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 acquisition, operation and maintenance of Nationwide Arena, located in the Columbus Arena District, in Columbus, Ohio.
This ordinance authorizes the Mayor or the Director of Finance and Management to enter into a Lease Agreement and Sublease Agreement on behalf of the City among Franklin County, the CFA, and the City, and any other necessary agreements, for the purpose of facilitating part of the financing necessary for the CFA to purchase, operate and maintain Nationwide Arena.
The acquisition of Nationwide Arena will protect and create thousands of jobs in the Arena District and allow for the Arena District to continue as one of the City's most successful economic development performers. An economic impact study conducted by the John Glenn Institute at The Ohio State University identified 7,000 jobs in the Arena District in 2006. Since then, the Arena District has added 1,230 jobs, and expansions are underway now that will draw another 2,200 jobs over the next three years. The report by Stephen Buser, Ph.D. for the Columbus Chamber stated that the Arena District and Nationwide Arena generate $20.4 million annually in state and local income tax revenue.
Additionally, the Arena District has become a thriving residential community with more than 1,000 residents. Nationwide Arena is a critical component to the economic and community development success of the Arena District and the surrounding region. Both the public and private sectors value the Columbus Blue Jackets and Nationwide Arena's contribution to Central Ohio's business and entertainment landscape.
The City and County will enter into a lease and sublease arrangement with the CFA that will allow the CFA to purchase, operate and maintain Nationwide Arena. No general fund dollars from the City will be used for either the lease or the sublease term. Annual appropriations for a specified percentage of the casino tax proceeds received by the City from the State will be used for the purchase, operations and maintenance of Nationwide Arena. The CFA will issue its arena lease revenue bonds secured by the City and County's lease payments, and may enter into financing arrangements with the State also secured by such lease payments. This ordinance also approves those financing arrangements.
Recognizing Nationwide Arena's impact on the economic viability of the Arena District, Downtown, and all of Central Ohio; the City, County and State have formed a cooperative relationship to share in the cost to acquire, operate and maintain Nationwide Arena. The City intends to and will contribute a percentage of its casino tax proceeds based upon a comparable commitment by the County, which will contribute a percentage of its casino tax proceeds. In addition, the State is expected to make an investment through a $10 million loan to the CFA. The agreements authorized by this ordinance will be contingent upon all parties' approval and participation
FISCAL IMPACT: There will be no immediate fiscal impact; however, beginning with the lease and sublease term, annual appropriation will be sought for a specified percentage of the casino tax proceeds received by the City from the State for the remainder of the lease and sublease term.
Title
To authorize the Mayor and/or Director of Finance and Management to enter into a Lease Agreement and Sublease Agreement on behalf of the City among Franklin County, the Franklin County Convention Facilities Authority, and the City, and any other necessary agreements, for the purpose of facilitating part of the financing necessary for the Franklin County Convention Facilities Authority to purchase, operate and maintain Nationwide Arena, and to approve loan arrangements with the State of Ohio and the issuance of arena lease revenue bonds by the Franklin County Convention Facilities Authority for such purpose.
Body
WHEREAS, the City of Columbus, Ohio (the "City") over the past 10 years has invested over $140 million dollars in Downtown public infrastructure improvements; and
WHEREAS, as a result of the investment, the City recognizes the Downtown as the region's largest employment center with approximately 100,000 jobs; and
WHEREAS, as a result of the investment, it is estimated that Downtown generates income tax revenue over $100 million annually; and
WHEREAS, the Arena District is a successful redevelopment project within Downtown; and
WHEREAS, the Arena District has an investment of over $1 billion of public and private improvements; and
WHEREAS, as a result of the investment, the Arena District has approximately 1.2 million square feet of office space; and
WHEREAS, as a result of the investment, the Arena District has more than 170 businesses, resulting in over 7,000 jobs; and
WHEREAS, as a result of the investment, the Arena District is home to a thriving residential community with more than 1,000 residents; and
WHEREAS, Stephen Buser, Ph.D.completed a study that stated that the Arena District and Nationwide Arena generate $20.4 million annually in state and local income tax revenue; and
WHEREAS, Nationwide Arena is a critical component to the economic and community development success of the Arena District; and
WHEREAS, the public and private sectors recognize that the Columbus Blue Jackets and Nationwide Arena have become an integral part of Central Ohio's business and entertainment landscape; and
WHEREAS, the City, Franklin County (the "County"), the Franklin County Convention Facilities Authority (the "CFA") and the State of Ohio (the "State") have formed a cooperative relationship intent on maintaining and increasing the economic viability of the City's Arena District, Downtown, and all of Central Ohio, and have been engaged in cooperative efforts to facilitate the CFA's acquisition, operation and maintenance of Nationwide Arena, located in the City's Arena District; and
