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Officials: Help the Jackets? Sure, but...
Sales, income taxes ruled out, but other options still in play
Friday,  November 6, 2009 3:10 AM
THE COLUMBUS DISPATCH
 

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Columbus and Franklin County officials say they won't spend sales- or income-tax dollars to bail out the Blue Jackets or buy Nationwide Arena.

But they concurred yesterday with a report commissioned by the Columbus Chamber: Government must help keep the National Hockey League franchise in town and the Arena District thriving.

Franklin County commissioners called the district an engine of economic development, but pledged that "Franklin County tax dollars will not be used."

Mayor Michael B. Coleman and City Council members, who spent the summer persuading voters to approve higher income taxes, said they won't spend general-fund money to save professional hockey in Columbus.

That still leaves plenty of possibilities, outlined in the report that ties the Columbus Blue Jackets' financial troubles to having to lease and manage the arena.

Arena owner Nationwide Insurance said it already has allowed the team to defer rent payments for the past two seasons.

"Nationwide is willing to be part of the solution, but we cannot do it alone," said Brian Ellis, president of Nationwide Realty Investors, the insurance company's real-estate arm. "This is a complicated problem that will take time, and it will require some form of public-private partnership to solve."

The chamber study by Stephen A. Buser, a professor emeritus of finance at Ohio State University, pegged team losses at $12 million a year.

But, he said, the district supports about 5,500 jobs and generated $29.6 million in 2008 taxes.

Buser's suggestions included "sin taxes" on cigarettes and alcohol that were the center of a team proposal rebuffed this spring for the county to buy Nationwide Arena.

Other ideas in the report include a tax on rental cars, higher taxes on hotel rooms and taxes on tickets and parking inside the Arena District.

Coleman said the city wants to help the team, but "will not use city tax dollars from our general fund."

County commissioners, who opened a $55 million baseball stadium this spring across from the arena, weren't quick to open their wallets, either.

"These are tight economic times, and it will take the time and effort of the entire community to determine what's best for central Ohio," they said in a joint statement.

City Council President Michael C. Mentel said public involvement doesn't necessarily mean public money. The report also suggested issuing bonds, offering tax incentives or creating special taxing districts.

Councilman Andrew J. Ginther said a public-private partnership "is not just public: The private sector is going to have to sacrifice and make some choices. The public is going to have to get something out of this, either through the team or the arena."

Chamber President and CEO Ty Marsh said officials want a solution by year's end to relieve the Blue Jackets of significant costs, including $5 million a year in arena rent and $4 million in operational losses.

Blue Jackets President Mike Priest said the team has built a strong fan base but is hurt by its current economic model.

"Public partnership in arenas and stadiums has been a critical element to ensuring healthy, competitive sports franchises in markets across the country, including Cleveland and Cincinnati."

But Richard Sheir, who led a 1997 campaign to defeat public financing of the arena, said team and arena owners knew what they were getting into.

"The business model wasn't scratched on the back of an envelope," said Sheir, who now lives in Vermont. "They came in with their eyes wide open. This was vetted by some of the best business minds in the community. And the idea that a business, one so fully vetted, still fails ... that's how capitalism works."

He said it would be wrong to "push off an underperforming, money-losing investment onto taxpayers."

Nationwide owns 90 percent of the arena, and The Dispatch Printing Company, owner of The Dispatch, owns 10 percent.

JMAC/Worthington Industries owns about 80 percent of the team, with the remainder owned by a Dispatch Printing Company subsidiary, real-estate developer Ron Pizzuti, Crane Plastics and former Columbus Chill owner Horn Chen.

bcarmen@dispatch.com

rvitale@dispatch.com



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