Before I begin this post, let me first disclose that I bank at Huntington. Way back when, all our family and business banking was done at First National Bank. When they were taken over, they eliminated a product we'd been using, negatively impacting our banking processes. We looked for a new bank and Huntington was the only bank to work with us to address the need. So we switched the business and then the personal accounts to Huntington - and we've all been very happy with their services over the past 20 years.
So this post is NOT about Huntington Bank's banking services nor their customer service.
It is about the fact that the Lucas County arena has a new name, Huntington Center, as this bank has purchased the naming rights.
The naming rights were sold for $2.1 million.
Yes, that's right, $2.1 million. The article does say there is a separate sponsorship agreement and if the 6-year contract is renewed three times as allowed in the terms, the total could be $11 million.
So that's $11 million possible over 24 years.
We should be rejoicing, right?
Well, sort of. I'm glad they've found a name for the arena and that the total deal is greater than what was paid for the Mud Hens' 5/3 Field. However, this is short of what was budgeted.
The original budget called for $14 million in naming rights alone. That amount was dedicated to the construction of the facility and, according to the news reports, the proceeds from the agreement will got toward paying down the $90 million debt.
The arena was originally budgeted at $85 million. The final constructions costs were roughly $105 million. The sources of revenue identified were questionable in terms of actually coming in at the rate projected and now that we have the naming rights settled, we have a better picture of just how much we don't have for a facility that cost $20 million more than estimated.
So where are we short? Well, let's start with the $20 million fronted by the County Commissioners that doesn't seem to be on anyone's radar for repayment.
The commissioners counted on $12.5 million from the states' capital budget through the Ohio Cultural Facilities Commission. We only got $7.7 million, so we're short $4.8 million there.
Considering the economy, I question whether or not we're making $1.5 million a year in hotel/motel taxes. The commissioners budgeted a total of $42.5 million over 30 years from that revenue source.
The commissioners also thought they'd collect money from parking. I don't know if you've heard anything about that, but I haven't see any agreements with parking lot owners on the agenda for approval by the Board of Commissioners, so that's another source of revenue not met.
So what's the bottom line? Good question. Apparently no one in the main stream media wants to know, as they're not asking the question, or if they are, they're not reporting on the answer.
But I can tell you, as I've done before, that we - the taxpayers of Lucas County - are on the hook. The commissioners have pledged the full backing of the taxing authority of the county against any shortfalls.
I hope the arena is so successful that the revenue can cover the $8 million shortfall from unrealized revenue sources in addition to the roughly $32 million the county fronted from the Capital Improvements Funds as well as the roughly $25 million in additional costs to construct the facility.
I'm hopeful - but not stupid. I expect that sooner or later, the county will have to not fund certain items in order to ensure the interest and principle on the bonds are paid. And when the county doesn't have enough money in the general fund to do everything they're already doing plus cover that debt, they'll come to us.