Pacers get first bite of $33.5 million pie

Jul 19, 2010 — The Indianapolis Star

Francesca Jarosz

Jul. 17, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- The Indiana Pacers received the first $10 million of their $33.5 million in taxpayer help to run and improve Conseco Fieldhouse on Friday.

The nine-member Capital Improvement Board, which manages the city's sports facilities and convention center, voted 6-1 to provide the support.

The Marion County Convention and Recreational Facilities Authority, which issues the CIB's debt, also signed off on the funding Friday. The City-County Council does not have to approve this year's funding because it's in the CIB's existing budget, but the council can control whether the board makes payments in 2011 and 2012 through the budgeting process.

Under the deal presented this week by Mayor Greg Ballard and CIB leaders, $10 million per year would help the Pacers, who have seen financial losses in recent years, offset operating costs at Conseco Fieldhouse. The CIB also would pay $3.5 million for capital improvements that could include things such as a new scoreboard and updated telephone systems.

In exchange, the Pacers must remain in Indianapolis until June 30, 2013. If the Pacers leave after that, the team would have to pay back part of the $30 million on a decreasing scale, on top of the city's estimated $20 million in termination fees in the existing contract.

CIB members Michael McQuillen and Jay Potesta could not vote because they were not at the meeting. Member Doug Brown voted against the deal because he wanted both sides to come to a long-term agreement.

The deal has been greeted with scathing criticism from some Indianapolis residents, who argue the city should not provide money to the team, particularly when government entities -- such as the libraries and the bus system -- are grappling with hard-hit budgets.

No one from the public showed up Friday to protest the vote or plan.

Leaders from economic development groups such as the Greater Indianapolis Chamber of Commerce and Indianapolis Downtown Inc. attended the meeting. They echoed the sentiment of Ballard and Pacers Sports and Entertainment President Jim Morris, who emphasized before the meeting the tangible and intangible economic benefits of the team.

A CIB-commissioned study showed that $55 million per year would be lost in economic activity, on top of 900 jobs and $17.8 million in tax revenue, if the team left.

"The impact of those numbers can't be ignored," Ballard said. "Indianapolis will remain a sports capital, which boosts our ability to recruit and retain employers."

Some sports economists, however, say teams' influence on a city is minimal because people who attend games would likely be spending their money elsewhere in the local economy if the team were not in town.

"There's a social and cultural, rather than an economic, return," said Andrew Zimbalist, an economics professor at Smith College who has written a book about the effect of sports teams and stadiums.

The CIB gets its money for the Pacers from taxes on things such as auto rentals, hotels, food and beverages.

On Friday, the board showed projections that it would end this year with a cash balance of more than $37 million after the Pacers payment, compared with $43 million in 2009.

The board will find the money by continuing budget cuts started last year and sustaining revenue increases that it began to see this year.

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