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Dispatch -- Arena Deal No Windfall for Public

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

Viewing 15 posts - 31 through 45 (of 67 total)
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  • #543510
    Coremodels
    Coremodels
    Participant

    buckeyecpa said:
    And again, it is a proven revenue stream.

    Really? So basically you didn’t read the article that started this thread…

    The taxpayers’ walkout for hockey and special events has been minimal in the year since elected officials from Columbus and Franklin County agreed to purchase the arena. In fact, the arena loses money on hockey because the team keeps all the revenue

    #543511

    buckeyecpa
    Participant

    I believe that article is lacking a few points. Yes, the return from hockey isn’t well. We knew this during the purchase. But jobs and income tax can’t be discounted. Also, the vendors that are subcontracted pay out a decent amount in taxes. That’s where the money will come into play. You can refer to the link I posted earlier. It was a roughly ten year study that broke those amounts down. The blue jackets aren’t keeping the taxable dollars. We’re getting it.

    #543512

    gramarye
    Participant

    buckeyecpa said:
    I understand what you’re saying. And I do agree with you on how I’d feel about the rail car. So I’m being a hypocrite which I acknowledge. But I truly believe the public is wrong on this project at this point. Voting it down initially was the right choice. But taking it over now was the right thing to do. The investment terms (expense:income for all) is a good thing. No one can really argue against that and support their statement.

    Heh. I would have rapidly gotten over my principled objections to getting a streetcar financed in this manner, even though I disapprove of the presence of the casinos at all. This is not to say that I disagree that the political reaction would have been toxic, and I’m sure the mayor and City Council are well aware of that fact.

    #543513
    Coremodels
    Coremodels
    Participant

    buckeyecpa said:
    I believe that article is lacking a few points. Yes, the return from hockey isn’t well. We knew this during the purchase. But jobs and income tax can’t be discounted. Also, the vendors that are subcontracted pay out a decent amount in taxes. That’s where the money will come into play. You can refer to the link I posted earlier. It was a roughly ten year study that broke those amounts down. The blue jackets aren’t keeping the taxable dollars. We’re getting it.

    So basically the exact same justification advocates of rail would use regarding its profitability.

    #543514

    NDaEast
    Participant

    pez said:
    I have a feeling that the deal was structured in a way that unwinding it will result in both significantly more expense and egg on the face of the city.

    Actually, it is a 27.5 year lease, in which the Auditor agrees to annually certify that money from the casino tax receipts is available, and then Council will pass legislation to make the lease payment.

    The lease specifies that if the money is not certified as available or appropriated, there is absolutely no penalty for the City or County except Nationwide (the mortgage holder) gets its arena back. The lease had to be written in this manner, because no city council can encumber funds for future years, so like all city leases it is essentially a one year lease.

    The Coalition’s proposal is simply for those annual lease payments to stop if the voters do not approve Arena funding prior to January 1, 2016.

    #543515

    RedStorm
    Participant

    By the way, most of the concession stand workers at the games and events are volunteers of 501(c)(3) non-profit orgs. That is a substantial way for them to make money for their organizations. This ensures them an opportunity to do that through 2039, barring another lockout on the hockey games. And if I read the agreement correctly, I guess a change in ownership would negate the “team won’t leave” clause.

    #543516
    Coremodels
    Coremodels
    Participant

    RedStorm said:
    And if I read the agreement correctly, I guess a change in ownership would negate the “team won’t leave” clause.

    Yep, that’s exactly right. The owners can’t move the team. They can sell the team, the league can contract the team, so there isn’t an iron clad guarantee that the BJs will be there through the end of this lease.

    #543517

    MRipley
    Participant

    RedStorm said:
    By the way, most of the concession stand workers at the games and events are volunteers of 501(c)(3) non-profit orgs. That is a substantial way for them to make money for their organizations. This ensures them an opportunity to do that through 2039, barring another lockout on the hockey games. And if I read the agreement correctly, I guess a change in ownership would negate the “team won’t leave” clause.

    Doesn’t that sort of negate the “But jobs and income tax can’t be discounted. Also, the vendors that are subcontracted pay out a decent amount in taxes.” argument?

    #543518

    buckeyecpa
    Participant

    MRipley said:
    Doesn’t that sort of negate the “But jobs and income tax can’t be discounted. Also, the vendors that are subcontracted pay out a decent amount in taxes.” argument?

    The subcontracted vending company doesn’t do this as a nonprofit or for free. They work with nonprofits and donate to the cause. But they still contribute a decent revenue.

    “The vendors injected into the local economy another $45 million of expenditures. The vendors have
    spent almost $13 million in utilities, and it is estimated that they have made over $27 million in local
    purchases. Further, the vendor sales have led to approximately $4.6 million earned by non-profit
    agencies due to a percentage of sales they received for their volunteer work for the vendors.” This is from the study over 2001-2008. Its doubtful that the numbers are much different if you were to look at it as of today.

