The Columbus Free Press welcomes hockey fans to the 2015 NHL All Star game at Nationwide Arena, here in Columbus. Now that you are in town, we need you to put down your bags, head to our local casino and start gambling. Oh – and we need you to lose … and lose big.

Our Beautiful (Now) Taxpayer Funded Arena

You will soon see Nationwide Arena in the newly-developed Arena District, which fifteen years ago was the blighted and deteriorating site of the former Ohio State Penitentiary. The state of Ohio sold the site to the City of Columbus in 1995, and the City of Columbus remediated environmental issues and added infrastructure before leasing the 22 acres to Nationwide Insurance to redevelop.

After a series of battles and a lawsuit with historic preservationists who sought to retain a portion of the historic façade of the pennitentiary, Nationwide did a fantastic job of redeveloping this formerly vacant site, creating a vibrant mixed use district with bars, restaurants, apartments, condominiums and Class A office space, with Nationwide Arena at the middle of the redevelopment hosting the exciting hockey of the Columbus Blue Jackets – an NHL expansion franchise made possible by the private sector development of the arena.

Unfortunately, as the old folk say, “all that glitters ain’t gold,” and it is the gold has been lacking in the sports arena effort. While the remainder of the district (primarily offices and housing) have thrived, the arena itself has been unprofitable from day one and the initially unprofitable Blue Jackets never made a lease payment. Then as happens so often in professional sports, the Blue Jackets began making threats to leave the city unless their lease of the arena was restructured, and city officials reacted predictably by going against the five prior public votes that rejected public financing of sports complexes and making a deal behind closed doors with the owners that resulted in the public footing the arena’s hockey-related financial losses.

The Arena “Deal” Forced on the Public - Wealthfare

Like many recent stadium/arena deals across the country – this deal was done with smoke and mirrors. Without voter approval – indeed after failing at the polls with a 56 percent no vote in 1997, Columbus City Council and Franklin County Commissioners negotiated a public purchase through the Franklin County Convention Facilities Authority, by borrowing money from Nationwide to be repaid over 27.5 years using specified percentages of the annual proceeds of the new casino tax receipts that came about with the 2009 voter approval of a constitutional amendment authorizing four Ohio casinos (one of which is in Columbus).

Unfortunately, Ohio casino gambling is way below initial projections, and not enough money is being generated by losing gamblers to pay down the purchase debt. The 2013 Auditor of State report on the Franklin County Convention Facilities Authority says, “The Authority’s obligation to provide these annual funding amounts are [sic] contingent upon receiving sufficient proceeds from the city of Columbus and Franklin County based [on] a percentage of casino receipts. Such amounts are currently and projected to continue to be insufficient to provide the necessary funding to the Authority and thus resulting in the Authority’s inability to adequately fund capital improvements and debt service” (Note 13. – Joint Venture, page 41).

Last year, The Free Press urged Columbus grandmothers to gather up their girlfriends and their quarters and head to Hollywood (Casino, that is. http://columbusfreepress.com/article/granny-gather-your-girlfriends-and-head-hollywood-casino-ohio-needs-more-gamblers ), but too few of the Greatest Generation took us up on it. So now we’re trying to woo the tourists and convention goers to help us out a little bit. (Actually, you won’t be helping us out – we’ll all be retired by the time this thing even starts to gets paid off -- you will be helping our kids and their children who will otherwise be paying for this arena boondoggle.

What is astonishing is how easily some of our richest corporations bilked the public out of $250 million to pay for a sports arena the public said it didn’t’ want..

How Bad Is It?

According to the State Audit report, the arena purchase principle and interest due in 2014 totaled $5,301,504. Since there will not be enough money to pay any portion of that, the entire unpaid balance will accrue interest at 4.875 percent, and will be paid back at the end of the lease agreement (after 2039) -- if sufficient funds are available from casino tax receipts by that time. Through what retirement planners sometimes call “the magic of compound interest,” last year’s $5.3M unpaid note balloons to over $17M to be repaid by 2039.

Last year, we projected that the arena deal would cost an extra $97 million to Columbus taxpayers, and the term of repayment would extend from 2039 to 2046. Boy were we wrong. Updating our projections based on actual casino gambling numbers and arena operating numbers, under the various legally binding agreements, the public dollars pay (in the following order) annual land lease, arena operating expenses and capital improvements funding before paying down any debt. Over the past two years there has not been any money left to fully fund capital improvements, which means that no portion of the arena debt has been paid. Using the public projections of 2 percent annual growth in casino tax revenues and the contractual obligations of 3.5 percent operating expense growth, and the bond payment rate of 4.875 percent, the current deficit just keeps getting bigger every year. We now project the bonds will never be repaid, and the cost will balloon to more than $2.8 Billion in 85 years (year 2100) – and will keep growing from there -- even though our public officials originally told us the bonds were going to be paid in full in 2039.

So long term, in order to keep from drowning our children in debt, we need you to gamble today to pay for our publicly-owned, spiff hockey arena.

We Need for You to Lose. Big.

And not only do we need for you to gamble, but we need for you to lose -- big-time. Since the casino tax is, by state constitution, calculated as the casino income after paying out prizes but before paying expenses, we need for the gambled dollars to be high and the payout to be low, in order to maximize the amount of casino tax money that pays for our new publicly-owned hockey arena. According to our calculations, to cover just 2015’s $9 million public arena funding requirement, over $14 million in additional gross casino tax revenue must be collected by the state and distributed to Columbus and Franklin County. How do we make that number? At the end of the day, if each of the 16,500 ticket holders to the All Star game loses approximately $338,647.27 at the casino this All Star weekend, we will be able to pay our 2015 debt. But don’t worry, we are happy to help you lose – according to some reviewers, our slots are among the tightest in the country:

On May 20, 2013, one commentator to www.americancasinoguide.com said: “I was there a little over a week ago. I made two trips to the casino while staying in Columbus for business. I live in California and I visit Vegas three to four times per year, so I know casinos. This casino had their slots wound so tight no one could ever possibly win, not even a small amount! I have never seen anything like this...”
And nothing seems to have changed since 2013, according to one www.TripAdvisor.com review posted November 14th last year: “The casino is clean and open, which is nice. But I wouldn't be able to spend much time in there. The main issue is the slot odds. I read a number of reviews talking about how much worse they were than Vegas, and it's obvious. I guess when there is no competition you can do whatever you want. I played the same games I did in Vegas and it was amazing how few times anything hit. Walking around I noticed it wasn't just me...”

Please know that Columbus and Franklin County residents ordinarily wouldn’t want you to lose money in our casino, but in this case we have mixed motives: we need for you to lose or we won’t have any chance at all of paying off our nice, new arena that doesn’t involve putting our generation’s sports entertainment debt onto our children and their children.

The bright spot is, while you are in Ohio you have four casinos to gamble in, and we will accept our share of your losses at any or all of them. So visit the Hollywood Casino here in Columbus (you can even catch the #222 bus line from the Arena District) – it runs 9:00 PM to 2:00 AM on Friday and Saturday nights, for your gambling convenience.
So, All Star hockey fans: The Free Press urges you to gamble often and gamble poorly while you are in Ohio…our children are depending on you.