$160 M MORE to Pacers Over Next 10 Years - How Many Cops Would That Buy Us?

IndyStar reporter, Tony Cook, has a breaking story that the CIB and the Pacers have reached a deal.

The deal would keep the team in Indy for the next 10 years, for an additional $160 M over that time.

The CIB would own the scoreboard at the end of the term; a scoreboard likely in need of replacement by then.

Curiously, Cook reports that, "the deal sticks even if the Pacers begin to lose money."  It sounds as though they might be making money already, but the taxpayers who provide them with free room and board as well as all proceeds from all events at the taxpayer-owned Fieldhouse, don't get to peek at their books.

The hard hitting negotiators from the CIB also got the City first right to buy the Pacers team should Simon die and his lenders foreclose. 

Elected officials are on the stump as we speak, trying to gin up support for increased taxes to pay for more police.  Yet, they have endless millions to throw at billionaire team owners.

This is where the City officials' real priorities lie - with the frills over the fundamentals.

Will the CIB's New Found Wealth Get SB 90 a Hearing?

It's easier to follow the plot of Games of Thrones than it is to track the fortunes of the CIB.  Is today a day when the CIB is rich? Or, have they fallen once more on the verge of bankruptcy? 

Whenever budget time comes around, when a PILOT is discussed, or when  the Mayor's office gets an itching for an even bigger CIB slush fund - well, then the CIB is pennies away from bankruptcy court.  At those times, its a wonder Peter Francis Geraci hasn't been placed on their Board.

And, after pleading poverty in order to get their hands on two new tax increases, the CIB just yesterday managed to find $2 million for Lucas Oil Stadium improvements.  Maybe they found the money in the seat cushions.  At budget time they weren't sure they had enough money to get matching carpet for the older sections of the convention center.

This $2 million follows the additional $10 million ($5 million from 2012 funds and $5 million from 2013 funds) recently handed over to the Simons.  It seems the CIB was $12 million better off than they led us to believe.  Some might think they knew about these 'expenses' when they were protesting the $15 million PILOT levied against them by the Council Democrats.  That, of course, was before eight of the Council Democrats caved in and swapped the PILOT for two tax increases.  But, I digress.

Let's not forget who is running the show.  The Mayor gets 6 of the 9 appointments to the CIB.  The same Mayor who wants to neuter the Council (and gets most of the Republican Councillors' blessing to do so).  The same Mayor who puts out to the press the possibility that THIS next budget may have to include police and fire layoffs to make ends meet.  This same Mayor who is spending tens, if not hundreds of millions from TIF slush funds, Airport slush funds, and CIB slush funds to make certain people wealthy and help others climb higher on the Forbes richest people in the world list.  This Mayor's priorities are screwed up and he needs to be held accountable.

All the CIB stuff hitting the fan yesterday, made me wonder what happened to Senator Mike Young's bill to cut off the two recent CIB tax hikes after 10 years.  That's SB 90 and it seems to have cleared the Senate on a party line vote - Democrat Mark Stoops joined all Republicans in voting for the bill.  That was February 12.  On February 26 it was assigned to the House Ways & Means committee, where it appears lifeless.

Maybe the House will now find ample reason take action on this bill.  Its the least they can do to protect the public from paying taxes for frivolous items that will never benefit the community.

The CIB Is Working Hard For the Pacers

Time is tight for me today, so I will be sending you to read some good blogs arising from two IBJ articles on the CIB and its finances. Short story is that the CIB is crowing about how well it turned around its failed finances; so much so they are pulling a profit now and don't need the State's gracious offer for a $27 million loan at 5 % plus interest rate. All that despite the partially successful 'end times for downtown' campaign they waged all year to secure wads of money that at times added up to $50 million this year and another $50 million this year and every year going forward. A few short hours later the CIB is reported to be eyeballing that loan and talking about that $15 million gift per year, every year going forward, to the Simons and Pacers to run Conseco Fieldhouse. The Pacers already get 100% of all revenue from the Fieldhouse, but you know how hard it can be to pull a profit when you can't fill the seats for your home games because you picked players whose antics turned the community sour on your franchise.

Here are the originating IBJ article links:

http://www.ibj.com/cib-finances-improving-though-concerns-remain/PARAMS/article/11031

http://www.ibj.com/cib-may-accept-27-million-state-loan-after-all/PARAMS/article/11050

And the great blog entries by Paul Ogden and Gary Welsh:

http://www.ogdenonpolitics.com/2009/11/cib-likely-to-accept-27-million-loan.html

http://advanceindiana.blogspot.com/2009/11/cib-sees-surplus-but-will-still-borrow.html

Let me just add, all the seats for the Capital Improvement Board of Managers are ended January 15, 2010 -- this by the same legislation that allowed the City Council to increase the Hotel Tax by 1% to capture another $4 million a year and expand the Professional Sports Development Area to capture another $8 million a year, and offer the $9 million a year loan for three years from the state to the CIB. The same old people can be reappointed, but hopefully the appointing bodies will not be so lame in their decisions. Top of my list to be gone are Bob Grand, who represents the Pacers and has always had a clear conflict of interest, and Pat Early who has served on the CIB for nearly a generation and helped negotiate the original Conseco Fieldhouse contract and who has been the prime cheerleader for giving the ENTIRE store away to the Pacers, just like he voted for the ENTIRE store be given to the Colts.

