When we think of bad stadium deals, there are so many to bring up. But normally, the usually big examples include the Buffalo Bills being given $850 million for their new stadium, the city of Nashville handing the Titans $1.2 billion, or the city of Las Vegas handing over $750 million to the Raiders.
But I consider the situation involving the NHL’s Columbus Blue Jackets to be one of the most confusing, frustrating and downright unsavory stadium stories. Sadly, not much has changed. I read several articles recently that detail how the Blue Jackets are starting the process of upgrading their home venue, called Nationwide Arena. The current arena was opened in 2000 at a cost of $175 million (Some claim that this arena was “100% privately funded” but the public was on the hook for almost $50 million worth of improvements around the arena).
The PR team for the Blue Jackets has been making the rounds in the media with their own way of describing the current situation. They call the arena a “community asset” and only mention that the upgrades will “enhance the fan experience” thanks to “new sights and features”. The Blue Jackets Director of Communications mentioned to local media outlet NBC4i that what this arena needs in upgrades is comparable to a homeowner who “didn’t upgrade (their) house in 25 years”.
What will these upgrades cost? $400 million. But where that money will come from is nowhere to be found in this article. It simply says that the $400 million cost includes “both private and public funding”. To be accurate, the people asking for this money are called the Franklin County Convention Facilities Authority (FCCFA), a group tasked with overseeing the local convention center and the arena. Although the FCCFA is supposed to act independently, the reality is that they will adopt whatever the Blue Jackets tell them. When former FCCFA commissioners aren’t pleading guilty to bribery charges, they are likely continuing their long history of poor financial decisions that have cost the city millions.
So let’s talk about the history of Nationwide Arena and the Blue Jackets.
1) 2000-2011
From 2000 to 2011, the Blue Jackets leased and operated (essentially they owned it) Nationwide Arena from Nationwide Insurance. But around 2009-2010, the Blue Jackets began to complain that the costs of the arena was too much of a financial strain for them. The Blue Jackets needed a way to show that the team was losing money without opening their books for anyone, so they had the Columbus Chamber of Commerce (which they are a member of) issue a report stating how the team was suffering “record financial losses over the past few seasons, totaling over $80 million in the last six years and $25 million last year”. These losses have never been proven, nor has anyone ever verified the numbers because sports owners refuse to open their books…yet continue demanding taxpayer money. The Blue Jackets did their best to make sure the media discussed the report in a way that made it seem like the team had nothing to do with it. Such as: “A report commissioned by the Columbus business community adds the Blue Jackets to the list of N.H.L. teams on the financial brink”. During this time, the team consistently threw out the threat of moving unless taxpayers bailed them out.
In terms of the report, I have several issues with it:
First, the report starts off with the disclaimer that this study “does not attempt to conduct the type of economic impact analysis that addresses…economic issues as assessment of aggregate consumer demand, analysis of fractional regional income, diversion of jobs from other sectors, opportunity costs, and contingent valuation of public goods”.Second, the last section of the report, Table 6, discusses “Local Spending on other Nationwide Arena Events” and includes the following categories: “Taxed Paid”, “Job Creation” & “Draw of the Fanbase”. Yet, on the last page it says that this part of the report counted the spending not just for those attending Blue Jacket games, but for EVERYONE. How on earth can you factor in everyone who is spending when the title of the category is “Draw of the Fanbase”?Third, when the report tried to figure out how much visitors spend while in Columbus and where the visitors come from, the report created estimates based on the information in future years being the exact same as 2007.
2) 2012
In 2012, the city caved to the Blue Jackets and the arena became publicly owned after the FCCFA purchased the arena in a deal worth $42.5 million. You may be asking yourself how they came to that number. I did when I first read this story. In the late 1990s, Nationwide spent almost $175 million to build the arena. In 2012, a new arena would have cost between $225-$300 million. So, why is the purchase price just $42.5 million? Are we to believe that Nationwide is thrilled to sell it to the county for less than a third of that $42.5 million? Can we see any documentation on this deal? Of course not. Columbus residents voted down tax increases five separate times before 2012. So what? Multiple reports at this time indicated that taxpayers would shortly be responsible for arena costs nearing $300 million? Oh well.
