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Columbus officials release arena lease proposal to help keep Blue Jackets in town

Sep 14, 2011, 4:19 PM EDT

Nationwide Arena Getty Images

With the Columbus Blue Jackets reporting record financial losses over the past few seasons, totaling over $80 million in the last six years and $25 million last year, they’re an organization that’s in desperate need of help to get out of their money woes. With so much money bleeding from the Blue Jackets, owner John P. McConnell has said that if things aren’t turned around that he’ll have to move the team.

While wins haven’t been easy to come by and they’ve made the playoffs just once in franchise history, there’s a plan on the table to try and ensure that the Blue Jackets can stay in Columbus.

This afternoon, a proposal was announced that would see Nationwide, the insurance company that owns the naming rights to the Blue Jackets arena, as well as Franklin County, Ohio and the City of Columbus would team up together along with revenues from a proposed casino to buy the arena.

Doug Caruso of The Columbus Dispatch outlines the plans to help keep the team in Columbus.

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 have naming rights to the arena for 10 years.

It’s no secret that money is tight in America and using public money to finance the purchase of an arena, even split up over many groups, raises a giant red flag. While the arena would then belong to the county, the fact that it’s money from the people and not a private firm or even the Blue Jackets owners, is the part that makes this deal seem very curious.

We’ve seen proposals using public money land with a thud in Glendale and on Long Island and those were deals that would’ve secured the location of the Coyotes in Arizona and the Islanders on Long Island for years to come. Those matters were shot down either by government watchdogs or via public vote.

In Columbus, this deal would need to be approved by a vote of the Columbus City Council and Franklin County commissioners to make it work. As for what the deal will do to slow down the losses, Caruso breaks down the numbers.

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 part that makes the use of public money more irksome is the fact that people in the area voted against using public money to build the arena in the first place. Using it now to make sure the lead tenant can stick around seems like an end-around way of getting what they wanted in the first place.

We’re all for doing the right thing to keep a team in place, but the use of taxpayer money is what will always make us feel awkward. If it’s money that had no other destination for usage that’s fine, but burning public bucks during tough financial times makes the situation feel nervous. The Blue Jackets are the only major professional team in Columbus and letting the arena go vacant would be a tough blow to the city and the community so this move could be viewed as one meant to keep the economy rolling until 2039, it just feels a little bit uncomfortable going all in on supporting it.

Update (5:37 p.m.): Blue Jackets team president Mike Priest issued a statement about the deal on the team’s website.

“We are appreciative of the comprehensive work and due diligence delivered in this report. Mr. Dorrian, Bill Jennison and John Rosenberger each understand the issues and this report offers a solution that will provide a long term sustainable business model for the organization. We are encouraged by the report’s findings.”

  1. hailskins75 - Sep 14, 2011 at 5:00 PM

    The NHL needs to be reduced to 24 teams, (two twelve team conferences), and a total of 8 teams make the playoffs(4 from each conference)

    • trbowman - Sep 15, 2011 at 1:53 AM

      Facepalm

    • ThatGuy - Sep 15, 2011 at 9:23 AM

      You don’t grow the league by taking away 6 fan bases.

  2. hailskins75 - Sep 14, 2011 at 5:00 PM

    The NHL needs to be reduced to 24 teams, (two twelve team conferences), and a total of 8 teams make the playoffs(4 from each conference)

    • cannonblast14 - Sep 14, 2011 at 7:33 PM

      should we pick these teams out of a hat as well?

    • trbowman - Sep 15, 2011 at 1:53 AM

      So I had to read it twice. Double facepalm

  3. emperor83 - Sep 14, 2011 at 5:30 PM

    That’s the dumbest idea I’ve ever read. What’s your team? We’ll start with them.

  4. cannonblast14 - Sep 14, 2011 at 7:34 PM

    Seems like a reasonable deal to me. Columbus would be screwed if the Jackets left. Something has got to get done.

  5. mmmpierogi - Sep 14, 2011 at 11:21 PM

    …there’s a hockey team in Columbus?

  6. bigz8042 - Sep 14, 2011 at 11:22 PM

    If the team isn’t supported by the fan base then get them out of there. They shouldn’t be bleeding in the RED for this long. It’s not good for the team or the league. This team has lost $80 mil over the last six years? You know Bettman is getting the more succesful teams to pay for this. Which drives the cost off tix up in every other market.

  7. trbowman - Sep 15, 2011 at 1:54 AM

    Move them to Cincy, US Bank Arena. I would actually go to their games.

