Commissioners vote to amend lease amendment for downtown arena

5/26/2010

Lucas County commissioners voted yesterday to amend parts of a lease agreement for the new downtown Toledo arena that, if left unchanged, could have potentially imperiled the naming-rights deal struck last month with Huntington National Bank.

"We would like to clarify a few words," said Pete Gerken, board of commissioners president.

Commissioners voted 2-1 to make changes to the leasing contract between the county, which built and owns the gleaming 8,000-seat Huntington Center, and Toledo Arena Sports Inc., a nonprofit corporation that owns the Toledo Walleye.

The problem involved wording in a section of the lease pertaining to naming rights. It was unclear the way the document was written whether Toledo Arena Sports ever had authority last month to enter into the naming-rights contract with Huntington.

Commissioners Pete Gerken and Tina Skeldon Wozniak voted in favor yesterday of amending the lease.

Commissioner Ben Konop sought unsuccessfully to table the amendment, arguing instead for more time to look into several deal sweeteners in the naming-rights agreement.

"Great deal for Huntington; I give them kudos," Mr. Konop said. "Is it a great deal for taxpayers? That's the question."

County officials insist that their intention all throughout the project was to have Toledo Arena Sports negotiate naming rights, even if the lease didn't spell that out.

"This will make even more clear the intent that I think was clear from the beginning," Mr. Gerken said of the amendment.

"The bottom line is by passing this clarifying resolution, we're actually protecting taxpayers," Ms. Wozniak said.

A county-hired consultant, Thomas Chema of Gateway Consultants Group Inc. was to help secure a naming-rights sponsor, among a host other responsibilities, for which his firm was paid $789,665.

Mr. Chema recently admitted to some "ambiguity" in the lease that he said he wrote. Yesterday, Mr. Gerken said the document's problematic section was inserted at the request of Toledo Arena Sports.

Joe Napoli, who heads Toledo Arena Sports and is general manager of the Walleye and Toledo Mud Hens, said the section's intent was to assure Toledo Arena Sports' role in the project if the county happened on its own to negotiate naming rights. The wording was taken verbatim from the Mud Hens' lease agreement with the county for Fifth Third Field.

Huntington agreed to pay an initial $2.1 million over six years under the agreement it signed April 15 with Toledo Arena Sports. The deal could total $11.1 million over 24 years if the bank exercises three six-year extensions. The county is banking on that revenue to help pay debt on the $98 million arena project.

Mr. Konop spoke critically yesterday for close to 20 minutes about the handling of the naming-rights contract and whether the county got a good deal.

Mr. Gerken in turn criticized Mr. Konop for stirring up controversy.

"Do you want us, at the end of the day, not to have a naming-rights deal?," Mr. Gerken asked. "We've been fortunate to have private investment in this building and I don't want that to be lost."

Mr. Konop said he believes the public deserves to know details of a county asset - arena naming rights - that was sold. He has asked the county prosecutor's office for an opinion on whether it was a conflict of interest that Mr. Chema was previously a paid consultant for Huntington when the bank negotiated to buy naming rights in 2006 to Franklin County's baseball stadium - Huntington Park.

Mr. Chema, who is president of Hiram College, insists that he had disclosed his past work with Huntington, for which he says he was paid less than $10,000.

Mr. Napoli spoke positively yesterday of Mr. Chema's contributions to Lucas County's arena project.

"Tom comes with a long list of projects with an excellent reputation and a world of experience, so we were so pleased to have him involved," Mr. Napoli said.

Contact JC Reindl at:

jreindl@theblade.com

or 419-724-6065.