By law (Ohio Revised Code Section 3383), "Ohio sports facilities" are defined as all or a portion of a stadium, arena, tennis facility, motorsports complex, or other facility in Ohio that serves as a venue for motorsports events, professional tennis tournaments, or events of one or more major or minor league professional sports teams.
After these types of sports facilities projects receive appropriations through the capital improvements bill, they must satisfy a series of state standards before the Commission can expend the appropriated funds.
Standards for Bond-Funded Construction Projects at Sports Facilities
While not a complete list, following is a brief overview of the standards for bond-funded sports facility projects. For a more in-depth description of the standards and procedures related to bond-funded sports facility projects, please refer to our Sports Facility Project Sponsor Resource Guide.
- The project site must be owned by an Ohio governmental entity (see statute);
- A major or minor league professional team, a national or international professional tennis organization, or a major motorsports events producer must serve as the facility's primary presenter;
- The project sponsor must have a long-term lease or contractual commitments with the sports team, motorsports events producer or professional tennis organization, typically for a period of 20 years;
- The sports facility must be at least 85% locally funded. The state's funding contribution is as a junior partner and is capped at a maximum of 15% of the initial estimated cost of construction, as determined by the Commission, not including the cost of land acquisition. Please note that projects are not guaranteed a 15% share from the state; rather, 15% is a maximum amount. In no event will sports facilities projects receive more funds than are appropriated by the Legislature and the Governor;
- The owner of the property may not enter into any mortgages or allow any liens to be placed on the property without the Commission's concurrence;
- The project sponsor with which the Commission will enter legal agreements must be an Ohio governmental entity (usually a city or county government);
- The project sponsor is subject to the public bidding requirements of Chapters 123 and 153 of the Ohio Revised Code for all construction services and general building services contracts, unless the Department of Administrative Services determines that local ordinances can be utilized;
- The project sponsor must demonstrate, through a project financial review, that it possesses adequate resources to fund the project (or phase of the project, if applicable) in its entirety. A project is "fully funded" when the project sponsor can demonstrate that the funds to pay for all hard and soft costs of a project have been raised;
- The project sponsor must demonstrate that it will have an open and operable facility for the duration of the Commission agreements. To do so, a representative of the project will be asked to certify – as accurate to the best of his or her knowledge – a financial and development plan that includes an operating pro forma or equivalent.
- Typically, two legal documents are required for bond-funded sports facilities projects: a Cooperative Use Agreement, and a Construction Administration and Funding Agreement.
- Cooperative Use Agreement–Because the state's capital appropriations are financed through long-term bonds, the Commission must obtain a long-term interest in the facility. The Commission will need to enter into a Cooperative Use Agreement for the facility and site for 15 years or more. Through the agreement, the state agrees that the local sponsor will operate the facility, while the local sponsor agrees to present professional sports to the public.
- Construction Administration and Funding Agreement–This agreement includes details regarding construction services and the local sponsor's responsibilities, and is used in conjunction with the Cooperative Use Agreement as described above.
Planning Projects at Sports Facilities
Sometimes communities receive appropriations for planning and feasibility studies. These projects can be assigned to the Commission; however, the Ohio Revised Code requires certain standards to be met prior to the expenditure of state funds for sports facilities. If a planning project is undertaken for a sports facility, special language should be attached to the appropriation in the capital bill by the Legislature. The Commission staff can assist legislators with examples of such language from prior capital bills.
GRF-funded sports facilities planning projects typically are required to enter into one agreement with the Commission–a GRF grant agreement.