The FCCFA plowed ahead and paid for the arena using future revenues from a casino tax. As one local writer noted at the time, these casino revenues were promised to help the west side of the city, and yet that was taken away with almost zero public input. The Columbus Dispatch noted how one person summarized the deal with an example of a local taxpayer telling the NFL that “I’ll take the expenses and you take the income”. With this new agreement, the Blue Jackets will not have to pay the city/county any money for rent. This saved the Blue Jackets $9.5 a year, and the team would also receive almost $30 million per year in naming rights income from Nationwide. The deal was financed with loans from Nationwide and the state of Ohio. To summarize, the Blue Jackets get to skip rent and keep 100% of the ticket, merchandise and related sales revenue from games? Can I get a deal that is set up like this?
The new agreement states that starting in 2013, the city and county would pay the FCCFA a percentage of casino tax collections as payments for the arena’s operating, capital and debt service expenses. Officials promised the public that this move would be great for taxpayers and that residents were now under “no obligation to ever provide any other sources of revenue in the event of any shortfalls”. They were inaccurate. Frankly, they were laughably not close to being in the ballpark. Remember when Mayor Michael Coleman and City Council President Andrew Ginther promised that the casino tax money “would cover all the costs of operating the Arena, plus pay off the debt”? Or when they claimed that the “back room deal…would be paid off in 27.5 years”? The casino revenue never came close to being enough for arena debt payments, much less any arena improvements or upgrades that the public was now required to pay out of their pockets.
Thankfully, Columbus leaders did their homework and made sure that the Blue Jackets were telling the truth about their finances. Oh wait, no they didn’t:
“Columbus Council President Andy Ginther admitted City Council never reviewed financial records or financial projections of the Blue Jackets and the Arena prior to committing nearly a quarter of a billion dollars of public funds… Instead, (the City) Council relied on a report by consultant Stephen A. Buser, paid for by the Columbus Chamber of Commerce” — Columbus Free Press, 10/3/2013
But included in this deal was this small part that called for the creation of a private nonprofit called CAM (Columbus Arena Management). This four-person group was being given the responsibility of managing the now publicly owned Nationwide Arena. Of the four people, just one had no clear conflict of interest. The other three worked at the FCCFA, the Blue Jackets management and Nationwide. Not to worry, though, as the mayor of Columbus and County Commissioners “insisted at the time that meetings and records of CAM be public, since public dollars were involved”. But when the first meeting was about to happen, CAM cancelled it “due to questions about whether it would operate in public, subject to open meetings act requirements that apply to public entities”. CAM would eventually have just one meeting a year and offer zero information to the public.
3) 2016
In 2016, the team continued to whine about their “bleak financial outlook” and demanded more taxpayer money. The FCCFA lobbied hard to have Nationwide Arena, valued at $143.4 million, exempt from future property taxes. This property tax exemption would save the team almost $4 million a year. Even though the city/county/state badly needed any tax revenue that it could get, and this tax had brought in almost $11 million since 2008, the Ohio legislature agreed to the exemption. To be fair, it isn’t as if this money had been already marked for anything important, so why not give it to the team? Did Columbus City Schools get 75% of that money in the past? Sure.
The FCCFA also explained that the tax exemption was needed because the $143.4 million value of the arena was incorrect and “way above” what it should be valued. Just ignore the fact that the cost of building a new arena continues to increase dramatically. Also forget that taxpayers have put in almost $250 million in support since Nationwide Arena began in 2000. Both Nationwide and the Blue Jackets have been crying about the arena value for years. Remember that the property taxes that Nationwide pays are based on the arena value. In 2001, the county auditor determined the valuation of Nationwide Arena property to be $129 million. When Nationwide got a second opinion, the Franklin County Board of Revisions, valued Nationwide Arena at $156 million. Nationwide appealed to the Franklin County Court of Common Pleas, who came back with a valuation of the arena property at $44 million. Instead of wasting more legal fees on this case, the county wanted to settle and come to an agreement with Nationwide. In the agreement, the district received $3.3 million immediately and a guarantee that public schools will receive “no less than $1 million a year”.
