A city board next week will consider the creation of a new downtown taxing district to support a planned stadium for the Indy Eleven soccer team, part of the larger $1 billion mixed-use development known as Eleven Park.
The tax district, known as a professional sports development area, or PSDA, would allow for the collection of various taxes to cover a portion of the cost for the 20,000-seat stadium—a key component of Indy Eleven and Keystone Group owner Ersal Ozdemir’s expansive redevelopment of the Diamond Chain Manufacturing Co. property just southwest of the Mile Square.
The Indiana General Assembly passed enabling legislation in 2019 allowing for state tax contributions of up to $9.5 million per year toward debt service on the soccer stadium, as long as Ozdemir or his firm contributed at least 20% of its overall cost.
The PSDA would generally rely on state retail taxes, local and state income taxes, and food and beverage taxes collected within the district—as dictated by state law—but the proposed resolution for the district also allows innkeepers taxes and admission taxes to be used.
The city’s Metropolitan Development Commission will consider the plan on Nov. 1, with approval sending the proposal to the City-County Council. However, it would likely be only the first of several government-related hurdles related to the project in the coming months.
Department of Metropolitan Development spokesperson Hannah Thomas in a written statement Friday said the MDC vote “marks the beginning of the local Council process” related to the PSDA and other incentives.
That’s because Indy Eleven also must sign a deal with the city’s Capital Improvement Board (which also operates the Indiana Convention Center and Lucas Oil Stadium), designating the board as the stadium’s owner, in addition to a separate incentive deal still in the works with the city’s Department of Metropolitan Development.
Thomas said the city continues to work with the CIB to finalize a feasibility study in partnership with Chicago-based firm Hunden Partners. The study is meant to determine revenue that could be generated by both the stadium itself and the Eleven Park project as a whole.
She said once due diligence is completed on financial aspect, the city can move forward with seeking bonds to pay for the stadium project. The CIB declined to comment for this story.
Indy Eleven is also continuing to negotiate a larger deal with the city, something Mayor Joe Hogsett said during Thursday’s debate is still being worked through. In fact, Hogsett said the administration and Keystone Group are nowhere near a completed deal. The city tends to use single-site tax-increment finance districts, secured through developer-backed municipal bonds, to support developments.
While the deployment of such a mechanism (which relies not on sales or income taxes, but on increases to property values) could be used in this case, it remains to be seen whether it will be earmarked for infrastructure or could be used for other components, like the office space or apartment components. For larger projects, the city tends to focus more on supporting site infrastructure than other elements.
The proposed boundaries for the PSDA include the entire 20-acre site, but they also go far beyond that to form a piecemeal, non-contiguous district made up of properties throughout downtown. Those include the 220 N. Meridian St. office tower and the future InterContinental Hotel at 17 W. Market Street—both of which are owned by Keystone Group—and other future hotel sites like the Motto by Hilton at 1 N. Meridian St. and the Kimpton project at 1 N. Pennsylvania St.
The PSDA also includes the former General Motors stamping plant property on the west bank of the White River, a portion of which is being redeveloped into a headquarters for Elanco Animal Health Inc.
According to Thomas, state statute requires parcels included in a PSDA to be within a one-mile radius of the target site.
“[Our] intention is to include sites with new revenues, like both of these Keystone-owned developments that have or will soon be completed,” the spokesperson said.
The new PSDA would be the second in downtown Indianapolis, joining another created in 1997 that currently captures state income and sales taxes collected at Lucas Oil Stadium, Gainbridge Fieldhouse, Victory Field and 13 downtown hotels, including the downtown Marriott, the JW Marriott, the Westin and the Hyatt Regency, as well as the Colts’ practice venue on the northwest side.
Construction is underway on some elements of Eleven Park. The stadium is expected to be completed by mid-2025, in time for that Indy Eleven season.