Thursday, April 23, 2009

Legislative To Do List: Authorize the CIB to File Bankruptcy

The Indiana General Assembly is officially less than one week from concluding. There is one thing that the legislature conferees need to do - put into HB 1604, the budget bill, or some other bill an amendment to IC 36-10-9-6 (the powers of the Capital Improvement Board) that would authorize the filing of bankruptcy by the CIB.

Regardless of the whether that power is ever exercised, the Pacers and Colts need to know that is an option at the disposal of the CIB. That would send a clear, undeniable message to the professional sports teams, giving the CIB enormous clout to revisit the sweetheart deals the teams received. It would force the Colts and Pacers back to the bargaining table to help the CIB close the funding gap. The Pacers' extra $15 million needs to come off the table, and the Colts need to help close at least $20 million of the gap.

Unfortunately, given that the the CIB has historically played Santa Claus when it comes to giving away taxpayer money, I'm not sure Bob Grand and Company are capable of being hard-nosed negotiators. That's why in conjunction with the bankruptcy authorization, the Mayor would be wise to ask for the resignations of everyone on the CIB. A new CIB Sheriff in town, armed with a bankruptcy authorization, would quickly wipe the smirk off the Colts and Pacers' faces and force them into concessions.

Negotiations are all about leverage. It's time the Indiana General Assembly gives the CIB leverage that will not cost the taxpayers a dime.


hoosier reader said...

Please explain the relationship between a debtor and the kinds of creditors (owners, stockholders, bondholders, partners, contract-
ors, etc.) and types of available bankruptcies in the CIB situation,
i.e. Ch 9, municipality,or a Ch 11, business. There are advant-
ages and disadvantages to the CIB
aren't there? what would they be?

Am I mistaken in my impression
that the people deeply involved
in this mess, i. e. businessmen and lawyers are very skittish about the the CIB using a busi-
ness legal remedy, i.e. Federal bankruptcy? Why? They seem not eager not to consider, explore
discuss options here, just give away tax dollars. If the much vaunted and popular business model of government and private business were a truepartnership, then the partners would share the profits and suffer the losses together. The present CIB business model arrangement is not a partnership, it is a quasi-private business with money problems, one that the government should not be running.
Face it, the government got into this mess because entrepreneurs
lacked the necessary venture cap-
to build venues and facilities.
A businessman may have a heck of an idea, but if he is mot able to get bank loans or venture capital to realize his idea why should he expect the government (taxpayers) help him do so?

The CIB has got to organize and operate its facilities and venues
in a business like manner. It must simply consider all of available options. The only ones I keep hear-
ing about are cutting expenses and investing still more capital to preserve the initial investment and shore up a business model that has run into hard economic times.

Downtown Indy said...

What 'authorization' is needed? I don't understand. There's some statutory prohibition currently? I don't see why there'd be language in the Colts lease about what to do in the event the CIB is declared insolvent.

Does this mean currently the CIB can go as far into debt as they can take it and there's no 'out' available to stop or reverse them?