Explanation
Background: In December 2018, Columbus City Council passed Ordinance No. 3378-2018, which enacted Chapter 375 of the Columbus City Codes in order to establish the Creation, Innovation, and Inclusion Fund and an admissions tax on entrance to ticketed events held at places other than Nationwide Arena. Chapter 375 was further amended to strengthen the regulatory tax framework in December 2019 with the passage of Ordinance No. 3100-2019. This third piece of legislation will amend Chapter 375 to increase the admissions tax for ticketed events held at the stadium on Franklin County Parcel No. 010-300553 (the “Stadium”), currently known as ScottsMiracle-Gro Field, in order to repay debt service associated with obligations issued for additional capital investment in modifications for that Stadium and a new training facility (the “Training Facility”) to support a National Women’s Soccer League (NWSL) team.
Fiscal Impact: No funding is required for this legislation. The admissions tax established under Chapter 375 of the Columbus City Codes is being increased by (i) two percent on all Major League Soccer and other ticketed events (non-NWSL ticketed events) at the Stadium and (ii) seven percent on all National Women’s Soccer League ticketed events at the Stadium, and one-hundred percent of such described additional two percent and seven percent increases collected at the Stadium will be allocated to repayment of debt service for obligations issued to make payment to the Confluence Community Authority to support the Stadium modifications and the new Training Facility.
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To amend and enact various provisions of Chapter 375 of the Columbus City Codes in order to strengthen the levying, collection, and allocation of admissions tax for facility stabilization receipts. ($0.00)
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WHEREAS, Haslam Sports Group, Drs. Pete and Chris Edwards, and NRI Holdings, LLC through Columbus Women’s Soccer Holding Company, LLC (together with one or more to be identified affiliates, “NEWCO”) secured a National Women’s Soccer League (the “NWSL”) franchise for Columbus (the “Team”) that would be operated by NEWCO and play its home matches at the stadium on Franklin County Parcel No. 010-300553 (the “Stadium”), currently known as ScottsMiracle-Gro Field; and
WHEREAS, pursuant to Ordinance No. 1112-2026, the City of Columbus, Ohio (the “City”), along with the County of Franklin, Ohio (the “County”), Confluence Community Authority (the “NCA”), and NEWCO, was authorized to enter into a Development Agreement regarding the proposed financing, development, construction, and operation of a new training facility for the Team (the “Training Facility”), and certain modifications to the Stadium (the “Stadium Enhancements” and together with the Training Facility, the “Facilities Projects”) to accommodate the Team and satisfy NWSL requirements; and
WHEREAS, the City, pursuant to Resolution Nos. 0230X-2019 and 0252X-2019, established the NCA to own the Stadium and the Columbus Crew’s OhioHealth Performance Training Center, and it’s intended that the NCA will sublease the Training Facility to NEWCO; and
WHEREAS, subject to budgeting and annual appropriations, as necessary, to be approved by the respective legislative authority, the City and County have agreed to make respective commitments of twenty-five million dollars ($25,000,000.00) each towards the costs of the Facilities Projects (the City’s $25 million being, the “City Contribution”), and NEWCO will be responsible for costs above such combined amount; and
WHEREAS, Chapter 375 of the Columbus City Codes pertains to the taxation of admissions to ticketed events held at places other than Nationwide Arena; and
WHEREAS, the City Contribution will be funded by obligations issued and repaid by an increase in the admissions tax of (i) two percent on all Major League Soccer and other ticketed events at the Stadium and (ii) seven percent on all National Women’s Soccer League ticketed events at the Stadium (collectively, the “Additional Admissions Fee Revenue”); and
WHEREAS, upon the completion of the 2032-2033 NWSL season, the City and NEWCO shall evaluate whether the cumulative Additional Admission Fee Revenue has met or exceeded the revenue projections for Additional Admission Fee Revenue as set forth in the aforesaid Development Agreement (the “Revenue Projections”); and
WHEREAS, if the cumulative Additional Admission Fee Revenue is less than the Revenue Projections, the City and NEWCO shall in good faith negotiate modifications to address such shortfall, which may include, but are not limited to, adjustments to admission fee structures, facility-related charges, lease payments, or other mutually agreed-upon revenue sources, provided that such modifications shall not include the imposition of additional City income or property taxes; and
WHEREAS, the above-mentioned modifications to address such shortfall shall be used to satisfy the debt obligations of the City Contribution for past or future debt service payments; and
WHEREAS, after the debt service of the obligation for the City Contribution is funded in full, the Additional Admissions Fee Revenue will be reallocated to the Greater Columbus Arts Council for the purpose of supporting arts institutions, artists, education, inclusion, and innovation in programming; and
WHEREAS, it has become necessary in the usual daily operation of the Department of Development to amend Chapter 375 which provides taxation regulations on admissions to ticketed events held at places other than Nationwide Arena including, but not limited to, the taxation of admissions at the Stadium in order to enact the Additional Admissions Fee Revenue to provide repayment of debt service on the obligations for the Facilities Projects; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That Sections 375.02, 375.03, 375.05, and 375.09 of the Columbus City Codes are hereby amended to read as follows:
375.02 - Establishment and Imposition of Tax.
