directory Light the Lamp - a Columbus Blue Jackets blog: Beer tax sought for Blue Jackets arena buyout

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Thursday, May 28, 2009

Beer tax sought for Blue Jackets arena buyout

I just saw this come across the wire:

COLUMBUS, Ohio (AP) - The owners of the money-losing Columbus Blue Jackets want a tax increase on beer, wine and cigarettes to underwrite a county takeover of Nationwide Arena, where the team plays.

Such a move would defy the will of local voters who repeatedly rejected public financing of the facility built by Nationwide Mutual Insurance Co.

The prospect of significant tax hikes also has touched off a battle between financial backers of the Blue Jackets and beer brewer Anheuser-Busch, which operates one of its 12 U.S. breweries in the city.

The company's president flew to Columbus on Thursday for meetings with Gov. Ted Strickland and leaders of the Ohio Legislature. The team wants the proposal inserted into the budget that starts July 1.

Link here.

Well this sure came out of left field. Its the first I've seen or heard regarding any of it. In fact I'm not quite sure what any of it means??

Is Nationwide Insurance trying to unload the arena to the county?

Are the owners wanting more tax to offset their losses?

Most importantly -- how much is a damn beer gonna cost next year?

Need. More. Info.!

UPDATE: More information here from Columbus.bizjournals.

The formula worked in the early years of the franchise, when the team’s player payroll was lower and game attendance was higher, Priest said, but it has contributed to financial losses the Blue Jackets have suffered in recent years.

“We have a building financial issue,” Priest said. “That leads to a team financial issue. If we can fix the building problem, we can fix the team problem.”

Team officials are exploring whether county ownership of the arena could result in favorable changes to the Blue Jackets’ operating terms, Priest said. A county agency – the Convention Facilities Authority – owns the land under the arena and the nearby Greater Columbus Convention Center. The county also owns Huntington Park, the home of the Columbus Clippers in the Arena District.

“The county has not agreed to do anything,” Priest said. “Nothing has been concluded.”

Commissioners are aware of what the Blue Jackets are proposing but have not taken a position on buying the arena, said county Administrator Don Brown. The county could not afford to buy the building unless a revenue stream was guaranteed to retire bond debt that would go with a purchase, he said. Officials also would need to examine the Blue Jackets’ finances, lease terms and revenue from non-hockey events such as concerts.

The club likely would be asked to sign a long-term lease to ensure it remains in Columbus, Brown said.

“Without a covenant or guarantee like that,” he said, “I doubt the county would be interested. It would not make business sense to take on ownership without being assured of an anchor tenant.”

UPDATE: Even more information from the Dispatch here.

Bottom line to me is that the team seems to be losing its ass and is looking for any way to make up for some of those losses.

Not a good situation although this quote from Priest makes sense:

Priest was asked if the Blue Jackets would consider leaving Columbus if the arena issue is not resolved.

“The very reason we are being so proactive,” he said, “is to avoid having to deal with that question and issue. I believe as a community we have the ability to find a solution.”



Rick said...

It just means we spend waaaaay more time in the RBar pre-game and boycott buying anything in the arena itself.

Loach said...

Sorry, Rick - it's not just beer inside Nationwide that would go up. It would be a tax increase on even the alcohol you would buy at the store (maybe just in Franklin county?). I'd hate paying more for beer, but I guess we need more details as I don't like to see the Jackets behind the 8-ball compared to the arena deals other teams have.

Michael said...

Rick, I respectfully disagree. We need to support the team and the identity they help bring to Columbus. We all know there have been years where they have been tough to watch, but they are OUR team. The lease they have makes them cover facility losses - does that make sense?

I grew up in Cleveland, and I am a Cleveland sports fan. The city and its fans have built 3 new stadiums in the past 15 years through tax increases. We can't do one? I am against many forms of taxes, but I do not have a problem paying a little more on my Buds to ensure the CBJ have a fair deal and can be competitive in the NHL.

The arena, whole arena district, and specifically the CBJ can make a much better case now compared to 12 years ago when it was first put on the ballot. Look at the figures below and there is no doubt there is a large economic impact in a very positive way for the city.

• More than $850 million in spending in Central Ohio has been directly attributable to the Blue Jackets, Nationwide Arena, and Columbus Destroyers, the city’s Arena Football League franchise.
• An estimated $160 million in indirect spending at hotels and restaurants can be attributed to out-of-town visitors attending Blue Jackets games and other events at the arena.
• Approximately $4 million in local income tax revenue has been generated by the Jackets and Destroyers since fiscal year 2002.
• More than $2.3 million in grants and donations have been made by the Blue Jackets Foundation to 80 nonprofit organizations since 2000.
• More than $1 billion in investments have been made or committed to the Arena District.
• Arena District businesses generated $6.13 billion in sales revenue and $1.46 billion in payroll from 2000 through 2006.
• More than 170 businesses and 7,000 jobs are located in the district.

It comes down to pride. The Indians throughout the 80s finished 2 seasons with above .500 records and the Cavs only had 3, but the people of Cleveland help their teams out by passing tax increases in 1990 and built them new facilities because the immense pride they have.

We can have that pride to. This is a team in which we can be proud, and I believe this year was just the beginning of what we are capable of doing. We finally have a capable GM and coach, and nobody can deny the progress that has been made.

So you pay a couple more pennies on your next beer run or on your pack of smokes, but the pride of putting on the CBJ jersey and going to a game is worth every one of those pennies.

JAL said...

Michael -- you hit it out of the park, or to keep the metaphor consistent, scored a hat trick, with that comment.

The good news is that we have a first class facility. Nationwide and McConnell stepped up and got the job done right. At that time, Nationwide had all the leverage. Not necessarily true now, as Michael pointed out.

We have an entire District that has emerged because of the Blue Jackets and Nationwide. The team has a solid front office now, and momentum is high. Not surprising that these conversations are starting now.

What we, as fans, need to do is take ownership of this issue and be out front supporting it, instead of letting the negative forces control the debate.

A Shot From The Point