Convention payoffs won’t be instant: New deals, development unlikely until construction begins

The much-ballyhooed battle about funding for a new stadium and expanded convention center downtown appears to be over, but it will be some time before the victors get the spoils.

Although state lawmakers authorized a series of tax increases to pay for the $900 million project, plenty of work remains to realize the promised payoffs-increased convention business, additional development and a shot at hosting the Super Bowl.

“I don’t expect to see any of that until construction starts,” said Indianapolis City-County Council President Steve Talley. “People want to see a hole in the ground and steel going up in the air before they make a commitment.”

Still, those who spent years making a case for the public investment are pleased with the results of the often-contentious debate: If local governments get on board as expected, construction will begin this summer.

“I’m thrilled that this is done, that the project is going to become a reality,” said Fred Glass, president of the Capital Improvement Board, which owns and manages the convention center and sports facilities. “Two or three years ago … the idea that we could somehow find enough money to pay for this was crazy. Some thought the mountain was too big to climb. I’m really pleased with what we’ve been able to accomplish.”

That said, there are still some hurdles.

Legislation authorizing the project wrests control away from CIB and gives it to a new seven-member state board that will oversee design and construction. The transition began immediately-even before members were appointed-in hopes of keeping the work on schedule.

And county officials throughout the region still must deliver on their promise to approve higher food and beverage taxes to pay for the project. In Indianapolis, the City-County Council will consider four separate tax increases, with a fifth possible if the state board deems it necessary.

“It is going to be a difficult task to get the funding approved by the council,” Talley asserted. “It’s going to take a full-court press … Folks cannot assume the council is going to rubber-stamp anything.”

Councilors have expressed concern about the number of tax hikes and the city’s loss of control, he said.

“All of us want to see this come to a successful conclusion,” Talley said. “It’s a great project. I love being part of it. But I can’t overemphasize how much is still left to be done.”

Indeed, that work has begun.

CIB is turning over years’ worth of studies, status reports, contracts and other documents to the state. Because officials want the stadium ready for the 2008 NFL season, CIB has already hired an architect and construction manager.

Dallas-based HKS Inc. and Hunt Construction Group of Indianapolis have worked on a contingency basis so far, but they will remain on the job. The new board will review a dozen or so other agreements, however, before making commitments to other consultants CIB hired.

Glass said the transition to state control must be complete by May 15.

“It’s a comprehensive hand-off,” he said, “a clean break.”

The legislation, which hadn’t made it to the governor’s desk by IBJ’s deadline, requires the Indiana Stadium and Convention Building Authority to have its first meeting by June 30.

Gov. Mitch Daniels was moving quickly to make his four appointments to the board, said Chief of Staff Harry Gonso, and fully expects it to be operational well before the end of June.

State finance officials also sprang into action, moving to lock in interest rates right away.

“The financing won’t wait,” said Chuck Schalliol, director of the Indiana Office of Management and Budget. “We have to move forward on this.”

By the time the deal closes late next month, the state needs to see a stadium lease with the Indianapolis Colts and must reach its own agreement with CIB, which will operate the facilities when they’re complete.

The state will own the property and improvements until the debt is repaid. A few parcels of land still must be acquired, but Glass said CIB plans to hand over property it owns at the site.

Stakes are high and the time line is aggressive.

All the better to win back two major trade shows that are leaving the Circle City because of a convention center space crunch. Both Custom Electronic Design & Installation Association and Performance Racing Industry have said they’ll return in 2010 if the center is expanded.

Indianapolis Convention & Visitors Association President Bob Bedell and his staff have been busy spreading the good news-to existing customers and potential clients alike. But they still can’t book new business for the expanded space.

“We will start some discussions, continue some discussions and hopefully sometime in the not-too-distant future be in a position to close deals,” Bedell said. “I don’t think we’ll be able to do a lot of selling until we have a final design for the convention center expansion.”

Still, it’s a huge load off his shoulders to know it’s coming.

Legislative approval “was obviously a big step in the process and hopefully the most difficult,” Bedell said. “We feel like everything will proceed the way it’s supposed to from here on out.”

So what’s next?

Observers suspect plans for a new convention center hotel and other ancillary development will surface before long, although probably not until stadium construction is under way.

“Finalizing the financing was a major event,” said Melina Maniatis Kennedy, deputy mayor for economic development. “There is a whole new level of certainty that this [project] is going to happen. I think we’ll see a higher level of interest in development.

“[But] it’s certainly a long-term proposition.”

Another future possibility-if not probability-is a Super Bowl, given the National Football League’s recent history of rewarding cities that invest in new facilities. NFL Commissioner Paul Tagliabue visited lawmakers this spring to support the stadium project.

League spokesman Greg Aiello confirmed that a new stadium could make Indianapolis a candidate for the big game, but said those discussions haven’t progressed.

Team owners are scheduled to vote later this month on a site for the 2009 game; Indianapolis isn’t a contender. This spring, they conditionally awarded the 2010 game to New York City, where a stadium is planned for the west side of Manhattan. And last month, Tagliabue all but promised Dallas a Super Bowl in 2011 or 2012, when its new stadium is complete.

Indianapolis likely would have to make a formal pitch for the game when it’s ready, Aiello said.

Glass remains “very optimistic” that a Super Bowl is in Indianapolis’ future. But he’ll keep plenty busy in the meantime.

“When all is said and done, I hope everyone views this as an important step for the city and the region and it will pass,” he said. “There is work to do, but the major lifting has been successful. We’re running downhill now.”