Cost for downtown arena could go up to $82M

7/29/2006

A downtown Toledo sports arena would have a price tag of up to $82 million and would be paid for with the help of tax credits and revenue-sharing agreements with parking lots and surrounding businesses that would profit from its construction.

A consultant's report on how much the arena would cost and how it could be financed is expected to be released early next month by Tom Chema of Gateway Consulting, which was behind the successful Fifth Third Field project.

"Numbers are numbers, and we are awaiting our consultant's report. We have challenged him to drive the cost down. But we understand that things like steel and labor keep going up, rather than down," Lucas County Commissioner Pete Gerken said. "There are various funding streams being discussed. We will put together a menu, keeping in mind that the taxpayers don't want any new form of tax. We are going to see what businesses we can partner with."

Mr. Gerken said it appears there would be enough money generated by the arena, including private money to buy naming rights and luxury sky boxes, to cover the cost.

"I think it's close to that [$82 million] area," he said. "I prefer to have a number that starts with a 7 than an 8, but we don't want a phony number, and we want the community to discuss what that is. We could have a $60 million price tag that doesn't include x and y."

Despite the move to have a downtown arena, some east-side political forces have worked against it, preferring to have the current Toledo Sports Arena on Main Street at the foot of the Martin Luther King, Jr., Bridge rehabbed.

But the city, which bought the current sports arena for $5 million, plans to knock it down and eventually turn the waterfront area near the King bridge into a retail area that is part of the planned Marina District development.

The proposal for a downtown arena also received a blow this month when new University of Toledo President Lloyd Jacobs said UT would not be a partner in the project.

The university, which recently merged with Medical University of Ohio and named Dr. Jacobs president, has decided to renovate Savage Hall, using a $5 million donation, so Rocket basketball can continue to be played on campus.

Lucas County commissioners, who have the authority to sell bonds, have taken the lead on the arena project because of a city ordinance that says a new city-funded sports arena would have to be built in East Toledo. The county can sell bonds and move ahead with the deal.

There are several sites under consideration for the arena, including the space across from SeaGate Centre between the Owens Corning Fiberglas Tower and Frogtown Alley, an area that includes Club Bijou and the Golden Lily Chinese restaurant. Those structures would be razed, and Superior would be closed by a new arena attached or adjacent to SeaGate.

There are other downtown sites under consideration that also would be close to the convention center, in an effort to concentrate entertainment in the Warehouse District or on its edge. The arena project has already scared up some major money.

State Sen. Randy Gardner (R., Bowling Green) has secured $5.5 million in state money set aside for several years now in the state budget.

Lucas County Treasurer Wade Kapszukiewicz plans to use a complicated bond formula to unlock about $15 million for some seed money, which would eventually have to be paid back from arena revenues or taxes.

Under the plan, the county commissioners would sell a bond to his office, which controls about $265 million. That money would need to be invested somewhere else until it is needed for the arena. A local bank would have to win that business.

Parking is plentiful in downtown and within reasonable walking distance of the arena, one of the major advantages of the project, Mr. Gerken and Mr. Chema said.

To handle the worst-case scenario on a summer night - 10,000 fans to watch the Mud Hens, up to 10,000 in a new downtown arena, and 5,000 conventioneers at SeaGate Centre - would require 10,000 parking spaces within walking distance. Toledo has 19,992.

Contact Christopher D. Kirkpatrick

at: ckirkpatrick@theblade.com

or 419-724-6077.