Capital Improvement Board ends 2020 with $40M deficit

The city’s Capital Improvement Board ended 2020 with a deficit of nearly $40.7 million—a direct result of the pandemic walloping the Indianapolis agency’s event calendar.

The board on Friday said preliminary end-of-year revenue of $74.8 million—composed of operational funding and tax-based revenue from throughout last year—was off by about 52% from the prior year and 51% off budget. 

The figures must still be verified and audited, a process expected to be completed later this year.

The CIB anticipates financial strains throughout 2021 as well, with an anticipated deficit of nearly $42 million.

The Indiana Convention Center, which is operated by the CIB, stopped hosting events for several months in mid-March, but by early July was able to host dozens of socially-distanced and reduced-capacity events, most of which involving youth sports and small meetings.

In addition to the convention center, the CIB operates and owns Lucas Oil Stadium, Bankers Life Fieldhouse, Victory Field and Hudnut Commons.

“Obviously, this has been a very challenging year with COVID, but we remain optimistic with an end in sight,” said Melina Kennedy, president of the CIB. “

The CIB’s operating revenue on the year was $10.1 million, nearly 76%, or $31.5 million, off budget, and 74%, or $28.3 million, below 2019 figures.

In 2020, the board brought in about $61.1 million in tax revenue, which typically accounts for about two-thirds of the CIB’s annual budget. That’s about 41.5%, or $43.3 million, below budget and 45% less than than the prior year.

Tim Kuehr, chief financial officer for the CIB, said the group’s reserve fund ended at about $130 million in 2020, but is now at $117 million after a withdrawal was required to cover a funding gap.

Leonard Hoops, president of Visit Indy, said during Friday’s meeting, that the Indianapolis area’s overall occupancy rate last year was 41.2%, according to preliminary data from Nashville-based statistics firm STR..

Downtown was the hardest hit area, coming in at about 28% for the year, while the non-downtown parts of Marion County came in around 45.5%. Nationally, the occupancy rate was around 44%.

Hoops said the city’s hotels missed out on nearly $359 million in hotel revenue this year—10% of which would have gone to the CIB through tax revenue.

The Visit Indy board has set a goal of 650,000 hotel room nights in 2021—an increase of 75,000 room nights from the 2020 goal.

He also said while the NCAA and Marion County Public Health Department have not yet determined whether fans will be allowed at the men’s basketball tournament being held in the city next month, Visit Indy is hopeful fans will be allowed at the Final Four and national championship games.

Those games, played at Lucas Oil Stadium on April 3 and 5, could potentially have up to 15,000 fans, he said.

“This is not any inside information this is just purely Leonard [and] Visit Indy speculation, that we are optimistic that fans will be allowed—some level of fans will be allowed—for the Final Four,” Hoops said. “We’re hopeful that something in the neighborhood of 15,000 fans will be allowed for those games and more than likely, if that’s the case, they’ll be out-of-town fans.”