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UPDATE: City reaches $160M deal with Pacers

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The city's Capital Improvement Board will spend $160 million over 10 years on subsidy payments and stadium improvements for the Indiana Pacers in exchange for a lease extension through the 2023-2024 season.

The pact, which includes up to three one-year-extensions, calls for the Pacers to create a separate entity to operate Bankers Life Fieldhouse. The CIB would subsidize the new entity to the tune of at least $10.8 million per year.

That breaks down to $3.7 million for direct operating expenses and $7.1 million for "operating reimbursement" payments, according to a CIB board presentation obtained by IBJ. The $7.1 million figure would rise by 3 percent each year over the course of the deal.

The CIB also would provide $26.5 million for improvements to Bankers Life Fieldhouse's locker rooms, concession stands and video boards, and another $7 million for capital replacement items including new carpet. About half of those improvements would be completed in 2014.

The agreement also sets up a process for the CIB to provide financing assistance to the heirs of team owner Herb Simon, 79, should they have trouble securing financing upon Simon's death. The CIB board presentation says "we understand that Mr. Simon's heirs will take control of the team per his will and trust agreements," but it provides no details.

The CIB would have 15 months to help the team find financing and would be entitled to a right of first offer in the event of a sale.

The CIB has been providing large annual subsidies to the Pacers since 2010, when it agreed to provide $33.5 million over three seasons to offset losses from operating the fieldhouse. Last year, CIB agreed to provide another $11 million under a one-year extension.

The board presentation reviewed by IBJ says that, unlike prior agreements, the new pact does not allow the Pacers to use financial losses as a justifcation for relocating the team.

Pacers and CIB officials have scheduled a press conference for 10:30 a.m. Monday to discuss the deal. It is expected to be approved at the CIB's board meeting that afternoon.

