Nationwide Arena could get a $400 million facelift if the Franklin County Convention Facilities Authority gets its way. The government agency owns Nationwide as well as the Greater Columbus Convention Center, the Hilton Columbus Downtown Hotel and several parking garages. Columbus City Council has yet to include the plan on its agenda. City funds would help pay for the upgrades.
WOSU’s Debbie Holmes spoke with Ken Paul, executive director of the Franklin County Convention Facilities Authority, about what could happen.
Debbie Holmes: Four hundred million dollars is a huge amount, more than double what it cost to build the original Nationwide Arena in 2000. Why so much money?
Ken Paul: Well, $400 million is a significant amount of money, but as compared to what it costs to build a new arena on par with the arena we will build out with these renovations, the cost today is about $1.2 to $1.4 billion.
Debbie Holmes: How would the new renovations then enhance the visitors’ experience?
Ken Paul: It focuses first on safety, and as you stated, the fan experience. You know, some of the most sweeping changes will be upon entry into the arena. We expand that entry to allow for easier access, getting out of the elements and in through security. There are improvements throughout the building to elevators, escalators, enhancing restrooms, food and concessions. We create new spaces for fans to gather and enjoy their company, new amenities for the upper concourse, improvements to technology throughout.
We're taking advantage of space that exists within the building, repurposing it to benefit those who are coming to the arena for various different events, wide-ranging improvements that ultimately focus on improving the experience, enhancing safety technology and improving and securing the future of the building for the next 30 years.
Debbie Holmes: Where would all that money come from? It's a combination I understand of city, state, Franklin County and private funds.
Ken Paul: That's absolutely correct. It's a public-private partnership. One that's been in place for many years. We're expanding on a model that's worked. The first and largest chunk of money we expect to draw down and we will be making application for is $100 million from the state of Ohio for sports facilities improvements. We're contemplating a $200 million bond issuance from the CFA supported with new revenue streams, and an additional $100 million to $150 million of private investment.
Debbie Holmes: And private investment means what?
Ken Paul: The ownership group and the team and all those who operate out of the building.
Debbie Holmes: Will higher fees be added to tickets to help pay for this?
Ken Paul: Yeah, right now the new revenue streams we're contemplating to support that new debt issuance, that $200 million that the CFA would contribute to the project will be backed by two new revenue streams. It would be an increased admissions fee at Nationwide Arena only, not any other venue, just Nationwide Arena, that would be invested back into improvements at the arena. And then additionally, the CFA currently benefits from a share of state casino taxes that are distributed from the city and the county. The percentage allocation of that would increase from where it is today at 32% to 50% over the next several years. Those two revenue streams would be able to pay the debt service on that $200 million worth of bonds that the CFA would issue.
Debbie Holmes: How much more in ticket prices would you see at Nationwide?
Ken Paul: It will be 2% more. A $100 ticket is $102 under that scenario, but we believe that those improvements will be evident, that additional investment. And an important point here is that for those who don't attend events at Nationwide Arena, they won't be contributing to this project.
Debbie Holmes: Your agency was not able to pay back the balance on the loan for your purchase of Nationwide Arena in 2012. How will you be able to maintain enough funding for operations?
Ken Paul: Well, this is a finer point of the plan of finance, and I'm glad you asked the question. I mentioned that we would be issuing up to $200 million worth of bonds towards this project. A portion of those bonds are anticipated to pay off the original Nationwide Arena loan and settle that outstanding balance. And in doing so, we could settle that balance early and save the CFA and the public significant dollars in interest, which would be reinvested into the project. We would own the building outright.
Debbie Holmes: With other priorities in the city like affordable housing, why is it important to spend so much money on these renovations?
Ken Paul: Well, it's important to understand that the arena is at the heart of the Arena District. The arena is expected to generate $1.5 billion in economic impact over the next 30 years. That's the arena itself. The surrounding district, that number is $10 billion. And that's with a "B." And that supports an incredible amount of state and local taxes that fund the critical services that we all rely on. Our attempt here is to create a financing plan that doesn't force policymakers, elected officials to make choices between affordable housing or an arena, but frankly, be able to invest in all of these priorities and invest in the arena, something that actually generates revenue to support those critical city services.
Debbie Holmes: Are acts bypassing the arena because of a need for updates?
Ken Paul: Not yet, but we have seen indications that if we fail to invest, that we do stand to lose future events and lose competitiveness in the marketplace.
