Friday, July 24, 2009

The CIB Taxpayer Bailout Tour Comes to Pike Township

Last night the Capital Improvement Board Taxpayer Bailout Tour, featuring CIB Executive Director Barney Levengood, CIB Board Member Dorothy Henry and Warren Wilkerson Senior VP of the Indianapolis Convention & Visitor's Association came calling to Pike Township.

Councilor Mike Speedy and Jose Evans should be commended for putting on the meeting. They truly seem interested in public input and did not appear to be pushing either side. They allowed for open discussion, even yours truly who had made some rather pointed comments.

The meeting started with each of the panelists making opening remarks. Then Warren Wilkerson of the ICVA gave a presentation that included a video that talked about how Indianapolis was an empty hole before all these great downtown sports and convention buildings arrived. He continued to peddle the same phony numbers such as the 66,000 plus hospitality workers (who make $1.9 billiion in wages) that supposedly would lose their jobs if the bailout doesn't go through. That figure includes workers who work nowhere near downtown including outside of Marion County. It is a central Indiana figure.

My favorite phony number was that Lucas Oil Stadium is booked with events for 69 days a year. What they are doing is counting ANY event at the facility in that figure. This includes small meetings that take place in side rooms Lucas Oil Stadium. Those meetings could have been held anywhere. Nonetheless, I find it disturbing that a facility of that size is being used only 69 days out of 365.

The purpose of Wilkerson's presentation was not only to ask for the bailout but to also ask for more money for the ICVA to market the new convention center and promote the city. I thought to myself, isn't that the reason the City hands a $1 million subsidy every year to Indianapolis Downtown, Inc., a non-profit corporation set up to promote the city? As I revealed on these pages, much of that subsidy gets swallowed up by IDI in administrative costs, including paying IDI's officer excessive salaries and benefits. But the ICVA is no better on that score. According to ICVA's latest tax return the organization pays out salaries and benefits of $5,108,763 to its officers and employees. These include former President and CEO Robert Bedell who pulled in $353,777. According to the return, ICVA also has $495,854 in mutual funds and $1,053,413 in equity securities.

During the meeting, the issue of the CIB picking up the $15 million in operating costs on Conseco Fieldhouse was brought up by yours truly. Councilor Mike Speedy seemed to believe the issue was no longer on the table and he posed a question in that regard. Levengood ducked question. Dorothy Henry ducked the question. The audience though was persistent. Pike Township Assessor Lulu Patton asked Levengood what the exact deficit of the CIB is and how the Board got to that point. After initially ducking the question, Levengood finally returned to the line that the deficit is $47 million and his itemization included the $15 million to the Pacers.

Later in an exchange with me Levengood defended the $15 million by saying that if the Pacers were not in Conseco Fieldhouse, all the tax revenue the team generates would not be captured by the Sports Development district which goes to Indianapolis instead of the state. That though assumes that if the Pacers vacated that building would no longer produce any revenue. But right now the Pacers get all the revenue from the building and they are asking the CIB, i.e. taxpayers, to pick up all their operating costs on the building.

Nonetheless, it is a moot point. The Pacers would have to pay the city a hefty ($50 million to $125 million penalty) for getting out of its 20 year contract at the 10 year point this fall. They aren't going to do it. The Simons, the owners of the Pacers have no leverage to force the CIB to pick up these operating costs for at least 10 more years. Why do it in the midst of this financial crisis.

I should point out that the CIB has never taken a vote on the $15 million annual gift to the Simons. Yet it is taken for granted that this is something the CIB is going to do. This again highlights the terrible conflict of having Bob Grand, whose law firm represents the Simons and the Pacers, head up the Capital Improvement Board.

During the meeting a comment was made by someone in the audience that the taxes were okay, if the CIB learned its lesson and this did not happen again. That's the problem. Despite this financial crisis, no one in leadership has demanded changes in the way the CIB does business. All your doing is flushing more taxpayer money down the black hole that is the CIB.

It is time for a new board, it is time for accountability. Throwing more taxpayer money at professional sports giveaways, is not the answer. The best thing is if the CIB were authorized to file Chapter 9 bankruptcy so that at the least the CIB had the leverage, even pre-bankruptcy, to renegotiate these pro sports contracts so the CIB can capture more of the revenue it has given away, money that has made the Colts in particular one of the wealthiest franchises in the NFL. The CIB can also use bankrtupcy to renegotiate the debt load that is choking the Board or use bankrtupcy to discharge part of it. Bankruptcy though comes with a caveat though. If the CIB simply goes back to its historic giveaway philosophy, the Board will be back in the red in no time. The Board has to change. We need to make sure this fiasco that the CIB bailout represents, never happens again.

9 comments:

jabberdoodle said...

Thanks for the update Paul. One small correction - Barney Levengood is Executive Director of the Convention Center, who runs all of the CIB's business. Poor Barney only brings home $18,000 a month.

There absolutely needs to be an examination of what got us to this bleak place and changes made directly upon that knowledge to prevent this fiasco from returning.

One must also note that Mayor Ballard considers all of this largesse as insufficient. Then, there is the little issue of two more tax increases awaiting the Council in 2013 - increases that will be required if the CIB starts taking the $9M per year loans from the State. More hole to dig out of.

Paul K. Ogden said...

Jabber, the reports I've seen have Barney Levengood asexecutive director of the CIB, not the ICVA. Welsh heads up the ICVA.
For example:

http://www.wthr.com/global/story.asp?s=9814850

There does seem an awful chummy relationship between the CIB and ICVA though. Too chummy.

Paul K. Ogden said...

Okay, looking back Ihad him as ICVA executive director. He's CIB executive director. Yesh he is the one who runs the day to day operations of the CIB.

HOOSIERS FOR FAIR TAX said...

IRRITATE & CONTROL PARTY BOSSES 101

Come to the CIB bailout public hearing on Tuesday night (7/28/2009) at City Hall on Market Street across from the City Market. It starts at 5:30 pm in room 260. The meeting is being held by the committee looking at the bailout proposal.

It's already leaked that several city councilors are against the bailout. Those good guys on the council need our public support and encouragement.

Sign up to speak (they usually give you 2 minutes) and let it be known that the prudent thing to do is to order a forensic audit of the CIB that has operated in near secrecy with our money for at least a decade.

Thanks to relentless bloggers like Gary Welsh and Paul Ogden, everything is set up for the party bosses to fail to get their bailout money for their sports billionaire legal clients and/or campaign contributors. All we need is for citizens to show up to give the final punch that knocks down their game.

Signs to bring:
AUDIT THE CIB
NO CIB BAILOUT
BOB GRAND OLD PARTY

Never forget that the biggest fear of the party bosses is public exposure.

Indy Student said...

I know the Mayor's Town Hall meetings are online. Is there video of this somewhere?

Paul K. Ogden said...

Indy Student, I did not see anyone taking video of the event.

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