Now suddenly, on the eve of what might be a stinging defeat to raise the hotel tax to 10%, the highest in the country, the Ballard administration announces that the projected $12 million deficit after their planned tax increases and additional borrowing, would actually only be $5 million. The Indianapolis Business Journal, described it as a "mystery" how the CIB cut out $7 million of the deficit since the close of the special session. Scott Olson of the IBJ reports:
Wait a second...look at the highlighted text in the Olson article, which I restate "The organization also expects to absorb $15 million next year in Fieldhouse operating costs." Leading up to the Rules Committee meeting and at the meeting, councilors were telling the public that the CIB had taken the $15 million to the Pacers off the table. Chairman Robert Lutz at the meeting even corrected speaker Sean Shepard that the $15 million was no longer being considered when Sean started to address it during his speech.
The beleaguered Indianapolis Capital Improvement Board has whittled its anticipated 2010 deficit of $47 million to only $5 million. But how it slashed $7 million since the end of the Legislative special session and how it proposes to close the final gap are a mystery.
Paul Okeson, chief of staff for Mayor Greg Ballard, said the CIB rebid some of its contracts but reiterated that “everything is on the table.”CIB President Bob Grand could not be reached this morning for comment.
The CIB, which manages the city’s professional sports facilities and the Indiana Convention Center, has struggled much of the year to close the projected deficit.
The not-for-profit faces a shortfall largely due to the additional $20 million required annually to operate Lucas Oil Stadium, which is much larger than the RCA Dome it replaced. The organization also expects to absorb $15 million next year in Fieldhouse operating costs.
The CIB meets Monday to consider next-year’s budget, after taking a one-month sabbatical while state lawmakers attempted to help solve its financial crisis.
Besides approval of the 2010 budget, the CIB lists “financial update and borrowing resolution” and “security contracts — extension & saving” among agenda items for Monday’s meeting.At the last CIB meeting in June, Grand said members already “have cut into the bone” but acknowledged that it’s possible to lop more from the budget.
Also Monday, the City-County Council is expected to approve a provision made by the General Assembly to raise the local hotel tax from 9 percent to 10 percent, which would generate roughly $4 million annually.
Tied to approval is $8 million in funding the city expects to capture by expanding the Professional Sports Development Area to include sales taxes generated at the new J.W. Marriott hotel on the western edge of downtown.
“We’ve got to focus on getting through Monday, on the full Council vote to pass the innkeeper’s tax,” Okeson said.
After the meeting, I wrote that the council members were being played, that the CIB had no intention of taking the $15 million to the Pacers off the table. Well, guess what folks? It's back. Council President Bob Cockrum and Councilor Lutz should be outraged because they personally went out on a limb assuring the public that the $15 million had been taken off the table when it was not. They were played for suckers by the CIB.
Let's recap. So as part of the bailout the CIB plans to make taxpayers pay $15 million more a year to pick up the operating costs on Conseco Fieldhouse, a building on which the Pacers Sports and Entertainment Group get 100% of the profit. The CIB, without so much as taking a vote, while deeply in debt, cut a behind closed doors deal to do this for the billionaire Simons brothers, even though the Pacers have 10 more years on their contract and they would have to pay $50 to $125 million to break the lease early. Translation: the Simons have no leverage whatsoever to demand that the CIB cough up $15 million more for the Pacers for at least another 10 year. Now are we still supposed to believe there is no conflict of interest with the attorney for the Simons, Bob Grand, being President of the CIB?
At least with Lucas Oil Stadium, the CIB gets 1/2 the revenue on non-Colts events while paying al the operating costs. At Conseco, if the CIB has its way, it will get 0% of the revenue while paying to operate the building.
The folks at the CIB have not learned their lesson from the Lucas Oil Stadium fiasco and do not deserve another dime of taxpayer money. The council should vote "No" on Monday.