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City makes $33.5M deal to keep Indiana Pacers

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The city has negotiated a short-term deal to keep the Indiana Pacers in Indianapolis, a pact that provides the franchise $33.5 million over three seasons.

That includes $10 million per year for Conseco Fieldhouse operating expenses. The city also agreed to provide at least $3.5 million but not more than $8.2 million for capital improvements at the nearly 11-year-old venue, according to a summary of the deal provided to IBJ.

The $10-million-a-year subsidy falls short of what the NBA franchise had sought. The Pacers had wanted the city’s Capital Improvement Board to take over $15 million in annual fieldhouse operating expenses.

The deal requires that the Pacers continue to play their home games in Conseco Fieldhouse for the next three years. It also stipulates that the team cannot terminate its 1999 fieldhouse lease during that time.

After three years, the team could leave if annual losses exceed $2 million, as already permitted under the 1999 agreement. But it would have to repay a portion of the $30 million, plus pay a multi-million-dollar lease-termination fee spelled out in the original lease. The portion of the $30 million the team would have to repay would decline annually until the lease expires in 2019. At that point, the team would not have to repay any of the subsidy.

Representatives of the city, which owns the arena, had been in negotiations with Pacers officials for months. Mayor Greg Ballard’s administration has scheduled a press conference for 2:30 p.m. Monday to formally unveil the agreement.

During negotiations, Pacers Sports & Entertainment—which is owned by retired real estate executive Herb Simon—contended it has been in the red every year but one since moving into Conseco Fieldhouse and could no longer afford to pay to operate the facility.

A CIB-commissioned study concluded that the Pacers along with the Indiana Fever contribute an estimated $55 million a year to the Indianapolis economy.

City officials had said they wanted to wait until the National Basketball Association and NBA Players Association work out a new collective-bargaining agreement before signing the Pacers to a long-term lease.
 
The collective bargaining agreement expires in June 2011, and the league’s owners and players union are just beginning negotiations.
 

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  • GOP at its Best
    This is nothing but another GOP move to make tax paying citizens pay the wealthiest fractional percent of society tribute money for being rich. No different than bailing out banks and insurance companies while the CEOs and upper management spend reap millions in wages plus bonuses, going on extravagant outings to gamble and visit sex clubs.

    The basketball team is good for the city, but at what price? When everyone in the city took big hits the last 30 months or more with the economy in shambles, how can the Pacers say they want more money to pay more high wages and bonuses? While at the same time, kids go without adequate schools and less teachers, basic services are cut back from libraries to police patrols, infrastructre goes unrepaired. Bottom line, this is a GOP agenda the pary of the rich, by the rich and for the rich.
  • Just close Conseco and Demo it
    Cancel the lease and make the Pacers pay a breakup fee and the Pacers can play in Lucas Oil Stadium just not on Sundays..... We do not need both facilities as we can afford them. what I am saying is sell the Lake house or 2nd home to solve your busdget problems.
  • unbelievable
    I wholeheartedly agree with ryan? Shameful indeed!! AND didn't they just build that darn stadium - how could they already need $3.5 (or, really $8.2 it looks like) of improvements?!?! Ridiculous.
    • Government Screws Up - Again!
      Once again, the few who control the purse strings make a business decision that no sane business person would make - i.e., investing (33.5 MILLION, no less) without REALLY knowing what is going on with the Pacers. If the Pacers want to ask for money - the ONLY way that ANY money would be available is after a FULL disclosure of their business.

      Any business that does business without doing their full due diligence is simply one that wastes money - how can the City know if they got a good deal? Because the 10M represents less than the 15 that the Pacers were asking for? What if they only "deserved" - if a Billionaire deserves anything - 2M - now the CITY has made a STUPID deal.

      If one business man can get another entity to invest money (stupidly and repeatedly) then I guess the old "whatever the market will bear" rule applies - so as long as the City of Indianapolis treats taxpayers' money like Monopoly money - then the Pacers will get a handout (bailout?) whenever they ask...

      Pity that those of us keeping the Simon family from losing the money they SHOULD lose can't get a gift...
    • HMMmmmM !!!!!!!
      HOW MUCH TAX REVENUE HAVE THE PACERS GENERATED OVER THE PAST 10 YEARS ? 33.5 MILLION ? AND HOW MANY TAX DOLLARS HAVE BEEN SPENT ON THERE BEHALF ?
    • So What?
      To those of us who don't go to see the "6th Placers" - and don't pay the ticket and parking prices - and don't patronize this mess -SO WHAT? Another waste. Another fiasco. Another "keep them here at any cost" triumph? for What? Delay extension for what bargaining agreement - they're not going to make profit, my friend - for anyone.
    • Two words
      Could Jim Morris at least say "thank you"?
    • A novel concept...
      putting a team out on the floor worthy of $33.5M from taxpayers...or it would be self-sufficient if the team was competitive. At what point do the Pacers owners take responsibility for mismanaging the franchise?
    • TAXPAYERS HELP
      MY BUSINESS NEEDS HELP, WHERE CAN I GO TO APPLY FOR THE TAXPAYER FUNDING? STRIP CLUB, GUN SLINGERS ON LAFAYETTE ROAD, GETTO BOYS WITH SMALL AUDIENCE. SELL THE SEATS FOR YOUR GAMES. LETS US USE OUR TAXES FOR SOMETHING IMPORTANT
    • WOW FACTOR
      Did the CIB confirm the PSE, Corp's losses before making this committment thru independent auditors? If not this is totally incompetent and without merit.

      If not what is the procedure to have CIB Board Members removed?

      Likely under the contract PSE could be due financial remuneration if the lease agreement contemplated a new Colts facility (Lucas)which would pull revenue away from Conseco and the PSE Corp... If no contract provision a deal is a deal unless FULL and FAIR DISCLOSURE of PSE CORP's financials is shown... That is how you may garner taxpayer support.

      If not this is taxation WITHOUT REPRESENTATION by some alter ego of City Government....
    • Waste of money
      Ryan is right. Libraries are closing, school programs slashed, teachers laid off, and the city finds $33.5 million plus for a sports team. What a waste. And that alleged $55 million to the Indy economy, is that net, gross, money to the city, what? As with the Colts, they throw these numbers out there with out any documentation or explanation, and we all are supposed to go OOHH! Our priorities are totally messed up.
    • Congrats
      This is good for the city. Makes sense to delay further extension until the bargaining agreement is settled. Btw -- Mayor's office doesn't oversee funding and hiring at schools. They're their own separate entity.
    • Shameful!!!
      Indy is laying off teachers and pledging $33.5 million! Disgraceful!

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