Konop, Sarantou back arena despite studies

At an estimated cost of $80 million, the proposed downtown Toledo arena represents the equivalent of about 60 percent of Lucas County's annual budget.

Republican George Sarantou and Democrat Ben Konop, who are vying for the third seat on the county board of commissioners in the Nov. 7 general election, said they support the arena because it doesn't require any new taxes - on registered voters. Out-of-town hotel and motel guests would shoulder the costs.

Their support is based largely on the action plan for the arena submitted to the commissioners in August. The plan discounts academic research showing that new sports facilities have little to no effect on a local economy.

A two percentage-point increase of the county's hotel/motel tax would help pay for the 30-year bonds needed to raise $43.7 million up-front for the arena.

The rest of the $80 million for the arena would come from $14 million in private funding raised through naming rights and corporate suites, a $12.25 million state development grant, $9.9 million in debt financed through revenue bonds paid for by the arena's potential annual net income of $702,000, and a $2 million federal grant. The arena could house minor league hockey, indoor football, concerts, and conventions.

Mr. Sarantou, a Toledo city councilman, called the arena "one of the most exciting projects we could have in the next 20 years." But the private $14 million must surface before any plan goes forward, he said.

"If the commissioners and the people organizing this effort can get naming rights, then we're on the way to succeeding," Mr. Sarantou said.

Mr. Sarantou hopes that the University of Toledo's planned $30 million renovation of its Savage Hall will not compete for private dollars or concerts.

Mr. Konop, an attorney, seconded this position, explaining that the nature of government financing encourages projects such as the arena.

"A lot of this money isn't available in other ways," Mr. Konop said. "We have access to this capital, so we should take advantage of it because this will be an economic development engine."

Despite the marketing research in support of a downtown arena, there is no guarantee of success. Both candidates said that a 10,000-seat arena in Toledo would be a prime concert venue.

However, pop star Ashlee Simpson failed to sell out the Toledo Zoo this summer, a sign of "Toledo's good judgment," in Mr. Konop's opinion.

Hotel owners in Lucas County outside the downtown radius might not garner additional revenues from the new arena and are concerned a higher countywide room tax could drive their business to competitors in Wood County and elsewhere. Those hotel operators are scheduling meetings with the commissioners to discuss their perspective, said Rich Nachazel, general manager of the Hilton Toledo on Glendale Avenue next to University Medical Center.

Despite the new restaurants and businesses that have sprung up near Fifth Third Field in Toledo's Warehouse District, a 2003 survey of academic research on new arenas and stadiums by economists Dennis Coates and Brad Humphreys undermines claims by politicians of job and income growth.

"No retrospective econometric study found any evidence of positive economic impact from professional sports facilities or franchises on urban economies," it reads.

The study notes that government subsidies, which would cover about 70 percent of the Toledo arena's costs, often come at the expense of police, street repairs, and education.

It attacked "economic impact" studies on arena proposals.

The studies rarely explain that families have a limited entertainment budget, causing civic leaders to overstate potential economic gains. Families might spend money at a new arena, but they cut back on movie tickets, bowling, and meals at restaurants.

Mr. Konop said it is difficult to quantify the real value of a new arena. He said an arena is a point of pride showing that Lucas County is "not afraid to invest in itself and we're ready for the 21st century."

"Most arenas and convention centers are not individually profit centers, but what I look at also is what kind of economic synergy comes from these places," Mr. Sarantou said.

Contact Joshua Boak at:

jboak@theblade.com

or 419-724-6728.