The City of Columbus is paying Nationwide $65 million in a deal connected to repaying the insurance company for a non-performing loan it made to facilitate the sale of Nationwide Arena to the public in 2012.

The city of Columbus has agreed to give Nationwide $65 million from a unique property-tax fund as part of a larger deal to repay the insurance company for a nonperforming loan it held related to its 2012 sale of Nationwide Arena to the public.

The new contract is dated Oct. 31 — the same day that Nationwide sold 21 acres of land west of the Huntington Park baseball stadium, ending an 11-month negotiation that stood in the way of building a new Arena District stadium for Crew SC.

It's unclear what, if any, strings are attached to how Nationwide can use the $65 million awarded to it in tax increment finance, or TIF, dollars.

TIFs divert property taxes into special funds, typically used for public improvement projects. But the type of TIF in this case allows for more than the usual streets and sidewalks. The money “may be used for any purpose” not prohibited by Ohio law, documents say.

Nationwide can use the $65 million or portions of it to reimburse itself for the loan, Michael Stevens, the city's interim development director, said in an email in response to Dispatch questions.

But nowhere does anything approved by the city council or signed by the city Department of Development explicitly say the money is related to repaying Nationwide for the arena loan.

The new contract says the parties wanted a “modernized TIF arrangement that will result in a simplified payment structure” for the “mutual benefit of both parties” to fund “various obligations.”

The city council ordinance, passed 5-2 in July, stated that the city Development Department could enter into a new contract “to outline plans and certain commitments” relating to the redevelopment of the Arena District.

Documents show the city's TIF payments to Nationwide are connected to an agreement also signed in October between Nationwide and the Franklin County Convention Facilities Authority. That memorandum of understanding agrees to restructure a $44.2 million loan the company made the authority in 2012 to buy and maintain the arena.

The authority has not repaid a penny of that loan, and Nationwide had no legal recourse, having agreed that if city and Franklin County casino revenues didn't raise enough to cover the payments, the loan simply would go unpaid.

In the new agreement, the authority will pay Nationwide a lump sum of $51.5 million to retire the loan in 2029 and refers to the city's TIF contribution: The authority gets a dollar-for-dollar credit if TIF dollars paid to the company total more than $10.84 million by 2029.

Don Brown, the executive director of the convention facilities authority, said the deal is a bargain because the principal and interest owed at the end of 2019 was $64 million, and would be $103.4 million by 2029 if left unpaid.

It's unclear how long it would take for the TIF to generate the full $65 million due Nationwide. The new TIFs, good for 30 years, won't affect Columbus City Schools but will divert taxes from other agencies that receive property taxes, including the Columbus Zoo and Aquarium, Franklin County Metro Parks, Franklin County Children Services and the Columbus Metropolitan Library system.

Asked how the $65 million figure was determined, Stevens said, “I'm sure that it was a negotiated amount based on what the TIF would generate.”

In addition to granting Nationwide the $65 million, the Oct. 31 contract also obligates the city to contribute another $20 million toward public infrastructure improvements in the Arena District during the next four years, at $5 million a year. The TIF will reimburse the city for those dollars, Stevens said.

In return, the company commits in the contract to building a 130,000-square-foot office building north of the arena. A similarly sized Chipotle headquarters already has been announced for the area.

Nationwide also “intends to redevelop” other various sites, some of which it doesn't yet own, the contract states.

“Please remember that the developer can be reimbursed from the TIF only if they invest in new projects that generate TIF revenues,” Stevens said.

Stevens didn't respond to questions about whether the debt restructuring happened because the city needed Nationwide's land for the new Crew stadium.

“I think the greater good was served by passing this legislation, in my opinion,” said council member Emmanuel Remy, who chaired council's development committee that forwarded the ordinance, noting that Nationwide's investment in new Arena District projects ultimately could be worth hundreds of millions of dollars.

But how much did Nationwide get in the end to repay the loan, again projected to total more than $103 million by 2029 because of unpaid interest?

Stevens said paying off the loan isn't costing the sum of the city and the facilities authority's contributions.

“Nationwide is not getting $116.5 million as repayment for the arena,” Stevens said. “A portion of the $65 million can be used to pay the (arena) debt. However, it is not added onto the principal and interest due Nationwide.

“This is a good deal,” he said.

Dispatch Reporter Mark Ferenchik contributed to this story.

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