Convention Facilities Authority Wants Arena Tax Exempt

Sep 29, 2015

As property tax abatements near expiration, the publicly-owned Nationwide Arena faces a big bill.  The arena’s owner, the Franklin County Convention Facilities Authority, worries the tax bill will have a huge affect on its operation. The arena wants a permanent property tax exemption.  

To hear Convention Facilities Authority director Don Brown tell it, Nationwide Arena faces a bleak financial future.  

While he describes a “break even” state for the authority’s finances, there’s no money to make payments on either of its loans for the publicly-owned arena, and it only has about a third of the funds it needs for renovations and repairs. Now the authority faces a hefty property tax increase on the arena when current abatements expire.

“So we would face the prospect of not being able to continue operation," Brown said.

The authority has enjoyed abatements which have reduced arena property taxes by 99 percent. Those soon go away, and the tax bill could increase to $4 million.  When the city and county took ownership of the arena, casino tax money was supposed to cover costs. 

But Brown said casino money, “Falls short of any additional taxes that might become the owner’s responsibility in future years.”

So the authority wants state lawmakers to exempt it from future property taxes, as it has for about a dozen other Ohio arenas.

Brown said the proposal is about parity, bringing it in line with the state’s other arenas. When asked, he did not directly say whether the exemption would be enough to meet all of the authority’s financial obligations.

“We’re mindful that we have the responsibility to make capital improvements over the next 25 to 30 years," he said. "And as the owner, we have the responsibility to find the money, find the dollars, to meet those improvements.”

For skeptics of the 2012 arena deal it’s, ‘We told you so.’

“The reason they can’t operate the arena is because they’ve got one tenant, their biggest tenant that rents for free," Jonathan Beard said. 

Beard is referring to the Columbus Blue Jackets.  The Jackets pay no rent and collect all the ticket and concession revenue on game nights. 

“That’s the only reason we’ve got this bad business decision being made," he said. 

The Columbus Compact Corporation president worries a property tax exemption will raise taxes for everyone else and leave public agencies with less money.

“That’s unfortunate. That’s a consequence of a bad decision where our elected officials overturned the will of the public," Beard said. "You know, instead of going deeper in debt, we’re going to cut other city services, or other county services.”

Columbus City Schools could be affected by the proposed exemption. A complex revenue-sharing arrangement, which has given the district nearly $11 million since 2008, ends this year.

A district spokeswoman said school officials are exploring the impact on the district going forward.

The facilities authority and schools are trying to hash out a new deal.

The Convention and Facilities authority’s Brown hopes the Legislature will take action before the end of the year.