Explanation
Background: The City of Columbus, Ohio (the “City”) has been engaged in cooperative efforts with the County of Franklin, Ohio (the “County”), the State of Ohio (the “State”) and the Franklin County Convention Facilities Authority (“CFA”) to facilitate the CFA’s prior acquisition and continued operation and maintenance of Nationwide Arena (the “Arena”), located in the City’s Arena District. City Council passed Ordinance No. 1569-2011 on October 3, 2011, to execute a Lease Agreement and a Sublease Agreement dated February 1, 2012 between the City, County, and CFA. Under the Lease Agreement and Sublease Agreement, the City and County each make annual rent payments equal to a defined percentage of Casino Tax Revenues. The annual rent payments support operations, capital improvements, and debt service obligations at the Arena.
The 2022 Downtown Columbus Strategic Plan, adopted by City Council under Resolution No. 0164X-2022, recommends reinforcing Downtown as the “cultural heart of the City” by developing and promoting clear differentiators for Downtown including its role as a cultural, sports, and entertainment destination. As the Arena begins its 25th year of operations, it is apparent to the City, County, and CFA that the Arena’s capital needs exceed the current allocation of Casino Tax Revenues. Recognizing the Arena’s impact on the economic viability of the Arena District, Downtown, and all of Central Ohio, the City, County, and CFA desire to further their cooperative relationship to share in the cost of maintaining and improving the Arena. This ordinance will authorize an Operating and Maintenance Agreement by and among the City, County, and CFA (the “O&M Agreement”). Pursuant to that new O&M Agreement and additional legislation submitted for City Council consideration, the City intends to and will contribute a percentage of its Casino Tax Revenues based upon a comparable commitment by the County, which will contribute a percentage of the County’s casino tax proceeds.
Fiscal Impact: No funding is immediately necessary for this legislation; however, beginning with the commencement of the O&M Agreement term, annual appropriation requests will be submitted for City Council consideration to provide a specific percentage of the casino tax proceeds received by the City from the State of Ohio for the remainder of the O&M Agreement term.
Title
To authorize the Director of the Department of Development to execute an Operating and Maintenance Agreement with the Franklin County Convention Facilities Authority and the Board of County Commissioners of Franklin County, Ohio, for the maintenance, upkeep, and improvement of Nationwide Arena. ($0.00)
Body
WHEREAS, the Arena District is a successful redevelopment project within Downtown with an investment of over $1 billion of public and private improvements; and
WHEREAS, as a result of the investment, the Arena District has approximately 7 million square feet of retail, residential, and office space with more than 170 businesses, resulting in over 15,000 jobs created since 2000; and
WHEREAS, Vista Site Selection, LLC completed a study that states that additional investment in the Arena District and Nationwide Arena (the “Arena”) therein may generate up to $6 billion in state and local income tax revenue during the next thirty years; and
WHEREAS, additional investment in the improvement and maintenance of the Arena is critical to maintaining this economic and community development success; and
WHEREAS, the 2022 Downtown Columbus Strategic Plan, adopted by City Council under Resolution No. 0164X-2022, recommends reinforcing Downtown Columbus as the “cultural heart of the City” by developing and promoting clear differentiators for Downtown including its role as a cultural, sports, and entertainment destination; and
WHEREAS, the City, Franklin County (the “County”), and the Franklin County Convention Facilities Authority (the “CFA”) have formed a cooperative relationship intent on maintaining and increasing the economic viability of the City’s Arena Distrct, Downtown, and all of Central Ohio, and have been engaged in cooperative efforts to facilitate the CFA’s prior acquisition and continued operation and maintenance of the Arena; and
WHEREAS, it is anticipated that the County will provide specific percentages of the proceeds of the tax on gross casino revenue collected by the State and distributed to the County pursuant to Art. 15, Sec. 6 of the Ohio Constitution to the CFA to support ongoing maintenance and capital improvements at the Arena; and
WHEREAS, the City, in an effort to retain jobs, protect existing public investment, and encourage additional job growth, will provide specific percentages of the tax on gross casino revenue collected by the State and distributed to the City pursuant to Art. 15, Sec. 6 of the Ohio Constitution (the “City Casino Taxes”) described below to the CFA (the “City Contribution”) to support ongoing maintenance and capital improvements at the Arena; and
WHEREAS, the City Contribution will be described within an Operating and Maintenance Agreement between the City, County, and CFA (the “O&M Agreement”) authorized by this ordinance; and
WHEREAS, the CFA will use such amounts to fund ongoing maintenance and capital improvements at the Arena; and
WHEREAS, the City Contribution will be paid exclusively from the City Casino Taxes and will not be paid from any City Income Taxes; and
WHEREAS, the City Contribution will have no impairment to the City’s Capital Improvement Budget; and
WHEREAS, it has become necessary in the usual daily operation of the City Contribution will be subject to annual appropriations, and such appropriations will be subject to legislation submitted for City Council consideration and approval; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of the Department of Development, or his or her designee (together, the “Director”), is hereby authorized to enter into an O&M Agreement on behalf of the City among the CFA, the County, and the City for the purpose of facilitating the ongoing maintenance, improvement, and enhancement of the Arena.
Section 2. That the terms and conditions of the O&M Agreement shall be in a form approved by the City Attorney and shall include the following:
a) All City payments under the O&M Agreement shall be based solely on a percentage of the City Casino Taxes, subject to yearly appropriation of funds by the City Council and certification of availability by the City Auditor as required by Section 159 of the Columbus City Charter. Such percentages of the City Casino Taxes shall not exceed the following amounts during each year of the O&M Agreement:
|
Calendar Year |
Percentage of Total City Casino Tax Receipts Received |
|
2026 |
3% |
|
2027 |
8% |
|
2028 |
13% |
|
2029 and thereafter |
18% |
b) The term of the Operating and Maintenance Agreement shall commence on January 1, 2026 and shall remain in place throughout the term of the Lease Agreement and Sublease Agreement dated February 1, 2012 between the City, County, and CFA, as each agreement may be supplemented and amended from time to time, or any successor agreement or agreements thereto. The O&M Agreement may provide that the term may be subject to extension based upon the agreement of the parties.
c) Such other terms and conditions as required or as approved by the City Attorney and the City Auditor, provided such other terms are consistent with this Ordinance, with the execution and delivery of the O&M Agreement by the Director on behalf of the City to be conclusive evidence of such requirements, approvals, and consistency.
Section 3. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.