Lucas County Treasurer Ray Kest said yesterday that he expects some criticism of his plan to purchase $22.5 million in bonds to help finance a new arena in East Toledo, “but sometimes you have to be innovative.”
Mr. Kest said that he considers the move a “prudent investment, and I'm confident I'm fulfilling my duty to the taxpayers.”
The treasurer said Tuesday that he intends to buy bonds issued by the Toledo-Lucas County Port Authority, which will become the owner of the proposed facility.
Frank Kass, a Columbus developer, has said having an arena is a necessary part of his plans to develop an entertainment and residential complex, to be known as the Marina District, on about 125 acres northeast of Main Street, between the Maumee River and Front Street.
The new arena would be built on the site of the former Toledo Edison Acme power plant on Front Street, near I-280. Developers have said that location would attract more people from north and south of the city.
Under current plans, apartment buildings would occupy the current site of the Toledo Sports Arena, which would allow occupants a view of the Maumee River and the downtown Toledo skyline.
The project will include a multi-screen movie theater, restaurants, and other entertainment venues.
The city of Toledo is being asked to forgive Mr. Kass $30 million in taxes, which would be used to pay for part of his portion of the development. The plan also calls for the city to spend $8 million on infrastructure and to clean up the Acme site.
The city also has been asked to pay $385,000 for a risk assessment study of the brownfield site.
Barbara Herring, city law director, said it is not yet clear whether the city will have to seek voter approval for its participation.
Section 79 of the city's charter states that the city administration must have approval from the electorate if it seeks to construct, acquire, or lease a sports facility.
Ms. Herring said the project is in its early stages and eventually will involve many public and private entities.
She added that the city's role will be clear and that if its involvement requires a vote, “we certainly won't violate the charter.”
Mr. Kest said that under a state law passed last year, he is allowed to purchase bonds issued by a political subdivision of Lucas County and that the port authority qualifies.
He said he does not need the permission of the county commissioners to purchase the bonds.
County Commissioner Harry Barlos said he thinks the project is a good idea, but questions the planning that has occurred so far. He pointed out that before the commissioners moved ahead with plans for a downtown ballpark, they hired a nationally known sports-facility consulting firm which investigated a number of sites before choosing the downtown location bounded by Washington, St. Clair, Monroe, and Huron streets.
He said parking studies were done and community leaders interviewed and that consultants held four public forums before a site was selected. “It seems to me we may have the cart before the horse,” Mr. Barlos said.
Commissioners will be asked to supplement the arena budget with $250,000 a year, which would be added to a projected $1.75 million annual lease of the arena by Global Spectrum, a Philadelphia-based arena management company.
A new arena is expected to cost about $40 million. Construction would by paid by the $22.5 million in bonds, with the rest coming from naming rights and the sale of luxury suites.
Plans call for the arena to hold 10,000 for sporting events and up to 12,000 for concerts and other shows.
It is expected that the Toledo Storm would play 40 hockey games annually at the site.
Commissioners earlier were approached about the county building and owning the arena, but all three commissioners rejected the idea.
At the time, Sandy Isenberg, president of the commissioners, said: “We told Mr. Kass that if there are ways we can help the project, we'll help - but we're not going to own an arena.”
Commissioner Bill Copeland said yesterday that he, too, thinks it's too early to commit money to the project.
“We need to see what kind of guarantees there are. It will be wonderful for the public, but I think we need to be sure about what kind of return there is for any investment.”
Mr. Kest said the annual contribution of $250,000 by the county would be offset by a projection that the Marina District would provide about $750,000 in additional sales tax revenue.
Although he supports the project and is willing to invest the $22.5 million, Mr. Kest said he first would seek an outside financial analysis of the plan.
“We put together what I think was a very conservative approach to looking at the financing, but I would still seek another opinion before making a final commitment,” he said. “We make investments all over the country, and it would be nice to make one in our own county for a change.”