonal presence of Blue Jackets crowds. And this 2009 study cataloged over $1B in new development: $635M completed as of the report date, with another $400M pending (prior to the bailout). The Arena District was working well without public funding of the arena.

    Further, the 2009 Stephen Buser report commissioned by the Chamber of Commerce talked about the Arena District tax revenues and said “the estimates [of Arena District tax revenues] … do not identify or net out portions of Arena District tax revenues that are the result of existing businesses that relocated to the Arena District from other parts of the region, as distinct from new businesses that generate net new tax revenues.” And we know that many of the Arena District businesses relocated from other areas of downtown (i.e., Accenture, Business First, Casto, Jones Day, Lifestyles Communities, McGladry, Schooley Caldwell, and soon Columbia Gas).

    And although the Arena District has grown and is vibrant, the U.S. Census notes that employment and number of businesses in the 43215 zip code dropped 9% through 2009 — the period studied by those two reports in support of the arena bailout.

    Thus, while the spot development has been extraordinarily successful, the economic development rationale for the public investment is unproven. The City and County should provide a complete assessment of the net economic impact to justify the public investment in a project (sports/entertainment facility financing) that had been turned down at the polls on the five occasions prior.

    #543480

    pilsner
    Participant

    I think the Dispatch has an obligation to do some polling regarding the arena bailout.It does polling about Kasich and guns and gay marriage 3 or 4 times a year. Spending $239 million is a huge amount of money for Columbus and Franklin County. To provide context, the entire budget for the city of Columbus was $735 million for 2012.

    #543481

    bucki12
    Member

    pilsner said:
    To provide context, the entire budget for the city of Columbus was $735 million for 2012.

    Wow, that is eye opening. It is hard to put a gauge on these dollar amounts. That figure is pretty useful.

    #543482

    pilsner
    Participant

    Columbus Coalition for Responsive Government is circulating a petition to put the arena bailout on the ballot for voters to decide. The petition will be circulating at all the summer festivals, so look for it. There are also petition circulating to let voters decide on district representation on City Council and campaign-finance reform. More can be learned about governance and politics in Columbus by reading a recent CU thread than a lifetime of reading the Dispatch: https://www.columbusunderground.com/forums/topic/democracy-in-columbus

    #543483

    futureman
    Participant

    The $250m number is over 25 years, while $735m for the Columbus budget is a single year – for context.

    #543484

    leftovers
    Member

    I am not sure where I stand on the issue. Regardless, that seems like a lot of money not to have taken a public vote on. It would be like your spouse buying a house with a 25 year mortgage and not involving the other party.

    #543485

    RedStorm
    Participant

    The $9.5 million is just over 1% of that $735 million figure, for context.

    What’s the better (best?) solution? The casino-tax revenue is capped at a percentage – 32%. If the taxes aren’t enough, then the CBJ owners and Nationwide are on the hook for the remaining amount. There are taxes spent on plenty of things I don’t use, or I think should go elsewhere, but I don’t get to vote on where every single tax dollar goes.

    I’m not sure why the concert “walkout” numbers for the Arena are so low, as reported in the article. If it’s a big name artist, sure they take up to 80%. But what about the other 20%? Where does that go? I mean, some of these concerts can generate $1 million or more a night. So if the artist keeps $800K, where does the $200K go? Does it cost $200K to put on the show? I’m not familiar with this area, so if someone could enlighten me that would be great.

    #543487

    NDaEast
    Participant

    futureman said:
    The $250m number is over 25 years, while $735m for the Columbus budget is a single year – for context.

    To me the relevant context is that Nationwide Arena (the bail-out-ee?) has annual revenues of $20 Billion per year and net profits of $1 Billion a year. The City of Columbus (the bail-out-er?) has an annual (roughly balanced) budget of just $765M per year (2013 figure) which pays for police, fire, streets, etc. — which total revenue/expense is only 75% of the annual NET PROFITS of Nationwide.

    It just seems kind of backwards to me. Why are we bailing out an entity that could fund the entire city’s annual operations every year out of its profits and still have a quarter billion dollars left over to play with?

    Is being able to watch Justin Beiber from seats the public owns and maintains that important?

    And is the lifetime of an Arena really 39 years (11+ years of operation under Nationwide, plus the 27.5 year term of the city’s lease obligation/public ownership)? … or did we just put ourselves in the situation SWACO is still in — still paying for a cash-burning-power-plant that hasn’t been on-line for more than 20 years. Will we really be using the Arena in 26 years?

    #543488

    ddcarothers
    Participant

    First of all, Nationwide Arena has been one of the biggest catalysts of downtown Columbus. The whole area has been built as a direct result of the Blue Jackets and Nationwide Arena. Commercial office space has been built there because of the success the area which is based around the Arena holding a professional hockey team. Also, residential development is not dependent on the presence of the Blue Jackets? People move there because of the nightlife and vibrancy of that urban area (which, again, is because of Nationwide Arena and the Blue Jackets).