(a) For the purpose of providing revenue for the advancement of cultural arts within the city, there is hereby levied, and shall be paid and collected, an admissions tax of five percent (5%) on the amounts received as admission to any place located within the city of Columbus, pursuant to Article XVIII, Section 3 of the Ohio Constitution and Ohio Revised Code Section 715.013(B)(1)(C)(1). The tax shall apply to every admission within the city for which a charge is made, excepting those performances, places, and events which are exempted as provided in this chapter, notwithstanding the sale of the ticket or other evidence of right of admission thereto is made outside of the city. Additionally, this tax under Section 375.02(a) shall not apply to the price paid to gain admission to any National Women’s Soccer League event occurring at the stadium on Franklin County Parcel No. 010-300553, currently known as ScottsMiracle-Gro Field, as such exemption is provided for in Section 375.09(c).
(b) For the purpose of providing revenue for the support and stabilization of cultural arts facilities, sports facilities, public art, and performance venues in the city, there is hereby levied, and shall be paid and collected, in addition to the tax described in division (a) of this Section, an admissions tax of two percent (2%) on the price paid to gain admission to any non-National Women’s Soccer League event occurring at the stadium on Franklin County Parcel No. 010-300553, currently known as ScottsMiracle-Gro Field, pursuant to Article XVIII, Section 3 of the Ohio Constitution and Ohio Revised Code Section 715.013(C)(1). The tax shall apply to every admission for which a charge is made, excepting those performances and events which are exempted as provided for in this chapter, notwithstanding the sale of the ticket or other evidence of right of admission thereto is made outside of the city.
(c) For the purpose of providing revenue for the support and stabilization of cultural arts facilities, sports facilities, public art, and performance venues in the city, there is hereby levied, and shall be paid and collected, an admissions tax of seven percent (7%) on the price paid to gain admission to any National Women’s Soccer League event occurring at the stadium on Franklin County Parcel No. 010-300553, currently known as ScottsMiracle-Gro Field, pursuant to Article XVIII, Section 3 of the Ohio Constitution and Ohio Revised Code Section 715.013(C)(1). The tax shall apply to every admission for which a charge is made, excepting those performances and events which are exempted as provided in this chapter, notwithstanding the sale of the ticket or other evidence of right of admission thereto is made outside of the city.
375.03 - Intended Use.
(a) All revenues received by the City from the admissions tax levied pursuant Section 375.02 shall be designated for the purpose of supporting sports facilities, arts institutions, artists, education, inclusion, and innovation in programming.
(b) The full amount of the revenue collected by the City from the admissions tax levied pursuant to Section 375.02(a), subject to Section 375.15, shall be allocated to the Greater Columbus Arts Council, subject to appropriation and approval of city council.
(c) No entity which is exempted from the admissions tax as defined in section 375.09 of this chapter shall be allocated any of the revenue collected by the tax, either directly by the city or indirectly by the Greater Columbus Arts Council, unless that entity voluntarily elects to charge the admissions tax in alignment with the provisions of this chapter.
(d) The payment schedule for the aforementioned allocation to the Greater Columbus Arts Council shall be determined by the Auditor.
(e) The Greater Columbus Arts Council shall within one hundred twenty (120) days after the end of its fiscal year provide to the Auditor financial statements of the organization for such fiscal year prepared in accordance with generally accepted accounting principles, with an opinion thereon by a firm of certified public accountants.
