A bill filed in the Indiana General Assembly seeks to keep the Indiana Pacers in Indianapolis for at least another 25 years and could significantly boost funding for sports and tourism development in the city.
Senate Bill 7, filed by Senate Appropriations Chairman Ryan Mishler, would extend the life of multiple tourism- and entertainment-related taxes that help fund the Capital Improvement Board and expand the footprint of what’s known as the Professional Sports Development Area to capture even more tax revenue for the CIB.
The bill would also increase the amount of the revenue the quasi-governmental agency could collect from the PSDA after July 1, 2021.
The CIB, with cooperation from Indianapolis Mayor Joe Hogsett’s administration, has been working with the state’s key budget writers for months, as it tries to find a way to replace the $8 million per year in operating revenue that will be redirected to pay off bonds for a proposed $120 million expansion of the Indiana Convention Center. The CIB is also looking ahead at future projects, including likely renovations at Bankers Life Fieldhouse.
But all the extra revenue has a catch: The CIB and the Pacers have to sign a new 25-year agreement by April 1.
The Pacers, unlike the Indianapolis Colts, don’t have a long-term deal to stay in Indianapolis. The Pacers’ lease at the fieldhouse runs through 2024, while the Colts’ contract runs through 2037. The Colts could terminate the deal in 2030, though, if the team is not among the top five NFL teams in gross operating revenue.
It was not immediately clear exactly how much revenue the bill would generate for the CIB or how much the state would be giving up. Board President Melina Kennedy did not immediately return a phone call from IBJ, and Mishler was also unavailable for comment Tuesday afternoon.
Pacers officials referred questions to the CIB.
The CIB, which owns Bankers Life Fieldhouse, Lucas Oil Stadium and the Indiana Convention Center, already receives $169 million annually—80 percent of its revenue—in state and local tax dollars that it uses for operations and to pay off bonds for buildings.
Some comes from the PSDA, which is a zone mostly downtown that captures state income and sales tax revenue generated at Lucas Oil Stadium, Bankers Life Fieldhouse, Victory Field, the Indianapolis Colts’ northwest-side practice venue and four downtown hotels.
Tax revenue from the sports venues within the PSDA is currently capped at $16 million. Under the bill, if the state collects more than $16 million, the CIB would get 20 percent of that extra revenue, in addition to its $16 million, starting July 1, 2021.
The same increase would apply to the current $8 million cap on tax revenue generated from the four hotels within the existing PSDA. If the state collects more than $8 million, the CIB would receive 20 percent of the excess, starting July 1, 2021.
The bill would also expand the footprint of the PSDA to include the two Hilton-branded hotels proposed in conjunction with the convention center expansion at Pan Am Plaza and the site of the 316-room Hyatt Place/Hyatt House that is under construction on Pennsylvania Street, across from Bankers Life Fieldhouse, starting July 1.
The annual tax revenue the CIB would receive from the additional hotels would be capped at $7 million annually, plus 20 percent of any revenue in excess of that amount that the state collects.
The bill would also allow the CIB to continue receiving revenue from an auto-rental tax and admissions tax through February 2038. The auto-rental tax, which generated $7.2 million for the CIB in 2017, and the admissions tax, which generated $15.1 million in 2017, will otherwise both expire by the end of 2027.
Extending those taxes would require action by the Indianapolis City County Council.
The legislation would also allow the Indiana Treasurer’s Office to loan the CIB money from the state’s excess revenues starting in 2027. Any loan would have to be repaid with interest by June 30, 2038.
Gov. Eric Holcomb has said he thinks it’s “very important” to keep the Pacers in Indianapolis and that he would be interested to see the funding proposal.