The CIB: What Happened, What's on the Table
This will be a Multi-Part Discussion on The Bailout Before Indianapolis
Alas! Poor Mayor Ballard, I knew thee well! T’were ever there to be an albatross for your administration, it will forever be known as the Capital Improvement Board (now forever shortened to CIB). Perhaps it first started with the appointment of Robert Grand to lead, creating a short murmuring of his law firms engagement to lobby for Simon Properties and involvement with the Pacers. That quieted down soon enough (except for maybe a few bloggers with some sort of personal axe to grind, and they know who they are), until the announcement that the CIB was running into a massive deficit and something needed to be done. That - is where everything hit the fan.
To recap it all, basically it boils down to this: Lucas Oil Stadium costs way more to run then originally planned. And let me, as a point of personal privilege, say that the mess the CIB is in was not created by it’s current leadership. It started way back in 2002 when the Colts started to quietly threaten they could leave, a few years before their negotiation with the City was due. Remember, the business of the Colt’s franchise is to make money - not to entertain you or me. Jim Irsay played this beautifully, letting murmurs swirl, and Fmr. Mayor Bart Peterson folded and voila! Guess who got a new stadium and a sweet heart deal? I mean honestly, for a team that uses the Stadium only a fraction on the time (no, seriously they get it for game days and maybe a handful of other times) the CIB pays the Colts 1.5 mill a year for “game day expenses”, 3.5 mill from other events at the stadium, and oh yeah they get parking revenue for home games.
Currently, LOS “take home pay” is going to be 7.7mil and they’re going to be running 20mil in the red. But that’s only half the story, let’s look at those wonderful Pacers. Apparently, and yes this is new to me, the Pacers has been consistently loosing money. Now, that’s traced back to the Simon Family who also got a sweet heart deal. Pacers are loosing about 30mil a year, and the early “lease” (or contract or whatever the heck they call it) calls for them to pony up 15mil a year to help with the Fieldhouse.
Now, the issue in front of the State Legislature, but not in front of the people, is what to do? Do we pony up the penny more per drink? An increase in hotel tax? Dipping into other funds? Or let them flail? Really, it comes down to one issue: do we bail them out or not?
The plan now in front of the legislature, I believe, calls for:
1)Raising the alcohol tax (though, this is in and out of different plans)
2)Increasing the hotel tax (yes, highest in the nation, but it will STILL cost less to rent a room here then in Chicago)
3)Increase in Car rental tax (this has a sunset clause, which it will be removed when not needed)
4)Increase in ticket tax
5)Massive cuts in the CIB Operational Budget (they've cut operational budgets and funding to cultural/arts programs all ready)
6) The teams to kick in more (though, strangely no team has came forward to discuss this issue)
The second issue is to let them go into bankruptcy, and as someone with only personal bankruptcy experience (in that I worked with a Bankruptcy Case Manager in a law firm and filled out all those bankruptcy forms for people). I’m going to try and make this as straightforward as I can, as bankruptcy laws make my eyes cross. It would be a Chapter 11 bankruptcy where things can get reorganized. It would mean all the deals organized for the leases of various stadiums would be rewritten by a court. It could mean we’d loose the Colts/Pacers. Honestly if we loose the Pacers I would not be too torn up about it.
As they sang in the musical Buffy episode “where do we go from here”. There have been protests and public meetings, people have screamed and asked for resignations, but as I took a walk yesterday I found myself staring up at the LOS wondering if we could lose it or if we could lose Conseco Fieldhouse. Then I took a few more steps and found myself staring at Victory Field. The Indianapolis Indians are rockstars in my fiscal list.
They’re a AAA team, not even in the major league! Yet, they’re pulling in a profit and working it. Their deal included holding onto their money and paying for maintenance/operating cost. Hell! They got hit with the ticket increase to help pay for Conseco and LOS. Hats off to that organizational structure.
So, within the coming days I’m going to think and put out my opinion as to what exactly we can do to fix this. It’s really let them sink or help them swim. And, as you’re only as good as your credibility, I did work for Barnes & Thornburg, I don’t anymore.