    #543519

    NDaEast
    Participant

    Coremodels said:
    Yep, that’s exactly right. The owners can’t move the team. They can sell the team, the league can contract the team, so there isn’t an iron clad guarantee that the BJs will be there through the end of this lease.

    No, the contract allows a move, but there is a +/-$35M penalty as I remember (I may be wrong about the number — fact check?). However, since the Blue Jackets are the third least valuable team in the NHL at $145M (Forbes Magazine Article[/url]), the penalty plus the value ($35M + $145M = $180M) would put a sale price a full $102,000,000 below the $282M midrange value of an NHL franchise. The penalty certainly does not appear to be a deal breaker … again, this “deal” does not appear to be a wonderful deal for Columbus taxpayers — it looks like crony capitalism.

    #543520

    pilsner
    Participant

    NDaEast said:
    Actually, it is a 27.5 year lease, in which the Auditor agrees to annually certify that money from the casino tax receipts is available, and then Council will pass legislation to make the lease payment.

    The lease specifies that if the money is not certified as available or appropriated, there is absolutely no penalty for the City or County except Nationwide (the mortgage holder) gets its arena back. The lease had to be written in this manner, because no city council can encumber funds for future years, so like all city leases it is essentially a one year lease.

    The Coalition’s proposal is simply for those annual lease payments to stop if the voters do not approve Arena funding prior to January 1, 2016.

    Wierd how these details go largely unreported in the Dispatch. Guess some are busy laughing all the way to the bank.

    #543521

    gramarye
    Participant

    Is the actual contract documentation available online somewhere? I’m curious as to what the actual implications of default (or non-payment even if it isn’t styled as a “default”) would be.

    #543522

    RedStorm
    Participant

    I would also like to see the full documentation. Why is the Dispatch laughing all the way to the bank? They no longer own the arena, correct? They are minority owners of the hockey team, but the team hasn’t been making money recently. Maybe I’m missing something here.

    I believe the “penalty” was $36 million. I’m not sure how that makes it a bad deal for the city, if the point made prior to that was that the value of the CBJ is below the league average.

    If I read everything correctly, I don’t quite understand something – Nationwide Insurance sold its stake as part-Arena owners. Yet in the deal, they are paying the Blue Jackets (who don’t own the arena) $28 million in naming rights (good until 2022). Shouldn’t they be paying the city for the naming rights? Perhaps not, because they also loaned $43.3 million in the purchasing of the arena. I don’t really understand all of that. So Nationwide Insurance paid $58 million for a 30% stake in Blue Jackets ownership, loaned $43.3 million to finance the puchase of the arena, AND paid an additional $28 million for arena naming rights through 2022…to the Blue Jackets…who don’t own the arena anymore…?

    #543523

    NDaEast
    Participant

    buckeyecpa said:
    And somehow Columbus is still one of the most stable cities. I’d say everyone involved is doing something right. This arena benefits the city. I’m against public funding of NFL and NBA arenas.

    We are doing something right: we are the seat of state government, the home of the largest university in the country, had a more balanced economy (not heavily industrialized) when worldwide production shifted, and are a “new” city that isn’t landlocked by suburbs. Not to belittle stability and relative prosperity — those are wonderful things and far better than the alternatives — but those elements far outweigh the presence of the second arena to be built within 4 miles of the first (The Schott).

    Whether or not arenas benefit cities is an open question … there are many researchers who say they just are another use of the limited pool of the citizenry’s entertainment dollars, and may simply detract from arts, theme parks, movie theaters, and other such things.

    I grew up in Cleveland, watching the Browns and Indians lose in Cleveland Municipal Stadium. I voted for a publicly-funded arena in Columbus, and came out on the short end of that vote. I personally like public arenas and pro sports for the civic pride I believe they engender.

    But I respect the fact the majority of Columbus residents did not vote for publicly funded entertainment venues on 5 occasions. The arena bailout, for me, is the flagship example of what happens when a government becomes completely unaccountable to the citizenry. This is a project where the people voted “no”, but when the rich folk complained they were losing money on their private business venture the politicians met in private with them for two years, and sprung a bailout without a single public hearing in advance of the city council vote. To top it off, the legislation that approved the bailout then had language that said all the meetings that led up to the vote were public meetings. And nobody said anything. That is just bold — too bold for a democracy.

    #543524
    Snarf
    Snarf
    Participant

    Coremodels said:
    Personally, I’m just angry about it without any expectations of it changing. I can only imagine the backlash if this much money had been pulled from the casino in order to build a streetcar without a vote.

    ETA: and for the record, as big of an advocate as I am of rail…I wouldn’t be happy if it was done that way.

    Is there a point at which you will let this anger go or is it like an infinite and undying anger?

Viewing 15 posts - 31 through 45 (of 67 total)

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