An agreement has been reached on a previous $44.2 million loan from Nationwide for public ownership of Columbus’s Nationwide Arena, as the parties involved map out a plan to restructure the loan.
Home to the NHL’s Columbus Blue Jackets, Nationwide Arena was originally financed by Columbus-based Nationwide through an LLC. In 2012, Nationwide issued a $44.2 million loan to the Franklin County Convention Facilities Authority to facilitate public ownership of the venue, as that loan was to go toward the purchase of Nationwide Arena. The understanding was that the authority would pay this loan back over time, but it has failed to make payments because of shortfalls in casino-tax revenue earmarked toward the debt.
There has been an agreement to restructure the loan, however, with the authority signing a memorandum of understanding (MOU) in October that spells out terms for the restructuring the loan. Nationwide will now be owed nearly $17 million in accrued unpaid interest, on top of the initial $44.2 million loan, making for a total of over $61 million. The City of Columbus, meanwhile, will restructure tax increment financing (TIF) zones to effectively allow Nationwide to recover a portion of the loan balance. More from the Columbus Dispatch:
Brian Ellis, president and chief operating officer of Nationwide Realty Investors, said in a released statement to The Dispatch Monday night that the plan is a “win-win partnership” that “resolves the outstanding loan issue” by leveraging existing investments to assure future development of the Arena District.
The authority now owes Nationwide $16.94 million in accrued unpaid interest on the $44.2 million principal, for a total obligation of more than $61 million, said Don Brown, authority executive director.
If left unpaid, that would compound the debt owed Nationwide to more than $103 million by 2029.
Though Columbus officials had repeatedly stressed that the risk on the loan was solely Nationwide’s should casino-tax revenue come up short, the city has now also contributed to the deal, restructuring tax-increment-financing agreements on Nationwide properties to, in effect, let Nationwide repay itself from its future property taxes.
Up to $10.8 million in TIF funds would go toward the paying off the loan, with the authority to make a lump-sum payment of $51.5 million in December 2029. That payment would be made through the issuance of new bonds, backed by casino-tax funds and hotel revenue obtained through a lease with Hilton Columbus Downtown. Nationwide Arena has been home to the Blue Jackets since its opening in 2000.