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  • So then, why?
    Just curious. If this is such a bad deal, then why would other cities -- especially those where teams were based, and then relocated -- be so willing to spend so much to get them back? When you look at what Seattle would do for an NBA team, what OKC did after they hosted the displaced New Orleans team, what Sacramento did to keep the Kings, what LA is preparing to do to lure an NFL team, how Kansas City has lost the NCAA HQ and even convention business with no NBA team playing downtown...I guess everyone in those cities is dumber than Indy since they're willing to pay even more? Or, perhaps, after LOSING a franchise they realize the worth it has to the city? Why would anyone want to put our city in that perilous position?
  • Convention Center
    There are plenty of cities with nice restaurants and pricey hotels that have not given more than a billion dollars to billionaires. Further, the convention center does way more to bring in outf-state tourists and keep those downtown businesses thriving than LOS and BFH combined. If the Simons and Irsays had an iota of honesty they would admit that owning a sports team is a passion rather than a get-rich venture and they'd stop plundering the city. If we have to continually buy their loyalty and commitment to the community I'd rather pass.
    • Battle of wits with unarmed opponents
      AMEN ! to that !!
    • jEvidence
      Brandon, this is an a discussion for logic and there seems to be a great lack of logic ! I will try one more time on simple terms for simple people ! What does this have to do with the Simon family who have given more to this city in more ways that you or anyone in this, so called, discussion can dream. If you are looking for your "ROI" maybe you should drive to downtown Indianapolis and get out from what ever rock you people live. The investment has nothing to do with the Simon family or the Irsay family but every thing to do with the JW Mariott, Crowne Plaza, Hyatt Regency, the Omni Severin, St. Elmo's, Morton's, Buca di Beppo, Granite City Food & Brewery, Fogo de Chao, Circle Center Mall !!!! Wake up people this has NOTHING to do with the sports teams but EVERYTHING to do with the Great City of Indianapolis !!!
      • Evidence
        If giving the Irsay's and Simons' more than $1B combined dollars is such a great deal, where is the evidence that explains this to rubes like me? If it were such a great deal the parties would promote these facts and figures far and wide. The fact is that they cannot do this. What is the ROI of this investment - other than we keep the Pacers for 10 more years? Imagine the vibrant city we could have if we spread a billion dollars across essential services and quality of life projects across the city (rather than in 1 square mile) that attracted tourists and caused incidental spending on items other than beer and sandwiches.
        • Battle of wits with unarmed opponents
          If the City of Indianapolis had a Golden Goose, there would be commenters here outraged about the cost of poultry feed.
          • Grass is always greener
            For all of you who disagree with the CIB's decision I respect your right to say so. What is clear however is that none of you understand the economic engine for downtown that LOS and Bankers Life create. Many businesses and jobs rely on the activities at these facilities. To say this money is going in the Simon's pocket is just about the dumbest thing I have read in a while.
          • Taxes
            Italino... That is part of the problem. They designate these tourist taxes for the stadiums and sports teams. You should be able to have community spirit without subsidizing the rich. The Simons have no problem paying their own way. As for the CIB, there just a rubber stamp. I don't know when or how this contract was negotiated, but wouldn't it be nice if just once the taxpayers had a say.
          • Balderdash
            Realize the Simons make all the profit off of every event, concerts, etc. in the Fieldhouse and they have no expenses. This highway robbery at its worst. One wonders what goes on behind the scenes with all of this money because the Simons sure don't seem to have any trouble getting those in power to fleece the taxpayers of Indianapolis.
            • Championship
              Humorless commenters need to simmer down and learn how to detect snark.
            • Cronyism
              I bet Cher is a champion tonight ! Is that what you mean ??
            • Cronyism
              Oh I got the money for a championship thing you mean the ICE ! ahh yes they were still at the Coliseum when they won their championship
            • Cronyism
              What does the money have to do with a championship ? Do you mean IU or Purdue ? Do you mean Fever (they did) not sure what your point is ????
            • Stupid
              Larry, it is very simple, DO NOT rent a car or go out to eat or buy a ticket !! let all those stupid people that come here to see the events hosted by Indianapolis pay that tax ! You know those from the Big 10 are especially "stupid" to come here for those events, you know they all sleep in their cars and bring their peanut butter and jelly sandwiches and I am guessing all the "stupid" people from out side the area that are coming here tonight to see Cher ! I bet no one going to the Concert tonight is sleeping or eating in downtown tonight. I bet every restaurant in downtown Indy is closed tonight. Maybe some of you that can do such a great job of running the facility should step up and take on the management and prove how well you could do it and make our city proud ! I bet you have a vast background in managing a facility and could keep all those jobs protected ! I can hardly wait ! You people that do not like sports or the Simon family or the Irsay family get a clue ! Bankers Life and Lucas Oil are small pieces of this wonderful city. Maybe some of you haters should move to a city with no pride there is still land in places that do not enjoy the quality of life we are blessed to have in Indianapolis, Central Indiana. Thank you Simon Family, thank you Irsay family, thank you Mayor Ballard (and your predecessors) Thank you CIB !
