CBJ lease proposal announced

By now several news outlets have put out the initial details of a proposal announced by the City, County, State, Nationwide and the Bluejackets today, but here are the highlights:

• Franklin County will own the arena, purchased from nationwide for $42 million
• The City of Columbus and Franklin County will kick in up to 1/3 of the tax revenue from the casino until 2039 or until the mortgage is paid off, whichever comes first. Roughly $4 million for the county and $6 million for the City
• The joint venture between OSU and the CBJ to manage the arena will continue for another 15 years
• Nationwide will invest another $52 million into the team and assume a 30% ownership stake
• Nationwide also will purchase the naming rights for 10 years for the Nat for an additional $28.5 million
• Penalties for the CBJ if they leave before 2039, and incentives to spend on payroll (not sure what these are yet).
• The State of Ohio is kicking in as well in the form of a $10 million loan, half of which could be forgiven.

Facts derived from the Dispatch article here.

To me this is a great deal for not only the team, but the entire area as well. Let look at some numbers. According to Forward Together, the Arena district generates $30 million annually in tax revenue, split between the State of Ohio, City of Columbus, Franklin County, and various local school districts. Columbus gets $7.5 million of that. The out of town spending was estimated at $160 million a year by the Glenn report as of 2006, money that doesn't come directly from Central Ohioans pockets. By my math, Columbus actually comes out ahead on this deal by at least $1.5 million, and definitely more when faced with loosing $7 million a year in tax revenue. Let's assume that if the team left and Nationwide Arena was shuttered, not all business would leave and head to the suburbs. So let's call this a break even for Columbus. I would say this is probably close to the same for Franklin County in terms of investment versus revenue, but to be conservative let's say they take a small loss (less than $1 million). For this year, Columbus will make $1.5 million from income tax just on the hockey players.

Now here is a wild card. With the new hotel the city is building right around the block, we suddenly have 2 major hotels within walking distance of our prime attraction to the city. Anybody care to guess what this means? More hotels, plus a large venue for big events, plus a thriving convention area equals more visitors and bigger events in Columbus. Conventions do huge business around the country, and Columbus has been outside looking in for years. Hotels have been the biggest deficit. This includes events like an NHL All Star game. Does anybody think for one second that without the Arena and surrounding district properties we would be getting this opportunity to bring in these larger (and more profitable) events? Hotel tax is huge, plus sales tax on spending, plus new business generation opportunities, it all equals up to a great opportunity for revenue for the area.

Last comment before a rant: the Arena District is a model for other cities in how to revitalize their downtown area. It is something for Columbus citizens to be very proud of, and we should not take for granted what we have here.

I have heard several comments from the local radio hacks about taking money away from schools. Several comments on the Dispatch's web site also mention this. Ohio has a gross gaming revenue tax of 33 percent, divided up as follows (per gamblingcompliance.com):

• 51 Percent, estimated at $306m per year, to the state's 88 counties.
• 34 Percent, estimated at $204m per year, to public school districts – funds would be distributed by county to all public school districts based on student population.
• 5 Percent, estimated at $30m per year, to the casino host cities.
• 3 Percent, estimated at $18m per year, to the Ohio State Racing Commission to revitalize the state's horse racing industry.
• 3 Percent, estimated at $18m per year, to fund the operations of the Ohio Casino Control Commission. 
• 2 Percent, estimated at $12m per year, to training opportunities for the Ohio law enforcement community.
• 2 Percent, estimated at $12m per year, toward treatment of problem gambling and substance abuse, as well as research related to problem gambling.

As you can see, school districts are still getting all of the money promised to them. The contributed amounts will come from the cuts the city and county are due, not money otherwise allocated. I cannot find anything on the net about any commitment from the City of Columbus or Franklin County to funnel more money to schools from their cut. I think these comments are a knee-jerk reaction from people that are dead set against public spending, not based on any fact I can find.

It should be pointed out that the arena is being sold to Franklin County at 28% of what it cost Nationwide to build. Yes, they have made their money off of other investments, but that is still a great deal for the county, no matter how you look at it. They will not even have to run it for the next 15 years. Compare that to $56 million spent on building Huntington Park, and it is an even bigger steal.

And the bottom line is, taxes are not being raised for this. Yes, the money could be spent on other things. Where would you like to spend it? Oh, by the way, before you allocate that money, make up the difference in losses that will occur when the team leaves. You might not be left with as much as you think.

Personal rant: I have lived in this city all my life and I cannot imagine living somewhere else. However, I get disgusted by the small town attitude of some, and the short-sighted outlook these people have. Let me type in all caps so maybe those people can understand: THIS IS NOT ABOUT HOCKEY OR THE BLUEJACKETS! THIS IS ABOUT COLUMBUS AND A THRIVING AREA IN THE MIDDLE OF TOWN THAT WAS AN ABANDONED LOT 15 YEARS AGO. People in this town are so afraid of growing past a college town that they take any stance to stop it. It can still be a great place to live and a big city. It already is a big city, whether anyone wants to admit it or not, 15th largest in the country. I can't understand people who won't admit that the Arena District and the CBJ have contributed to this town and our economy, it just doesn't make sense. They want to focus on the franchise and lack of winning, WTF does that have to do with anything?!? Take a lesson from Cleveland, they have lost for decades but the town supports them no matter what. With public money (direct tax increases I believe). I truly believe that if the Buckeyes had a difficult ten years some people would want them to move to Dayton because "they sux and we pay for them". You don't want public money going to the CBJ, fine. Come with a different solution, complain to your representative, but don't pretend that the franchise is worthless and should just leave. It would be a huge blow to this city and it's reputation if that happened, and the naysayers would be begging for them to come back within 10 years. /rant

I am extremely happy with the deal. Nationwide kicked in, the governments kicked in, and we have a team for the foreseeable future. What are your thoughts?