WHEREAS, it is anticipated that the CFA will purchase, operate and maintain Nationwide Arena and will finance a portion of such purchase, operation and maintenance by entering into financing arrangements with the State acting through its Department of Development or other instrumentalities and agencies, which will make an investment in form of a $10 million loan (the "State Loan"), and by the issuance of arena lease revenue bonds (the "Bonds"); and
WHEREAS, it is anticipated that the County will provide specified 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 assist the CFA in financing the CFA's purchase, operation and maintenance of Nationwide Arena; and
WHEREAS, the City, in an effort to retain jobs, protect existing public investment, and encourage additional job growth, will provide specified percentages of the proceeds 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 (the "City Contribution") to the CFA to assist the CFA in financing the CFA's purchase, operation and maintenance of Nationwide Arena; and
WHEREAS, the City Contribution is to be in the form of lease payments to be made by the City to the CFA pursuant to a lease and sublease arrangement among the City, the CFA and the County (the "City Lease Payments"); and
WHEREAS, the CFA will pledge the City Lease Payments and payments to be received from the County pursuant to such lease and sublease arrangement as security for the State Loan and the Bonds; and
WHEREAS, the City Lease Payments will be paid exclusively from the City Contribution and will not use any City Income Taxes; and
WHEREAS, the City Lease Payments will have no impairment to the City's Capital Improvement Plans; and
WHEREAS, the City Lease Payments will be subject to annual appropriations, and such appropriations will be subject to approval by City Council; now, therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Mayor and the Director of Finance and Management ("Director"), and either of them acting singly, are hereby authorized to enter into a Lease Agreement ("Lease") and Sublease Agreement ("Sublease") on behalf of the City among the CFA, the County, and the City for the purpose of facilitating part of the financing necessary for the CFA to purchase, operate and maintain Nationwide Arena, located at 200 West Nationwide Blvd., Columbus, Ohio, together with associated parking and practice facilities and public spaces, with the execution and delivery of the Lease and Sublease by such officer(s) on behalf of the City to be conclusive evidence of such authorization.
Section 2. That the terms and conditions of the Lease and Sublease, which may be contained in one consolidated agreement or in multiple agreements, shall be in a form approved by the City Attorney and shall include the following:
a) All City Lease Payments shall be based solely on a percentage of the City Casino Taxes, subject to the yearly appropriation of the funds by City Council and certification of availability by the City Auditor as required by Section 159 of the Columbus City Charter. Such percentage of the City Casino Taxes shall begin at 25% through 2015, then increasing annually in 1% increments to a maximum of 32% beginning in 2022. These agreed percentages may be subject to reduction after retirement of the Bonds and the State Loan.
b) The Lease and Sublease shall be effective for a period of twenty-seven (27) one-year terms, each term automatically renewing subject to and upon the appropriation of funds by City Council and certification of availability of funds by the City Auditor. The Lease and the Sublease may provide that the term of the Lease and Sublease may be subject to extension based on the actual amount of City Casino Taxes being less than projected.
c) Such other terms and conditions as required or as approved by the City Attorney and the City Auditor, provided such other terms and conditions are consistent with this Ordinance, with the execution and delivery of the Lease and Sublease on behalf of the City to be conclusive evidence of such requirements, approvals and consistency.
Section 3. That the City hereby consents to CFA's entering into the State Loan and to the issuance of the Bonds by the CFA, and to the pledge of the City Lease Payments as security therefore. The Mayor, the Director, and other appropriate officers of the City, and any of them acting singly, are hereby authorized to execute and deliver such documents evidencing such consents as shall be approved by the City Attorney and the officer(s) executing the same, such execution to conclusively evidence such approvals.
Section 4. That the Mayor, the Director and other appropriate officers of the City are hereby authorized to execute such other documents and instruments and to take all actions as may be necessary to implement this Ordinance and the transactions contemplated by the Lease and the Sublease, as determined and approved by the City Attorney and the City Auditor.
Section 5. That it is hereby found and determined that all formal actions of this Council concerning and relating to the adoption of this Ordinance were adopted in an open meeting of this Council, and that all deliberations of this Council and of any of its committees that resulted in such formal action, were meetings open to the public, in compliance with all legal requirements including Section 121.22 of the Ohio Revised Code.
Section 6. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.