4) 2018
During 2018, the Blue Jackets demanded upgrades to the arena. According to the Blue Jackets, the arena was “in danger of falling into disrepair”. So the city was forced to propose a 7 percent tax on tickets that they estimated could bring in $12 million every year. The FCCFA claimed that this tax could pay for all or some of the yearly capital needs of the arena. It didn’t as the money received from the ticket tax “failed to meet revenue projections”. However, the following year saw the arena brought in record amounts of revenue thanks to new concerts and events. Instead of the public seeing a single dollar, CAM (Columbus Arena Management) “spent every penny of that and more”.
5) 2020
In early 2019, local officials were trying to meet an upcoming deadline that would see the area get an MLS team and a brand-new stadium. However, the land meant for the new stadium was owned by Nationwide. Nationwide submitted a deal that would see them receiving “tens of millions of dollars of the convention center’s revenue” as repayment on a non-performing arena purchase loan. But to accomplish this, the county would likely need to “divert tens of millions of dollars in property taxes” that were going to pay down the counties’ debt on the arena. Didn’t local leaders at this time promise that this type of scenario “could never happen”? Didn’t officials publicly promise that the “city carried no risk”? The only revenue that could be used to repay the loan was casino revenue. Yet in a document marked “Confidential — Not for Distribution”, the plan had property taxed being taken from meaningless places such as the maintenance of the local metro system, funding the local zoo and library and funding “agencies that serve the mentally ill, seniors, at-risk children and others”. You all get little to nothing. Think of the Blue Jackets?
What makes this unbelievable is that the local officials put language in this agreement that stated in bold letters that the loan “is not a debt of the city or the county, subject to payment from the general revenues or taxes”. All the while, this deal now shifts a county obligation onto the convention center and other local agencies with no connection to the arena. But wouldn’t you know that on the day in which the deed on the stadium land transferred (Oct. 31, 2019), the city and Nationwide also signed an agreement which allowed property taxes to be used for the arena loan. Must be just a wacky coincidence.
The FCCFA commissioned a study at this time to review the arena. According to the report, the arena must get almost $100 million in taxpayer money for improvements. Or else!
6) 2022
In 2022, the FCCFA claimed that the arena required “more work — and much more money to stay competitive” with other venues. The arena specifically required a “major facelift” that could only be done with “broader public…support”. This means more taxpayer money. The FCCFA cited the Cleveland Cavaliers arena collected $70 million from their taxpayers, while the Indiana Pacers obtained almost $300 million from their residents. After being promised $13.1 million from ticket tax proceeds, casino tax revenues and a federal grant, the FCCFA seemed very appreciative of the taxpayer money by claiming that the $13.1 million was a “start…but doesn’t give it the facelifts that Cleveland or Indianapolis have given their arenas”.
7) 2025
Just last year, the FCCFA spent $13.1 million in taxpayer money on arena projects such as a roof replacement, a cooling tower installation, a fire alarm system replacement and more. Yet if we come back to today, the FCCFA executive directory admits that recently released plans are “still being worked out” in negotiations that have involved the “team, its private partners and city, Franklin County and state officials”…just not the public. When asked by WOSU about the finances of these upgrades, the GM of the arena told them that the FCCFA was hopeful about the state of Ohio kicking in about $100 million for these upgrades.
It is interesting how the GM proceeds to then say that the rest of the money would be provided through “some private funding”, yet then puts forward several scenarios where taxpayers would, in fact, be paying for the upgrades. At least casino revenues have come roaring back and can finally support the arena’s operating expenses, right? Well, no…in fact, casino taxes “have slowed, showing very little growth over the past couple of years”.
/GENERAL%20CROP%20(61).webp?ssl=1 "Cadillac boss Graeme Lowdon on the team’s preparation ahead of 2026 debut and their ‘first target’")
