Economy and Economic Development and Sports Business

Growing convention business creates tough decisions: Mayor outlines possible solution for expanding center and adding stadium, but funding battle looms ahead

January 3, 2005

Consider Indianapolis a victim of its own success. The city's efforts to make a name for itself as a convention destination have worked-almost too well.

The Indiana Convention Center is at capacity with 40 major events a year, and two of its biggest customers are moving to roomier digs.

What began as a "what if" discussion about adding space to accommodate more business has turned into a "must do" conversation about keeping what's already here.

"That's what really drove it home to me," Mayor Bart Peterson said, "when I saw real money leaving the city."

But the answer isn't as simple as bringing in the heavy equipment and throwing together some more exhibit space. Expanding the landlocked convention center will be difficult.

Members of the Capital Improvement Board, which owns the center and other municipal property, studied the issue for years before settling on an option that complicates the matter even more: The best place for an expansion, they argue, is the current site of the RCA Dome.

CIB President Fred Glass said the group worked diligently to find another solution, but ultimately determined that replacing the dome would resolve a number of issues-including keeping the Indianapolis Colts committed to Indianapolis and securing the NCAA Final Four basketball tournament well into the future.

To that end, city leaders unveiled a much-anticipated proposal late last year: Spend $900 million to expand the convention center and build a retractable-roof stadium that would accommodate the Colts, NCAA and countless other events.

Calling it "vitally important" to economic development, Peterson said the project would provide a $2.3 billion boost to the Indianapolis economy over the next 10 years.

Months of groundwork earned the plan early support. Most of the discussion, after details were released, focused on how the construction would be financed, not why it should be approved.

The mayor proposed a two-part funding package.

Increases in Marion County hotel, car rental and admissions taxes would provide most of the revenue for the $275 million convention center expansion; more would come from the city's professional sports development area.

Pull-tab gambling machines would generate the bulk of the money to pay for the $500 million stadium and $125 million in related costs; the Indianapolis Colts would contribute $100 million, more than twice what the team will get from the city to break its existing lease at the RCA Dome.

But hurdles remain, starting with the Indiana General Assembly.

Any tax increase would require the approval of the Republican-led Legislature-and the new governor-before the issue even gets to the City-County Council.

The pull-tab component may be even more daunting, considering the machines are not yet legal and an effort to authorize them last year failed.

But Peterson said he is not discouraged.

"I recognize that there are really only 180 people who will decide the fate of this-150 legislators, the governor and 29 City-County councilors," he said. "We have a much more focused audience now."

And he's open to other options for funding, if anyone has a better idea. He said the economic benefits will outweigh the costs.

In the past, "the Legislature has done what it has taken to help keep the economy and state moving forward," he said. "I believe it will be successful. But I don't believe it will be easy."
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