Economic Development and Sports Business

Convention, Colts issues in play: With gambling plan off table, stadium funding gets elusive

March 14, 2005

Whether it includes taxes on players' salaries, tickets and suite rentals remains to be seen. But early deliberations won't include revenue from gambling, according to Sen. Luke Kenley, R-Noblesville, who chairs the Senate Tax and Fiscal Policy Committee.

"There's not going to be any gambling included in the bill," Kenley said. "It's not going to be funded through slot machines or pull tabs."

Sen. President Pro Tem Robert Garton, R-Columbus, also said he'd oppose any measure including slot machines or pull tabs as was proposed by Indianapolis Mayor Bart Peterson, a Democrat. Other senators wouldn't take that possibility off the table.

"It's way too early to say any possibility is dead," said Sen. Lindel Hume, DPrinceton.

Hume, the ranking Democrat on the Tax and Fiscal Policy Committee, likely has a chip to play before this crapshoot is over.

"This is an economic development issue that's going to take a bipartisan effort," Hume said. "We're going to have to have some kind of cafeteria plan. A number of fund-raising measures will be needed."

Colts officials are especially concerned about measures that include taxes on tickets and suite leases as well as players' salaries, said team spokeswoman Myra Borshoff. House Bill 1846, which died in the House Democrats' vote boycott March 2, included a $10 ticket tax and 2-percent player payroll tax to help raise the $44 million annually needed to pay off the $625 million retractable-roof stadium.

The House measure also included a tax on luxury suites and tax increases on Marion County hotel stays and car rentals, and on riverboat casinos.

Whatever happens this week probably is just the prelude to fourth-quarter fireworks.

"This measure will probably get done in the budget bill, probably at the 11th hour," said Ed Feigenbaum, publisher of Indiana Legislative Insight. "The House-Senate conference committee is where the real work will get done. They'll go through this line by line. There will be plenty of negotiations and it could be highly politicized."

But Feigenbaum said a precedent was set when then-Republican Mayor Steve Goldsmith, and then-Democratic Gov. Frank O'Bannon worked together to form a funding plan for Conseco Fieldhouse. Both Peterson and Republican Gov. Mitch Daniels favor funding the Colts' new facility and the Convention Center expansion.

"I don't see many lawmakers saying, 'Let's let the Colts walk,'" Feigenbaum said.

That doesn't mean opinions won't vary on funding.

"It's not a free ride for lawmakers," Feigenbaum said, adding that Republican lawmakers will be eager to see Peterson, the Democrats' rising star, "pay a toll by making him raise taxes locally," to get this done.

"Everybody wants to support this, but nobody wants to pay for it," said Kenley, who wouldn't reveal details of the bill. "We have to get real and come up with a sensible measure. We have to face this head on."

Though Hume said his constituents will see little benefit from the new stadium and Indiana Convention Center expansion-that will cost an additional $275 million-he thinks it's an important regional economic development initiative nonetheless.

"I look at it in terms of jobs created, and it's significant," Hume said. "We need to address it much the same way we did when we looked at bringing Toyota into my district."

Kenley said Colts owner Jim Irsay or other top franchise executives need to be included in conversations. Borshoff said Irsay was not available to address the matter and Colts President Bill Polian did not return calls seeking comment.

Colts officials aren't the only ones concerned with certain funding solutions being proposed-especially the ticket tax.

"The tickets are already too high for many of my constituents," said Sen. Billie Breaux, D-Indianapolis. "Why have a team if the average citizen can't afford to go?"

Though Breaux said she doesn't like the ticket tax, it would not keep her from voting for a funding package.

"There's a lot of interest in this within the Senate leadership on both sides, so I don't think it's going to die this session," said Breaux, member of the Senate Appropriations Committee. "The issue of slot machines probably is dead and I'm sorry to see that because I think it's a good regional solution."

Sources close to the Colts said while the tax on players' salaries and suite leases is troublesome, it's the $10 ticket tax that is the potential show-stopper.

"The $10 ticket surcharge by its magnitude is highly unusual," said Marc Ganis, president of Chicago-based Sportscorp Ltd.

Ganis, a consultant who has worked for numerous NFL teams and playing venue operators, said a $10 tax would be the highest-by far-in the NFL.

"A ticket tax to help pay for a venue is not unheard of, but it's usually a buck or a buck-and-a-half," Ganis said. "I can't imagine Jim Irsay is going to stand by and let that pass."

Industry observers said such a hefty fee would kill the Colts' efforts to maintain several thousand $10 and $20 seats, and could erode the fan base. In years when the team isn't contending for the Super Bowl, Ganis said, the Colts could easily have problems selling out the enlarged venue, which would lead to TV blackouts-cutting much-sought-after exposure for the city and Colts.

"A ticket tax is a tax on the team; that's what people forget," said Mark Rosentraub, former dean at IUPUI and author of "Major League Losers," a book about professional sports operations. "In economic theory, the Colts will charge the price the market will bear, regardless of a tax. Make no mistake, this is a tax on the team, and a pretty heavy one."

The Colts have already agreed to pay $100 million into the effort and are asking for no monetary backing once the stadium is built. But state lawmakers indicated more might be asked of the Colts.

"I don't know if Irsay has ponied up enough, if the NFL has ponied up enough, what the city is going to contribute," said Sen. Robert Meeks, RLaGrange. "The state is not going to pay for the whole thing."
Source: XMLAr00100.xml
ADVERTISEMENT

Recent Articles by Anthony Schoettle

Comments powered by Disqus