    • cincycbjfan - Sep 15, 2011 at 8:07 AM

      So they can tie the Islanders for the Worst Arena in the NHL??? And, I’m not really interested in being accosted by homeless people on the way to the arena.
      I’m from Cincy… I’m a huge CBJ fan… and would much rather drive to Columbus than risk my life in downtown Cincy!

      • brucewaynewins - Sep 15, 2011 at 9:06 AM

        That’s seriously an ignorant statement. You fear for your life downtown by the arena? Check the number of violent crimes down by US Bank Arena in the last 20 years. Just drug dealers kill drug buyers in drug deals gone bad in OTR does not mean the entire city is dangerous.

        If your toilet is broke does that mean you can’t shower in that same bathroom? If your bananas are moldy does that mean you must throw out all the food in the kitchen?

        Logic Fail.

        Now onto the article. Not sure if this is directed to the author or someone who was quoted but The Blue Jackets are not the first or only pro team in Columbus. The distinction belongs to the Columbus Crew. If you’re not a soccer fan that does not mean its not a professional sport. MLS is the Tier 1 league and those players are paid cash to play. I don’t like Golf but I recognize Tiger Woods as a professional golfer.

      • cincycbjfan - Sep 15, 2011 at 11:42 AM

        brucewaynewins: Where did I state that I think the entire city is dangerous? And, I never said I “fear” for my life… I know how to defend myself.
        Now… go to Nationwide Arena sometime… a vibrant entertainment district, full of reasons to go early and enjoy the atmosphere, plentiful SAFE parking all around, a police force that “manages” traffic rather than react…
        Go to US Bank Arena… cut-off from the rest of downtown, panhandlers on EVERY corner, parking sucks, no traffic control after events… not exactly a pretty picture…

  8. hailskins75 - Sep 15, 2011 at 11:34 AM

    The league would be stronger with less teams. If the Panthers, Isles, Jackets, Coyotes, Hurricanes, and Oilers were removed from the league the NHL would be stronger.
    Nobody goes to Panthers games because they stink and Miami is not a pro sports town. They have trouble selling out NFL, and NBA games. Only about 2500 households tune in on tv to watch the panthers, and literally 349 people showed up to a Marlins game not to long ago. Columbus, and Raleigh are college sports towns; I’m not saying they are minor league but the Buckeyes, Wolfpack, and Tarheels will always rule those towns.
    Glendale is a fake city that has a native population of zero and a personality to match. A lot of people might live there, but there is no civic pride and most people root for teams where they are from originally as opposed to their “home team”.
    The Oilers, and Islanders play in crappy arenas that nobody wants to go to and there is zero public support to get new arenas.

  9. capsrockva - Sep 15, 2011 at 12:52 PM

    The Canes have a rabid fan base, so I don’t see that happening. As for the Yotes, the league is sustaining them for at least 1 more season. I personally would love to see a regional rivalry with the Caps in either Baltimore or the Hampton Roads area. The problem with Baltimore is that they’ve already lost 3 AHL teams and there are a lot of Cap fans in Baltinore and the problem with Hampton is that the Coliseum is to small, and not sure if that area could support an AHL team, ( the Admirals) and the NHL and I not sure if the league would permit a NHL & AHL team in the same market

    • icelovinbrotha215 - Sep 21, 2011 at 1:32 PM

      That would be dumb to put a team in the B-More area. There are already enough teams in the Mid – Atlantic area. Part of the reason why NJD has been struggling financially.

  10. cannonblast14 - Sep 15, 2011 at 7:50 PM

    Just to set the record straight, Columbus DOES have the fan base. Any team other than a handful of them would have the attendence problems probably worse than what the Jackets have after making the playoffs only once in 10 years and getting swept. Every other year, not even in the running. Pittsburgh had the same problems. If you dont win, why would a fan base stay loyal? Columbus has had a strong fan base for the amount of season they have failed at.
    All they need to do is win, and they will be fine. Trust me.
    As for the CBJ need to stay or Columbus is screwed comment i made above, obviously people dont know what the hell they are talking about. The arena district brings in millions every year and is a crucial part of the economy in Columbus. The city of Columbus would not be happy if the Jackets left town.
    As for everyone else, go fu$# yourself. THE JACKETS ARE HERE TIL 2039 baby!! Get used to it. Not a chance this doesnt pass and if it doesnt, something will eventually.
    See ya in the playoffs

    • icelovinbrotha215 - Sep 21, 2011 at 1:33 PM

      Every team has a fan base. The question is how big is the fan base? Everyone knows Columbus is Buckeye country. If the Jackets left, there won’t be as huge as a outcry as you would like to think.

      • cannonblast14 - Nov 6, 2011 at 9:25 AM

        I guarantee there would be. The Jackets are too big for the city. Not just Jackets fans would be complaining.

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