Tuesday, January 27, 2009

CIB Plans to Seek Money From Indiana General Assembly to Cover Losses

I had the opportunity to watch the video of today's Capital Improvement Board meeting tonight. The subject was an outlining of the financial "challenges" faced by the CIB. Challenges is a kind word. It is apparent that the CIB is deeply in debt and the situation has grown much worse over the past year. Presently the operating deficit of the CIB is $25.3 million dollars. With the plan to shoulder more of the Conseco operating cost from the Pacers and other plans, the operating deficit of the CIB is expected to rise to $43.3 million dollars. That is before you even get into the debt-related costs which amount to $77 million. Cash reserves for the CIB have dropped by more than 25% the past year and with operating costs increasing dramatically, those reserves may be wiped out completely in the next year or so. It is unquestioned that the amount of debt serviced by CIB will have to increase substantially.

During the meeting former City Controller Ann Lathrop, who did the presentation reviewing the CIB fiscal situation, indicated that the CIB will be asking for help from a "legislative body." That means the Indiana General Assembly. She also built into her future calculations of operating costs. assumption that the CIB will take over from the Pacers $15 million more of the the cost of operating Conseco Fieldhouse. It appeared from the discussion that it is already a "done deal" to give more money to the Pacers.

CIB Chairman Bob Grand told Indianapolis Star reporter Brendan O'Shaughnessey that he has no plans to ask that Colts owner Jim Irsay renegotiate the overly generous deal that dramatically increased the value of the Colts' franchise and left the CIB with an enormous operating deficit. Disingenuously Grand suggests that reviewing grants given to the the arts would be an alternative to asking for concessions from the Colts. While the CIB has no business contributing money to the arts to begin with, the kind of numbers involved in giving to the arts and the money going into Bob Irsay's pocket is not remotely comparable.

The Simon brothers who own the Pacers are clients of Bob Grand. As noted by Advance Indiana, Grand has already violated his promise to recuse himself from discussions regarding the Pacers' future. Given that the interests of the Simons' Pacers are so intertwined with the CIB, chaired by Grand, it was never a conflict that reastically could have been avoided by recusal anyway. The ethically-challenged Grand has amply shown over the past year he lacks the competence to run the CIB. Mayor Ballard should demand his resignation.

To summarize, CIB is deeply in debt and has a huge operating deficit that is getting much larger. Even though CIB gave the Colts a sweetheart deal that has allowed Irsay to become fabulously wealthy, the CIB won't ask for a renegotiation of that deal. Oh, and the CIB plans to give the Pacers more money. CIB is also going to the Indiana General Assembly and ask that it be bailed out of the mess it created. Meanwhile, there is absolutely no consideration by the CIB for the taxpayers who are footing the bill.

Today the Star reported today that Indiana unemployment rate jumped by a full percentage point to 8.1% and experts believe it will hit double figures in 2010. (I'm guessing the fall of 2009.) Nonetheless, the CIB has sent a clear message that it intends to continue with the corporate welfare that is the tradition of Indianapolis city leaders. But in the background you are hearing the rumbling of angry taxpayers, the same taxpayers who elected Mayor Ballard and may well take him out in 2011. If CIB members think they can dig even deeper into taxpayers' pockets to give more money to millionaire sports owners without a fight, they are going to be in for quite a surprise.


Anonymous said...

Uh oh! "Mary Jo" is NOT going to like this one.

Leslie Sourwine said...

Sorry Anon, I busted a gut when I saw your post. Thanks for the little bit of humor! We need it at times like this when we aren't sure which level of government is going to have their hands in our pockets or how much they will pull out. Jean Houston says "At the height of laughter, the universe is flung into a kaleidoscope of new possibilities."

Leslie Sourwine says, maybe this payday we will be the ones with the bonuses?

Downtown Indy said...

Isn't it interesting that no matter how bad the economy is, no matter how many workers are out of a job, we still 'need' professional sports?

Paul K. Ogden said...

Downtown, I've always said that professional sports are pricing themselves out of the family's entertainment budget.

I have a brother who lives in Atlanta. He does very well, lives in a huge house in an affluent suburb. Definitely well up in the upper-middle class range. He told me that he couldn't afford to take his three boys to a Hawks basketball game. He said the tickets, the parking, the concessions, etc. were just too much for him financially. And that was several years ago, before tickets have gone up to where they are today.

The day is rapidly coming when professional sports teams are going to have to start slashing their ticket prices to get fans in the door.

Paul K. Ogden said...

Wadda I say wrong, Anon 2:40 a.m.?

Hey, I'm just the little kid pointing out what everyone else knows is true but is too afraid to to say, namely that the Emporer has no clothes.

Gary R. Welsh said...

Paul, Wait for the season ticket renewals. The financial turmoil will appear there. They're showing up everywhere. As of a week ago, you could still buy tickets to this year's Daytona 500. Ticket sales to the 2009 Indy 500 have plummeted. Many businesses are so hard pressed right now, and one of the first things they'll drop is their sports tickets. A disproportionate amount of the ticket sales to professional sporting events is represented by businesses.

Anonymous said...

You didn't say anything wrong, Paul. I was trying to add a little humor to the outrageous situation. I don't believe for a minute that "Mary Jo" is a woman. I think "Mary Jo" is a B&T attorney.

Keep up the good work, Paul! I'm your number #1 fan.

Paul K. Ogden said...

Anon 9:52, I figured you were just making a joke. Actually I missed the Mary Jo comment though. I'm getting so many, it's hard to keep track.

Anonymous said...

It is outrageous that Grand and Early have already caved into matching the stupidity of the Fred Glass/Colts deal by having taxpayers take all operating costs while giving all the profits to the team owners.

They have a $20 million ANNUAL operating hole with Lucas Oil and now they want to add at least another $15 million ANNUALLY from Conseco because the Simon's want the same deal.

If taxpayers are paying most of the team expenses, then they should own the teams.