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April 30, 2009
Indiana to stadium board: Drop dead
What if they built a stadium and nobody maintained it? The Indiana general assembly failed to agree on a bailout plan for the Indianapolis Capital Improvement Board yesterday, leaving the board that runs the Colts' Lucas Oil Stadium and the Pacers' Conseco Fieldhouse with a $47 million a year budget hole and no way to fill it.
The CIB has called an emergency board meeting for tomorrow, at which it will consider ... well, no one seems to have much in the way of ideas. Indianapolis Mayor Greg Ballard "said they must do something," according to WISH-TV, adding that the city could turn the stadium board over to the state, but he doesn't like that idea; it's hard to see where the state would like it either, since they already said they don't want to be stuck with the board's debts. Then there's the suggestion, also from Ballard's office, that Colts owner Jim Irsay might want to make a donation to the arts in lieu of paying rent; three guesses what Irsay's reaction will be to that one.
The underlying problem remains the teams' leases, which grant them pretty much all revenues from their buildings and ask them to pay next to nothing in rent ($250,000 a year for the Colts, $1 a year for the Pacers); it's hard to find money to pay maintenance and operations when you don't have any income. Nobody really thinks that the CIB will go ahead with its threat to close the buildings if it doesn't get a cash infusion, it's hard to imagine what they'll do to get out of this one.
The CIB is a joke, a very costly joke. First of all the contracts with the Pacers and the Colts give all of the revenue from Conseco (Pacers) and Lucas (Colts) to the teams. The Pacers get 100% of the revenue from Conseco on a building that cost the taxpayers 183 million, they do pay 15 million per year for building maintenance. Whereas the Colts get game days expenses, concessions, parking, advertising, suite revenue, signage and 50% of non-game day revenue from other events. The Colts pay 25k per game up to a maximum of 250k per year. Cheap rent on a 720 million dollar building and they don't pay any building maintenance.
Then there is the CIB. From their last contract to 2009 contract they added 20 million dollars. Of that 20 million, 9+ million was salaries, 4 million was for land acquisition. They automatically agreed to 'give' the Pacers the 15 million dollars they pay in maintenance currently without any negotiation or public comment. Furthermore the Pacer owners aren't charged for the use of a city owned parking garage, another 3.45 million freebie. The CIB bought short term high risk bonds and incurred a 17 million dollar penalty when the interest spiked. The CIB has been in the red for the previous 10 years, a salient fact that the CIB didn't bother to disclose until we built Conseco and Lucas at a combined bond cost of 1+ billion dollars.
Posted by Vox Populi on May 1, 2009 09:14 PM
What is frightening, despite the accuracy of the comments by Vox Populi above, the only current discussions revolve around the question of how to raise still more tax dollars to give to the same people for doing the same things. Not a single businessman - nor business organization - nor political leader, has suggested we first try to find out how we got where we are.
Posted by Fred McCarthy on May 2, 2009 12:59 PM