The president of the Capital Improvement Board said Friday afternoon that she is confident no tax increase or new taxes will be needed to fund the $160 million agreement that extends the Indiana Pacers’ Bankers Life Fieldhouse lease through at least the 2023-2024 season.
Ann Lathrop, a partner with the accounting firm Crowe Horwath, said that under the new deal, CIB will provide about $11 million toward operating expenses annually, which is only about $1 million more than it has been paying annually since 2010.
While the deal also calls for CIB to provide $33.5 million for renovations and capital projects, Lathrop said CIB already was responsible for some of those expenditures. And she noted the fieldhouse only has had $6.5 million in capital improvements since it opened in 1999.
The $33.5 million, she said, “is going into a building we own and need to maintain. It seems very prudent we would make those improvements to keep a major tenant in the building. It is no different than any other real estate transaction.”
Lathrop said CIB positioned itself to absorb major capital expenditures by refinancing debt at low rates, which has allowed the quasi-governmental entity to sock away tens of millions of dollars in reserves.
While the 2014 budget shows expenses of $152 million and just $119 million in revenue, the gap is “very manageable and completely anticipated” and reflects the board’s decision to tap reserves for capital projects scheduled at its venues this year, Lathrop said. CIB owns the Indiana Convention Center and downtown pro sports venues.
Most of CIB's budget comes from such sources as hotel and motel taxes, food and beverage taxes and admissions taxes.
Lathrop said the current revenue sources are sufficient.
“We have been able to take refinancing savings and utilize that for those capital needs. We just need to do prudent planning in our revenue and expense budget," she said.
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 a CIB board meeting that afternoon.