It looks like more restructuring of debt will be on the docket in Columbus, as Nationwide Arena financial issues still linger as expected revenues fall short.
Technically, Nationwide Arena operates in the black, with revenues covering operating expenditures (albeit on a very slim margin: $47,000). But arena management, Columbus Arena Management, has been dipping into the reserves to pay for capital expenditures, including the installation of new seating, and there’s been no debt service on two loans: $10 million from the state and $44 million from Nationwide Realty Investors.
The biggest reason for Nationwide Arena financial issues: the lack of expected revenues from a casino approved as part of the arena financing deal. From the Columbus Dispatch:
Since the casino opened in October 2012, however, its tax revenue has fallen well short of expectations. The subsidy has been enough to help the arena turn a profit that is deposited into a rainy-day fund, but the authority is deferring maintenance and has never made a loan payment….
Brown said the authority wants that fund to grow to $4 million. It started the year at about $2 million, but it will have been drawn down to about half that by the end of June.
“We are also talking to all of the stakeholders about how we can close the gap and make sure that we not only cover operating and maintenance expenses but how we address the capital-repair and -improvement needs going forward, and finally, how we address the loan obligations going forward,” Brown said.
Another issue looming: the end of a tax exemption for the arena. The exemption was granted by the state, but there’s no indication that an extension of that exemption is forthcoming, which means the arena authority could be on the hook for some $4 million annually in property taxes.
Image courtesy Nationwide Arena.