(f) The Greater Columbus Arts Council shall within one hundred twenty (120) days after the end of its fiscal year provide to Council a report of activities with regard to the utilization and distribution of funds associated with the admissions tax.
(g) The full amount of the revenue collected by the City from the admissions tax levied pursuant to Sections 375.02(b) and 375.02(c), subject to Section 375.15, shall be allocated as follows, subject to appropriation and approval of city council, and shall be utilized for the following purposes:
1. One-hundred percent (100%) of the admissions tax levied under Sections 375.02(b) and 375.02(c), subject to Section 375.15, shall be initially designated for debt service on obligations issued in a principal amount not to exceed twenty-five million dollars total for (a) capital improvements to the stadium on Franklin County Parcel No. 010-300553, currently known as ScottsMiracle-Gro Field, and (b) a new training facility for a National Women’s Soccer League team as described in Ordinance No. 1112-2026.
2. Following the repayment of the debt service described under Section 375.03(g)(1) as determined by the City Auditor, one-hundred percent (100%) of the admissions tax levied under Sections 375.02(b) and 375.02(c), subject to Section 375.15, shall be allocated to the Greater Columbus Arts Council for the purposes described under and pursuant to Section 375.03(b) to Section 375.03(f).
(h) During the applicable period of time, the payment schedule for the aforementioned debt service described under Section 375.03(g)(1) shall be determined by the City Auditor.
375.05 - Effective Date.
The tax levied and imposed pursuant to the provisions of this chapter Section 375.02(a) of this Chapter shall apply to any admissions charged and paid on and after July 1, 2019. The tax levied and imposed pursuant to the provisions of Sections 375.02(b) and 375.02(c) of this Chapter shall apply to any admissions charged and paid on and after January 1, 2027.
375.09 - Exemptions.
(a) No tax shall be levied with respect to any admissions at a place provided the proceeds exclusively inure to the benefit of the following:
(1) The United States government, the State of Ohio, its departments and institutions and the political subdivisions thereof including the City, when acting in their governmental capacities and performing governmental functions and activities;
(2) Any entity which has been certified as a tax-exempt organization under Section 501(c) of the Internal Revenue Code, excepting the National Collegiate Athletic Association. This exemption shall not apply to cultural and arts organizations that receive operating support from the Greater Columbus Arts Council, except as it applies to events that serve as fundraising events solely for the benefit of the operation of the organization;
(3) Public and private primary educational institutions;
(4) Those entities exempted under the existing provisions of Ohio Revised Code.
(b) The following transactions are exempt from the tax imposed by this chapter:
(1) Any admission fee paid or charged to gain entry into any event sponsored or conducted by the City;
(2) Admissions to an event wherein the charge for admission is $10 or less;
(3) Any performance or event occurring at Nationwide Arena;
(4) Admission to any sporting event or golf course for which the proceeds wholly or partly benefit a college or university, excepting tournament or playoff events organized, sponsored by, or promoted by the National Collegiate Athletic Association;
(5) Admission to an event conducted in a place having a capacity of 400 or fewer attendees.
(6) Those transactions exempted under the existing provisions of Ohio Revised Code.
(c) The following transactions are exempt from the tax imposed by Section 375.02(a):
(1) Any National Women’s Soccer League performance or event occurring at the stadium on Franklin County Parcel No. 010-300553, currently known as ScottsMiracle-Gro Field.
(cd) The exemptions defined in this section shall be reassessed every three (3) years.
SECTION 2. That existing Sections 375.02, 375.03, 375.05, 375.09 of the Columbus City Codes are hereby repealed.
SECTION 3. That the City Auditor is hereby authorized to establish a subfund within the Creation, Innovation, and Inclusion Fund, Fund 2255, titled “NWSL Facilities Projects,” in order to properly track and account for the fiscal activities while the allocation under Section 375.03(g)(1). of the Columbus City Codes is applicable; at the reasonable discretion of the City Auditor when Section 375.03(g)(1) of the Columbus City Codes is no longer applicable, the Additional Admission Fee Revenue may be deposited into the subfund in Fund 2255 that already exists as of the date of this Ordinance.
SECTION 4. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.