Sunday, August 27, 2006

Indy, We Have A Problem

The Star's Karen Eschbacher brings us more bad news today on page one about how the Capital Improvement Board of Managers has no plan for how it's going to pay for the extra costs of running the $675 million Lucas Oil Stadium, except to ask the legislature for permission to divert revenues from new taxes imposed to cover the stadium's construction costs. The CIB is projecting that annual operating expenses for the stadium will be at least $10 million more than the annual operating costs of the RCA Dome.

In light of this latest news, my question is how could the state and the CIB have negotiated such a bad deal for the taxpayers? Awhile back the Star told us about potentially large cost overruns associated with the construction of the stadium and where the money would come from to pay for those costs? We learned then that other cities had negotiated contract terms that compelled team owners to bear the costs of any such excess construction costs, but no such term was included in the deal with Colt's owner Jim Irsay.

We also learn from today's story that other cities have contracts with team owners which cover the operating expenses for the stadium. The Pittsburg Steelers are responsible for the operating costs of Heinz Stadium. The Kansas City Chiefs are responsible for most of the operating costs for Arrowhead Stadium. And Soldier Field in Chicago is operated by a private firm, which operates the facility with the revenues that are generated from nonfootball events held at the stadium.

Lucal Oil Stadium will generate lots of revenues. The problem is that the CIB gets very little of those revenues; instead, they go directly into the pocket of Colts' owner Jim Irsay. He gets all the game-day revenues from concession sales. He gets half the profits from from nonprofit events, which is another $3.5 million a year. And he gets a windfall from the naming rights purchased by Lucas Oil.

It is infuriating that the only solution the CIB has to this problem is to make taxpayers pay even more for a new facility which greatly enriches Jim Irsay. The taxpayers should say, HELL NO, WE WON'T PAY. It's about time our city leaders started looking out for the interests of its hard-working taxpayers instead of multi-millionaire professional sports team owners who don't even live in our community. It says very little about the negotiating abilities of Fred Glass and other CIB officials who negotiated such poor terms for the taxpayers. If they need money to operate the facility, then they better go back and re-negotiate the deal with Mr. Irsay.

4 comments:

Anonymous said...

Read closer, AI. The state screwed Indianapolis when it took over the deal by not allowing the taxes raised to be used for operating costs. Reading between the lines: Republican state legislators screw Democrat Bart Peterson for politics. They'll probably find some way to blame Bart when they run over the budget, remember they were state was supposed to run the project "more efficiently." Ha!

Advance Indiana said...

Anon, the Mayor and the CIB knew the state's position on that before they broke ground on the new stadium; they chose to build now and worry later rather than renegotiate with Irsay.

Anonymous said...

I would suspect that both of you are correct on this!

Anonymous said...

You're just wrong, AI. They had not yet finished negotiating the ongoing maintenance/operations agreements, when the state rushed in and took over. The Mayor, to his credit, backed away, thinking it was more important that the stadium get built, than for him to claim credit for it. One of the more valiant moves of his terms. I'd have told Murphy and Hinkle to shove it, but, of course, that would have bene wrong.

It doesn't really matter...because the real story here is the fact that the state has no experience with facilities like this. The CIB has plenty, under Dem and Republican mayors, and they've had nary a problem with ongoing budgets.

And away we go...