Well, the Mud Hens are purchasing a controlling interest in The Storm Hockey Team - and good for them! (see Blade article for details)
The Mud Hens organization is terrific and I believe they bring much-needed credibility to any Arena project. But, in any transaction, the devil is in the details.
According to the article, the Mud Hens have formed Toledo Arena Sports, Inc., a non-profit, to own the team. The Mud Hens will give the County the money to actually make the purchase.
The article continues: "“Once the hockey team is up and running, it will reimburse the Mud Hens for the purchase price,” Mr. Napoli said.
The net proceeds of the hockey team will be used to run the franchise, with any profit used to whittle down the mortgage on the new arena."
Sound familiar? It should - because this was the same deal for 5/3 Field...except that the additional proceeds from operations at 5/3 Field did NOT go to reduce the mortgage/bonds. They were - and continue to be - used to balance the general fund budget of the County. Oh, the County makes its scheduled payments, but that additional income has not been applied as originally stated.
Do we think it's possible the same may hold true for a new arena? I, for one, do. Which is why I hope that the Mud Hens have learned their lesson from 5/3 Field and get an airtight agreement with the County for how any additional income/profits are to be expended.
And, since the Mud Hens have to come up with cash for the actual purchase, do we think that their additional profits from this past season might be the source? And what will the County do if that additional income (usually around $1 million) goes to purchasing The Storm instead of directly into the general fund for day-to-day operations? Have they budgeted for this lack of income in 2007?
The devil is in the details...