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Sports Business

Colts' Irsay touches hot button with hotel issue

May 1, 2012
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The city of Indianapolis and its tourism and convention people have a problem. And it might be more immediate than it seems.

Here’s a news flash: The Super Bowl isn’t coming back to Indianapolis unless another big, posh hotel is built downtown.

That may be news to local citizens, but it’s not news (or it shouldn't be) to the mayor and the folks at the Indianapolis Convention and Visitors Association. And it’s not news to Indianapolis Colts owner Jim Irsay.

I’m sure the honchos in the NFL’s ivory tower in New York will bristle at that notion. Problem is, they don’t have a say on where the Super Bowl is played. The 32 team owners do.

And nobody locally has a finger on their pulse like Irsay. After all, he’s one of them. So Irsay tweets that the city needs another big downtown hotel to land another Super Bowl and takes a bunch of arrows for his assertion.

Then, this morning, he clarifies his earlier tweet with this: “When I went to r SupBowl Com. Meeting, which I'm on, feedback was extremely positive ... the “hotels” comment wasn't my observation. It was others.”

I cleaned up Irsay’s grammar just a little, by adding a period here and a space there. But the wording is exact.

So who are these “others?” You don’t have to be Irsay or part of the NFL’s Billionaire Joy Luck Club to know what and who he’s talking about. They are the only “others” that matter. They’re the NFL owners.

After spending a week in the Super Bowl media room talking with myriad NFL insiders and a few team owners it became clear to even me that the 32 people who matter most more than want another hotel in downtown Indianapolis, they’ll insist on one before bringing their precious Super Bowl back to the Circle City.

If Indianapolis decides not to build another major downtown hotel, the NFL will simply take all our best ideas—the Super Bowl Village, zip line and centralized party zone—and ship the game to cities willing to meet their demands.

After attending the 2011 Super Bowl in Dallas—where media, fans and NFL officials were spread all over creation—I’m not quite sure what the gripe with Indianapolis’ hotel situation is.

Nevertheless, the NFL owners hold all the cards. Irsay understands that as do Indianapolis leaders.

But ICVA CEO Leonard Hoops realizes too you don’t build a church for Easter Sunday. Well, unless the Easter collection is enough to support the church and its building year-round. With an economic impact north of $300 million, it takes a big collection basket to hold all the Super Bowl's bounty. And who knows, you might attract some new worshippers with that big, fancy church.

Hoops’ predecessor Don Welsh said downtown would need a big, new hotel by 2015 despite the opening of the 1,005-room JW Marriott in 2011. I suspect he said that for folks like NFL owners and big convention planners as much as anyone. Welsh feared that the appearance of standing static might send big-time event planners scurrying in another direction. And Welsh, who has since departed for Chicago, was certainly a big-game hunter.

Hoops is more conservative, saying he’d like downtown hotel occupancy to consistently post above 70 percent before starting a new hotel project. Although rates in 2012 might end up in the 70s, Hoops said, “it will be skewed from this year’s Super Bowl.”

In 2011, downtown hotel occupancy was 66.4 percent. It surprised many hoteliers that the occupancy rate increased from 65.3 percent in 2010 despite the JW’s opening.

But it’s a delicate balance, and most hoteliers right now think another big downtown hotel would tip the scales in the wrong direction. Welsh would argue that if you build it, they will come—and the JW is the proof.

Suburban hotels, which had 57.5 percent occupancy in 2011, might feel an even bigger impact as more business is flushed downtown. But I’m not sure the numbers back that up. Their occupancy rate in 2010—the year before the JW opened—was 54.8 percent.

There’s a small handful of downtown parcels that could be the site of downtown’s next mega-hotel. The Pan Am Plaza is chief among those, and its future development is controlled by commercial real estate developer Kite Realty Group Trust, which was responsible for the ritzy Conrad Indianapolis. They’ve been mum on their plans for the property.

A new hotel on the site will almost certainly require some serious infrastructure cooperation—and perhaps even some kind of financial support—from the city.

So what is Indianapolis to do? Is it time for a conservative approach, a prevent defense of sorts? Or an all-out blitz? It’s a difficult question.

This much is certain. For a big hotel, it would take about three years from conception to ribbon cutting.

Any Super Bowl bid without such a hotel would have about as much chance at succeeding as a team led by Curtis Painter.

The clock is ticking.

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