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CIB, Pacers dancing toward a new Fieldhouse lease deal

May 11, 2010

I’m no dance major.

But I know choreography when I see it.

After yesterday’s Capital Improvement Board meeting, I’m convinced we’re dancing toward a deal that will keep the Indiana Pacers here long term.

And I’m not saying that’s a bad thing. I’m not saying it’s a good thing either.

What I am saying is I think a deal between the Pacers and CIB gets done, and I think it gets done by June 30.

After wading through the hour-long CIB meeting Monday and a 17-page double-sided report prepared by Hunden Strategic Partners regarding the Pacers’ impact on Indianapolis, this is what I came away with.

Two quotes; one from CIB President Ann Lathrop and another from Paul Okeson, former Mayor Greg Ballard chief of staff turned CIB member and point person on Pacers negotiations.

“Having a marquee tenant benefits everyone involved,” Lathrop said as part of her synopsis of the study.

“The study bears that out,” Okeson added. “It confirmed what we knew.”

Lathrop also said the Pacers had seen the study before the meeting to see if the numbers made sense to them.

“I feel this study is very important,” Lathrop said. “It allows us to have a true benchmark.”

One thing appears clear; The study will be used as a hammer to drive home the point that the city can’t afford to lose the Pacers. After all, it says the Pacers generate $55 million annually for the local economy affecting 909 full-time jobs.

Those are big numbers. And big numbers need to be put in context. That’s not direct spending. The direct spending the Pacers generate over 365 days is $31.57 million.

This year’s Final Four, held over four days, brought direct visitor spending of $60 million to this city, according to the Indianapolis Convention and Visitors Association. The Super Bowl allegedly brings direct visitor spending of $450 million.

An event such as the FFA brings in $30 million or so in direct visitor spending in a week.

The CIB is being asked to spend $15 million annually to preserve $31.57 million in direct spending. Notice I didn’t use the term ‘visitor spending,’ because most of the spending at Pacers games is being done by Hoosiers. Some economists would argue that Hoosiers would spend that money somewhere else, if not with the Pacers. Quite possibly that money would be spent in the suburbs, and that’s a valid concern for supporters of the notion that a vibrant downtown is a good thing.

It should be pointed out, that it would cost the city nearly as much to operate Conseco Fieldhouse without the Pacers. But the city wouldn't have to share non-basketball revenue either. And the $150 million or so the Pacers would have to pay to get out of the 20-year Fieldhouse lease deal sure offers a nice transition cushion.

I have no doubt that Rob Hunden, Hunden Strategic Partners president, is well qualified to conduct such a study. But you can’t blame taxpayers if his hiring is looked at skeptically. Hunden, formerly worked for the Indianapolis Bond Bank under Mayor Stephen Goldsmith. It should be noted, it was the Bond Bank that paid Hunden his $30,000 consulting fee, not the CIB. And it should also be noted that Hunden was intimately involved in the planning and construction of Conseco Fieldhouse when he worked for Goldsmith.

I have no reason to point an accusatory finger at Hunden or his findings. But appearances of conflict of interest are just that. So I’ll let the taxpayers determine what appears to be the case.

I would have liked to hear from a sports economist. Former IUPUI dean (now a dean at the University of Michigan) Mark Rosentraub might have been a good choice. Or if you prefer someone with no connections here, Andrew Zimbalist, a nationally known sports economist from Smith College would have been a solid choice. And trust me, Zimbalist pulls no punches and he’s nobody’s shill.

While I’m convinced a deal to keep the Pacers here gets done sooner rather than later, and that commissioning this study is a key part of the process, not so much for what it uncovers but what it supports, that doesn’t mean everything has been settled.

I have some confidence that Lathrop is looking out for the taxpayers.

I think the following things are on the table. Who will run the Fieldhouse.

Lathrop talks too much about finding synergies between the Fieldhouse, Lucas Oil Stadium and the Indiana Convention Center not to be serious about exploring the possibility of the city taking over the whole shooting match. Is that the answer? I’m not sure. Taking on capital expenditures and daily maintenance of an aging building could be daunting. But if the CIB can handle the Convention Center and LOS, who not the Fieldhouse?

I think Lathrop is also negotiating to see if the city can get a piece of the naming rights money to off-set its expenses. She calls that a “deal point.”

I think Lathrop is also negotiating to see if the deal can be extended beyond the original 20-year term. That’s a critical point in making sure the city doesn’t end up in this same mess in nine years—or less if the city gives the Pacers room to wiggle out again.

Is the game over? Not by a long-shot.

But the two-minute warning has sounded.

That doesn’t mean there still isn’t plenty of time for both sides to score some points.

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