Sources:
“Will The Colts Stay” an October 2002 IndyStar Article
“Lucas Oil Stadium: Still Not Finished” an April 2009 WTHR Story
“Pacers look to state to run Conseco Fieldhouse” a March 2009 WTHR story
“CIB Makes Cuts, Looks For Way to Keep Pacers” a March 2009 WRTV story
USCourts.gov explination of Chapter 11 Bankruptcy
“Indians pull own weight” a February 2009 All Business.com article
Alas! Poor Mayor Ballard, I knew thee well! T’were ever there to be an albatross for your administration, it will forever be known as the Capital Improvement Board (now forever shortened to CIB). Perhaps it first started with the appointment of Robert Grand to lead, creating a short murmuring of his law firms engagement to lobby for Simon Properties and involvement with the Pacers. That quieted down soon enough (except for maybe a few bloggers with some sort of personal axe to grind, and they know who they are), until the announcement that the CIB was running into a massive deficit and something needed to be done. That - is where everything hit the fan.
To recap it all, basically it boils down to this: Lucas Oil Stadium costs way more to run then originally planned. And let me, as a point of personal privilege, say that the mess the CIB is in was not created by it’s current leadership. It started way back in 2002 when the Colts started to quietly threaten they could leave, a few years before their negotiation with the City was due. Remember, the business of the Colt’s franchise is to make money - not to entertain you or me. Jim Irsay played this beautifully, letting murmurs swirl, and Fmr. Mayor Bart Peterson folded and voila! Guess who got a new stadium and a sweet heart deal? I mean honestly, for a team that uses the Stadium only a fraction on the time (no, seriously they get it for game days and maybe a handful of other times) the CIB pays the Colts 1.5 mill a year for “game day expenses”, 3.5 mill from other events at the stadium, and oh yeah they get parking revenue for home games.
Currently, LOS “take home pay” is going to be 7.7mil and they’re going to be running 20mil in the red. But that’s only half the story, let’s look at those wonderful Pacers. Apparently, and yes this is new to me, the Pacers has been consistently loosing money. Now, that’s traced back to the Simon Family who also got a sweet heart deal. Pacers are loosing about 30mil a year, and the early “lease” (or contract or whatever the heck they call it) calls for them to pony up 15mil a year to help with the Fieldhouse.
Now, the issue in front of the State Legislature, but not in front of the people, is what to do? Do we pony up the penny more per drink? An increase in hotel tax? Dipping into other funds? Or let them flail? Really, it comes down to one issue: do we bail them out or not?
The plan now in front of the legislature, I believe, calls for:
1)Raising the alcohol tax (though, this is in and out of different plans)
2)Increasing the hotel tax (yes, highest in the nation, but it will STILL cost less to rent a room here then in Chicago)
3)Increase in Car rental tax (this has a sunset clause, which it will be removed when not needed)
4)Increase in ticket tax
5)Massive cuts in the CIB Operational Budget (they've cut operational budgets and funding to cultural/arts programs all ready)
6) The teams to kick in more (though, strangely no team has came forward to discuss this issue)
The second issue is to let them go into bankruptcy, and as someone with only personal bankruptcy experience (in that I worked with a Bankruptcy Case Manager in a law firm and filled out all those bankruptcy forms for people). I’m going to try and make this as straightforward as I can, as bankruptcy laws make my eyes cross. It would be a Chapter 11 bankruptcy where things can get reorganized. It would mean all the deals organized for the leases of various stadiums would be rewritten by a court. It could mean we’d loose the Colts/Pacers. Honestly if we loose the Pacers I would not be too torn up about it.
As they sang in the musical Buffy episode “where do we go from here”. There have been protests and public meetings, people have screamed and asked for resignations, but as I took a walk yesterday I found myself staring up at the LOS wondering if we could lose it or if we could lose Conseco Fieldhouse. Then I took a few more steps and found myself staring at Victory Field. The Indianapolis Indians are rockstars in my fiscal list.
They’re a AAA team, not even in the major league! Yet, they’re pulling in a profit and working it. Their deal included holding onto their money and paying for maintenance/operating cost. Hell! They got hit with the ticket increase to help pay for Conseco and LOS. Hats off to that organizational structure.
So, within the coming days I’m going to think and put out my opinion as to what exactly we can do to fix this. It’s really let them sink or help them swim. And, as you’re only as good as your credibility, I did work for Barnes & Thornburg, I don’t anymore.
Sources:
“Will The Colts Stay” an October 2002 IndyStar Article
“Lucas Oil Stadium: Still Not Finished” an April 2009 WTHR Story
“Pacers look to state to run Conseco Fieldhouse” a March 2009 WTHR story
“CIB Makes Cuts, Looks For Way to Keep Pacers” a March 2009 WRTV story
USCourts.gov explination of Chapter 11 Bankruptcy
“Indians pull own weight” a February 2009 All Business.com article