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Report warns Blue Jackets need new tax revenue or other solution to stem losses

This photo from April 27, 2007, shows Columbus Blue Jackets president Mike Priest during an interview at Nationwide Arena in Columbus, Ohio. A new report released Thursday, Nov. 5, 2009, warns that Columbus may have trouble holding on to the NHL's Blue Jackets because the club has been losing $12 million per year in central Ohio. (THE ASSOCIATED PRESS/The Columbus Dispatch, Neal C. Lauron)

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This photo from April 27, 2007, shows Columbus Blue Jackets president Mike Priest during an interview at Nationwide Arena in Columbus, Ohio. A new report released Thursday, Nov. 5, 2009, warns that Columbus may have trouble holding on to the NHL's Blue Jackets because the club has been losing $12 million per year in central Ohio. (THE ASSOCIATED PRESS/The Columbus Dispatch, Neal C. Lauron)

COLUMBUS, Ohio - Columbus may have trouble holding on to the NHL's Blue Jackets because the club has been losing US$12 million a year in central Ohio, according to a report released Thursday by a business group.

The report commissioned by the Columbus Chamber offers a variety of options for strengthening the hockey team's financial position, such as new taxes or fees or selling shares to other investors or the general public.

Other suggestions include allowing the team to renegotiate its lease for Nationwide Arena or trying to attract a second major tenant, such as a basketball team.

"It is important that our community retain this team," said Dave Blom, chairman of the Columbus Chamber board. "The Columbus Blue Jackets impact our regional economy, support thousands of jobs and bring millions of dollars in tax revenue that contribute to our quality of life."

In the decade following 1998, the year after investors began the move to bring the team to Columbus, the city's downtown Arena District has attracted various retail, restaurants and other businesses, increasing property values by 267 per cent and employing thousands, the report says.

Blue Jackets president Mike Priest said that the team's current economic model has "significant disadvantages" and that it plans to work with public and private groups to find a solution.

Priest said the Blue Jackets, now in their ninth season, have built and maintained fan and corporate participation that has supported the team.

"Public partnership in arenas and stadiums has been a critical element to ensuring healthy, competitive sports franchises in markets across the country, including Cleveland and Cincinnati in Ohio, and our priority continues to be to secure long-term financial viability in this great city," he said.

Options in the report, produced by Stephen Buser, a finance professor from the business college at Ohio State University, include plans to continue the current private ownership, opt for alternate private ownership or public-private partnerships.

He says in the report the Blue Jackets are at a disadvantage to other NHL teams for reasons including that the team must pay $5 million a year to use the arena, incur costs of managing the arena year round and have no access to parking revenue or payments for arena naming rights.

The $150 million arena was financed by Nationwide Mutual Insurance Co. It is one of the few NHL facilities in the country that is privately owned - largely because county voters wanted it that way. They have rejected arena tax issues three times between 1986 and 1997.

The team's owners unsuccessfully asked that the current state budget include a tax increase on beer, wine, liquor and cigarettes in Franklin County to raise $65 million to underwrite a county takeover of the arena.

The state Department of Development has been involved in discussions with Nationwide, the Blue Jackets, and city and county officials, department spokesman Bob Grevey said Thursday. While nothing specific is on the table, the state recognizes the importance of keeping the team in Columbus, he said.

Local voters have repeatedly rejected public financing of the centre, and the tax increase was opposed by members of the beer and wine industry, including brewing giant Anheuser-Busch, which operates one of its 12 U.S. breweries in the city.

The Blue Jackets qualified for the first time last year for the NHL Western Conference playoffs, losing in the first round to the Detroit Red Wings.

The team came to town nine years ago through significant private funding - much of it from the late John H. McConnell of steel finishing company Worthington Industries. McConnell died last year, leaving his son John P. McConnell at the helm of the business.

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