            • Cronyism
              No doubt when this ten year extension expires, the Pacers will threaten to leave if a new stadium isn't built. For all this money, you would think we could at least get a championship.
              • Why Try ?
                Why Try is the question ? Why try to explain something so simple that it should not need explanation to people that have so little understanding of a real city. There is NO doubt that spending the money on DOWNTOWN Indianapolis is the correct thing to do. Try to understand that the money goes to maintenance and repair of Bankers Life Fieldhouse and not the Indiana Pacers (even though it should)it does not go to the Simon family. I could be mistaken but every City, County, State and for that matter every facility in the USA has someone responsible for the operation of that facility, every building should be maintained, just like your own home. I realize that some of you never wash windows, replace carpet or light bulbs but others do and if you ever do those things you realize that they cost money. I, of course, realize that those against the CIB money going to Bankers Life have no clue how many light bulbs, rolls of toilet paper, square feet of carpet or windows there are to be maintained in Bankers Life. Also those against probably are not people that depend on Bankers Life for income ie: security, ushers, concessionaires, parking attendants. Yes the Pacers are the main tenant of the building and those extremely narrow minded people who some how believe this is a Pacer subsidy maybe you should ask the restaurants and small business owners what it was like in downtown not long ago when there was an NBA work stoppage/lock-out ! You are also obviously people that do not have a clue what a building like Bankers Life means to a City ! Other sporting events, Concerts (I bet Cher would love to sing in Garfield Park)The Pacers use the stadium about 60 nights per year. Why are we not blaming this expenditure on the darn Big 10 for taking up those weekends of bringing all those people in for their Men's and Women's Basketball championships and filling our downtown hotels and restaurants with people from Illinois, Michigan, Ohio, Pennsylvania etc. or all the "silly" people going to concerts ? No it is the billionaire that I thank profusely for keeping our Pacers here and losing money every day he does ! Thank you Mr. Simon for helping keep our Pacers here, Thank you Mr. Simon for making your company "World Headquarters" here Thank your Mr. Simon for providing so many jobs in the Indianapolis area and around the good old USA. As far as I am concerned the 160 million should go to you for what you help provide for all of us.
              • Stupid
                The Lucas Oil Stadium deal is considered by national analysts as one of the worst deals in sports stadium history. Now the Pacers deal tops that. We're already being called "stupid" by one national columnist, an expert on these sports stadium deals. We taxpayers paid to build the Fieldhouse. We now pay the Pacers to run the place and keep 100% of the revenue from all events held at the Fieldhouse. The Pacers play for free there and we taxpayers are responsible for improvements to the facility. As far as the notion that the CIB is funded by taxes paid by "visitors", well that's utter nonsense. The chief tax the CIB receives is the 2% food and beverage tax which is paid primarily by local residents. It's the same with the ticket tax. Even the car rental tax which goes to the CIB is mostly from local people.
                • 10 year plan is not 'short term cost'
                  A short term "fix" is something that lasts a few years at most. Not TEN. The city could use $10 million to hire more police officers (to the tune of 50-100), but no.
                • 160 million reasons
                  10 million reasons why Indy has misplaced priorities, but I'll only list 4: 1. The legislature provides corporate welfare on a pay-to-play basis, sometimes via proxies like the CIB, and sometimes directly via its members 2. The legislature does nothing to stop the brain drain. 3. The legislature is all to happy happy to ship out Hoosier dollars to profiteer Repub. cronies in Florida, under the guise of "education reform". 4. The legislature is content with seeing family income and job opportunities degrade.
                • HOW DARE YOU
                  Mr Mayor....please prepare to be voted out of office. TWE THE PEOPLE want a say in where our money goes...OH..sorry there is the Simon Bonus. You people make me SICK
                • Thank you
                  Great news. The economic benefit of the Pacers being in Indianapolis outweigh the short term financial costs to our City. It's that simple. Too bad the small minded (trolling) are unable to see this.
                • Confused!
                  I am confused, how many visitors come to this city and the communities that circle the city that pay the 9% sales tax compared to the every day citizen that eats and drinks where they work and live. The idea that visitors pay the tax and citizens are not affected is bogus. Wake up tax payers, get rid of the current Mayor and abolish the CIB and make this a public, not private organization.
                • Mostly visitor $
