A City-County Council committee on Tuesday opted to advance a funding plan for the city's Capital Improvement Board, but held off on approving a related funding plan for a proposed overhaul of Bankers Life Fieldhouse.
The unanimous votes by the Rules and Public Policy Committee came as part of an effort by the members to better understand the CIB’s finances and its plan to spend about $270 million to make capital improvements to the arena as part of a 25-year deal with the Indiana Pacers.
The committee approved three resolutions on Tuesday, including an expansion of a Professional Sports Development Area, or PSDA, that would capture tax revenue from nine additional downtown hotels through at least 2040.
The city’s Metropolitan Development Commission on May 8 voted to approve the augmented PSDA, which already captures tax revenue from the downtown Marriott campus, the JW Marriott, the Westin and the Hyatt Regency.
The new PSDA would include 13 downtown properties, with the addition of Hyatt Place/Hyatt House, 130 S. Pennsylvania St.; Crowne Plaza at Union Station, 123 W. Louisiana St.; Omni Severin, 40 W. Jackson Place; Embassy Suites, 110 W. Washington St.; The Conrad, 50 W. Washington St.; Hilton, 120 W. Market St.; Sheraton, 31 W. Ohio St.; The Alexander, 333 Delaware St.; and Le Meridien, 123 S. Illinois St.
A measure that would allow the CIB to borrow from the state treasurer’s office also was approved, along with an extension of the county admissions and supplemental auto rental excise taxes, which were set to sunset in coming years.
Each mechanism helps fund CIB’s operations and was considered vital to moving the Pacers deal forward from a financial standpoint.
The tax streams also aim to bring some financial stability to the CIB, which faces a fiscal cliff without their passage by City-County Council, which is expected to vote on the matters June 3.
Two other resolutions—both directly related funding the Pacers deal—were halted to give councilors an opportunity to learn more about the CIB’s funding plan for the Fieldhouse project, including projections on the debt service expected from bonds that would be issued to pay for the project.
Council leaders are expected to meet with members of the Hogsett administration and the city’s chief financial officer in the coming weeks, along with CIB representatives, said council President Vop Osili.
He said councilors entered Tuesday’s meeting with plans to hold off on a vote that would approve bonds or lease borrowings for the Fieldhouse improvements, noting they wanted “to take a little more time” to discuss the project’s financing.
The CIB also requested an additional appropriation of $29 million from its budgeted 2019 reserves to help cover costs related to the Fieldhouse project, including payments for the design work and other expenses that are typically paid upfront.
Osili said the council is cognizant of a state-imposed Aug. 1 deadline for the deal to be finalized.
Andy Mallon, new executive director of the CIB, said the board has a “solid financing plan” for the project, including the issuance of bonds, but noted the council’s approval is part of the process. The council must authorize the CIB to take on debt for large projects.
Mallon, formerly corporation council for the city, was involved in numerous projects in that role that required approval for bonds and other funding mechanisms.
The board reached a deal with the Pacers in April that’s worth about $800 million, including more than $100 million in technological improvements to the venue and $12.5 million to $16.5 million per year in operating-cost reimbursements. Construction on the Fieldhouse project is expected to start in early 2020.