All of this sudden burst of energy directed to the benefit of the Simons and the Pacers may be so that their work is done before a responsible Board takes their place. Well, I would hope a responsible Board takes their place. That awaits the list of appointees and some time for their ambitions to be assessed.

The CIB - An Example of Bad Government In Action

The Capital Improvements Board (CIB) budget shortfall is causing no shortage of outrage and angst in Indianapolis. For the purposes of this blog entry, lets not go into the merits of that debate. Rather, lets look at what the CIB illuminates in how really perverse and structurally unaccountable our government can get.

The CIB is classified as a Municipal Corporation tied to Indianapolis-Marion County government. It provides a political 'arms length' between the duly elected officials - the Mayor, the County Commissioners, and the City-County Councillors - and the decisions of the CIB. These elected officials all appoint members to serve on the CIB, but the Mayor gets 5 of the 9
CIB members and it is really his organization to steer. The CIB has the authority to float bonds and has done so, although they have also used the services of the Indianapolis Bond Bank for other bonds. Part of the CIB budget is reviewed by the City-County Council which must approve that part of the budget. The state law that set up the CIB gave it the authority to levy a property tax, with the prior approval of the City-County Council to do so. So far the CIB has not dipped into that well.

The supposed purpose of the CIB is to manage or operate the Indianapolis Convention Center, Victory Field (triple A Indianapolis Indians baseball team stadium), Conseco Fieldhouse (Pacers stadium), Lucas Oil Stadium (Colts), Capital Commons (a park between the Convention Center and the Statehouse), and a parking garage underneath Capital Commons.

The northern third of Capital Commons was donated by the CIB to Simons Property Group for their new World Headquarters in 2004, as part of a $23 million package of incentives approved by Mayor Bart Peterson and the City-County Council. The building is right across the street from the Indiana Statehouse. The Simons also own the Indiana Pacers.

The CIB manages and operates the facilities, but does not own them. The Indiana Stadium and Convention Building Authority (ISCBA) built and owns the new Lucas Oil Stadium and will build and own the pending expansion of the Convention Center. Both are leased by the ISCBA to the Indiana Office of Management and Budget (IOMB) which in turns subleases them to the CIB. In addition to the costs of the sublease, the CIB must pay the expenses of the IOMB - presumably only those connected to the stadium and convention center. The other facilities are owned by the Marion County Convention and Recreational Facilities Authority (MCCRFA) which also owns the ill-fated United Maintenance Facility on the grounds of the Indianapolis International Airport. The MCCRFA leases Victory Field, Conseco Fieldhouse, the existing part of hte Convention Center to the CIB. Again, the CIB pays for the expenses of the MCCRFA in addition to the lease payments.

The CIB negotiates and holds the contracts with the ball teams that play in the stadiums run by the CIB. Bob Grand is the current President of the CIB and he and his law firm, Barnes & Thornburg, represent the Simons and the Indiana Pacers. Joe Loftus, also a partner in Barnes & Thornburg, is a member of the board of the ISCBA. Barnes & Thornburg also represent the City of Indianapolis at the Indiana Statehouse.

Why is it so convoluted? Whether on purpose or not, the result is a Rube Goldberg device that makes accountability and transparency pretty much impossible.

The CIB collects taxes from a number of sources -- cigarette, innkeepers, food and beverage, admissions tax, car rental tax, and the sales taxes captured in a special district around the CIB's properties. The CIB must share a fixed percentage of the innkeepers tax revenue it receives with the Indiana Convention & Visitors Association (ICVA). The ICVA advertises the Convention and offers discounts on hotel space through its website, www.indy.org.

The much touted reason for keeping the CIB afloat is to keep the Indianapolis tourist and hospitality industry afloat. Oft repeated number is 66,000 service industry jobs. To that end, we not only find taxpayers funding stadiums, conventions centers, and advertising, but the City also has been quite generous with abatements and financing for hotels, and the Circle Center Mall was funded by carving out a TIF area. In addition to the players already mentioned, the City, through a variety of agencies, funds Indianapolis Downtown, Inc. (IDI) to the tune of about $1 million a year. Besides advertising and monitoring downtown office occupancy rates, IDI hires off duty police officers to patrol the mile square. What? IMPD can't do that? Guess not. The Metropolitan Development Commission waived a $6 million fine for the early sale of the Pan Am Plaza by the Indiana Sports Corp. (ISC) A lawsuit has been filed to recoup that money as modest payment for loss of precious downtown public open space.

The CIB has asked major investors of the Circle Center Mall project to forgive $34 million of the money they are owed for their loan of Mall profits to help build Conseco Fieldhouse. They are $20 million short for the annual operating costs of the Lucas Oil Stadium. They anticipate being $6 million in the hole for operating costs of the expanded Convention Center. They owe $17 million to the Indiana Treasurer for a loan so they could get out of some bad swap options. They need another $26 million to create a cash reserve for the repayment of bonds it holds. They are asking for $3 million more to give to the ICVA. And, they want to volunteer to take over the $15 million operating costs of the Conseco Fieldhouse now obligated to be paid by the Simons/Pacers.

The CIB has not been demonstrably successful. From 1998 through 2007 (the latest figures released by the CIB), the number of events held, the number of attendees, and the revenues generated at CIB managed properties has remained flat - despite a 2005 expansion of the Convention Center that increased floor space by one-third.

All these folks are busy busy busy. What never gets done, though, is an analysis of what it has cost the taxpayers to build this 'thriving' downtown and when, if ever, it will be successful enough to fund itself.

Let's talk.