By Lucas Sullivan and Rick Rouan, The Columbus Dispatch
COLUMBUS – In the five years since Columbus and Franklin County officials approved the public purchase of Nationwide Arena, not one payment has been made on the loans used to buy it.
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The money needed to pay off the arena likely never will come from the casino tax receipts that were promised but so far have grossly underperformed expectations. And that means the public ownership of the arena likely will remain in question.
It appears more and more likely that, instead, the public will pay the upkeep of an arena it might never pay off.
Local officials are discussing how to deal with the underfunded arena, but a solution could be up to two years away.
Casino revenue projections were so far off when the deal was constructed that there is not enough money to cover the $42.5 million purchase price of the arena and the $250 million upkeep through 2039.
“The receipts would have to more than double to make up for the shortfall,” said Don Brown, executive director of the Franklin County Convention Facilities Authority, which was appointed by the city and county to oversee the arena.
When the authority purchased the arena, it used a $44 million loan from Nationwide Realty Investors and a $10 million loan from the state. The deal was structured so that casino tax revenue would be used to fund part of the arena management company operations, pay for capital expenses and repay the loans — in that order.
So far, casino taxes are generating only enough revenue to supplement management and operation costs at the arena.
The way the deal is constructed, Nationwide would assume the debt if there is not enough money to cover the arena purchase. The city and the county are not obligated to provide any other sources of revenue from their budgets to make up for the shortfall. That means their own budgets aren’t at risk, and without the prospect of an empty or dilapidated arena neither has an incentive now to reopen the deal.
“As far as I am concerned, Nationwide is carrying bad debt,” said City Auditor Hugh J. Dorrian. “The contract will not be rewritten.”