    Cities are not businesses, there is a lot more to be concerned with besides the bottom line.

    Oh yea, and zip code 43215 is all of downtown (so technically, less than 10% of that is the Arena District).

    #543489

    RedStorm
    Participant

    NDaEast said:
    To me the relevant context is that Nationwide Arena (the bail-out-ee?) has annual revenues of $20 Billion per year and net profits of $1 Billion a year. The City of Columbus (the bail-out-er?) has an annual (roughly balanced) budget of just $765M per year (2013 figure) which pays for police, fire, streets, etc. — which total revenue/expense is only 75% of the annual NET PROFITS of Nationwide.

    It just seems kind of backwards to me. Why are we bailing out an entity that could fund the entire city’s annual operations every year out of its profits and still have a quarter billion dollars left over to play with?

    Is being able to watch Justin Beiber from seats the public owns and maintains that important?

    And is the lifetime of an Arena really 39 years (11+ years of operation under Nationwide, plus the 27.5 year term of the city’s lease obligation/public ownership)? … or did we just put ourselves in the situation SWACO is still in — still paying for a cash-burning-power-plant that hasn’t been on-line for more than 20 years. Will we really be using the Arena in 26 years?

    Ok, first of all, Nationwide INSURANCE and Nationwide ARENA are completely different. Nationwide the Insurance Company is now purely paying for the naming rights of Nationwide the Arena. Nationwide the Arena does not have $20 billion in annual revenues. That would be Nationwide the Insurance Company, which is a 30% owner of the team that plays in Nationwide the Arena.

    Yes, yes we will still use the Arena in 26 years. Despite being 13 years old, it is still widely considered one of the top 3 nicest arenas in the NHL. It is used for multiple concerts each year, political events/campaigns, and Ohio high school events (they have the hockey championships there I believe). WWE/WWF (??) is a frequent visitor. The NCAA have their tournament games there every four years, which is as often as the rotation allows. If you believe the hype coming from Mayor Coleman’s office, perhaps an NBA franchise may eventually utilize the arena as its home in the future.

    I think the District area may eventually lose its luster, sure. But I think it may be more sustainable than what happened in the Brewery District.

    #543490

    gramarye
    Participant

    And even if the Arena District “loses its luster,” it will still be infinitely better than what was there before, unless a meteor levels the entire neighborhood.

    #543491

    leftovers
    Member

    I don’t know the whole history, but I remember there was a boom going on in the late 90’s. Wouldn’t the Penitentiary area have developed regardless of having an Arena as an anchor? It seems like it had a pretty ideal location between downtown and VV.

    #543492

    buckeyecpa
    Participant

    I find it interesting that so many are against the county owning this. This wasn’t a bailout for the blue jackets. It was an investment for the city. Step away from the large number that was paid. Now look at revenue in the long term. Each and every NHL player that plays in that arena (this includes away teams) along with the staff pays local tax for that game. Every artist that performs pays out income tax. Every single person part of that tour pays.
    Now consider the employees (jobs and yes, more tax revenue), hotels (bed tax), and bars and restaurants that benefit from the events. I would say we’re doing well.
    Now look at nationwides new office. Those employees were mostly based in Dublin. Between taxes paid to Dublin and those that lived there because of work I’d say its a benefit to our city that the office was created. This may have been done no matter what but we really don’t know. What we do know is there is an arena that is an anchor and a lot has been developed around it after it was up.

    A study from 2008. Although dated it still gives a near accurate representation (same study as above but with more details and explanations)

    http://glennschool.osu.edu/faculty/greenbaum_pdf/Phase1_report.pdf

    #543493
    Coremodels
    Coremodels
    Participant

    Deciding to force the public to own an arena when they voted against it multiple times (and never for it) is shameful.

    Diverting the money from the casino to pay for it is shameful.

    #543494

    JeepGirl
    Participant

    buckeyecpa said:
    A study from 2008. Although dated it still gives a near accurate representation

    http://glennschool.osu.edu/faculty/greenbaum_pdf/Phase1_report.pdf

    The last foot note states:

    12
    Note that we are counting the spending for all of the patrons and fans who are from out of town, regardless of whether or not the event or game was the primary purpose for visiting Columbus.

    So this study credits Nationwide Arena with consumer spending that may have come from another source in town, such as a convention or trade show? I would think that they would easily be able to use actual attendance figures to create an accurate assessment of consumer spending resulting from Nationwide events.

    This “study” is nothing but fluff & crap.

Viewing 15 posts - 1 through 15 (of 67 total)

The forum ‘General Columbus Discussion’ is closed to new topics and replies.

Subscribe to the Columbus Underground YouTube channel for exclusive interviews and news updates!

CLICK HERE TO SUBSCRIBE