                  This announcement brings out the typical responses both pro and against. Doubt most people have a thorough (or even basic) understanding of the CIB, what it's responsible for doing (per state code - http://www.in.gov/legislative/ic/code/title36/ar10/ch9.html) and its sources of revenue. I'm no expert but I've studied these guys from an academic perspective. And as far as I can tell, the $10.8 million a year (with annual escalator on part of it) covers some core Bankers Life Fieldhouse operating expenses (like insurance) with the bulk of it essentially a fee paid to Pacers Sports & Entertainment to manage the building 365 days a year (Lucas Oil Stadium on the other hand is managed directly by CIB staff, NOT the Colts, so the Colts have no comparable building management/operating expenses to be subsidized). The rest of the $ in this deal is stuff the CIB should be paying for anyway to keep the building a high-end facility for any event - game, concert, circus whatever. And almost all the $ come from visitors ... the vast majority of CIB revenue comes from hotel taxes, with a smaller portion from food and bev, car rental, ticket admission tax etc. So unless there is a material change to state law in how this revenue can be used, which ain't happening folks, then the real question is, Is this proposed deal the best way to spend $11 million a year of mostly visitor-generated taxes? Can they operate Bankers Life Fieldhouse more cost effectively than PSE (doubt it)? If the Pacers moved and CIB was responsible for ALL operating expenses for concerts and other events (not all of which are money-makers, you can lose $ putting on concerts) would the annual net revenue be of more value to the community than the value of having a pro basketball team? I'm not convinced of the Pacers direct econ impact as most of the $ come from Hoosiers and I suspect would be spent on other forms of entertainment, so $ would just move around. But that said I doubt the CIB would net out much money, if any, running BLF themselves (wouldn't surprise me if they lost money). Personally I think having the team IS a source of community pride and makes Indianapolis a more attractive place to live, along with museums, arts, dining options, yada yada. You can also enjoy the team for free (or close to it) because so many games are televised ... and there wouldn't be games to televise, home or away, if we don't have a team. So unless state law changes on how that board can spend the tax $ they get (fat chance), none of their revenue is going to fill potholes, hire new cops, or cure cancer. IMO, given the laws on what these guys can do with their funds and the demand for NBA teams (Seattle seems like biggest threat if there still looking when Simon is no longer around), seems like reasonable agreement.
                • Poor Economics
                  I'm not seeing the return on investment. Entertainment dollars are spent somewhere in the metro area by people in the metro area, pacers and colts or not. Charlatans like Italiano seem to think building a giant pyramid in the sky is economic growth. And Perspective seems to think taxes have no limit as long as you call it something different and pay them in a different manner. The city should be providing services: police, schools and infrastructure. Funny how one pot of city money can subsidize $160 million to billionaires employing millionaires seemingly without debate, but can't release $8 million to fix the streets.
                • To Italiano
                  If you don't raise these complaints things don't get better. Italiano, guess you will still be ok with giving away $160M if your house burns to the ground because the city cannot afford proper firefighting equipment,or if your son falls victim to heroin and dies because there are not enough police to stop the trafficking, or you'll still be ok with this when you are taken into an alley at gunpoint and robbed going to a Pacer game? Will you call the Simons when you blow out a tire at 6AM hitting a pothole? All the above are now happening daily in this city. Quality of life has declined dramatically. CIB is the most corrupt organization I have ever seen in "government". That sucking sound you hear is dollars being drained from our local quality of life and being flushed into Simon's bank account. Seattle is doing just great without an NBA team. We can too.
                  • Perspective 2.0
                    Yes, the tax revenue as it is can only be used for CIB projects. However, if there was no tax (other than on tickets and concessions collected by the CIB) it would make it easier for the city to implement or increase a tax to fix roads, education or public safety. In this way the CIB hamstrings the city's ability to raise revenue to pay for essential services. We're up to 9% tax on food and beverage in the city thanks to the CIB taxing "tourists."
                  • Money
                    Everyone gets up in arms about providing any kind of funding to subsidize professional sports in this city. Folks, this money you think we can just spend to pay for rebuilding sidewalks and paying for police officers cannot be used for these purposes. CIB's revenues are largely financed by taxes on tourists. For example, the admissions tax to sporting events, rental car tax, innkeepers tax, and the food and beverage tax. THESE taxes are used to pay for Lucas Oil Stadium, Bankers Life Fieldhouse, and any subsidies therein. Your property taxes and local income taxes do not pay for professional sports.
                    • One word.
                      Criminal.
                    • Great move
                      This is actually a very good expenditure by the city! The Pacers are a huge draw to downtown for many games each season (not to mention a few more for playoffs). These people purchase dinners, drinks, etc and help to generate revenue for the city via sales tax. Not to mention the sense of community spirit that is built from fans attending the games.. But what would anyone posting on here know about community spirit? All any of you do is complain incessantly.
                      • Sad little town
                        Another $160 million down the sewer, subsiding millionaires while the rest of us drive by abandoned houses on crumbling streets. We pay a large price to pretend we're a real city. Too bad the proof that we're not is everywhere. Without subsidies, Indianapolis is a large Kokomo. How utterly pathetic.
                      • Priorities
                        As you can see, our Government has it's priorities. Also as you can see, crime isn't one of them. Gun crime is going crazy in this city, but keeping one of the city's billionaires happy takes precedence.
                      • Here we go again
                        While I realize the importance of the Pacers to Indianapolis, we are going to spend resources that could have been available to get more police officers.

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