Saturday, July 12, 2008

Sports Corporation Allowed To Beat Taxpayers Out Of Millions Of Dollars

It's a tight time for City of Indianapolis finances. Services are being cut. Taxes are being raised. And the City of Indianapolis is still giving aways millions of your taxpayer dollars like candy. That's the rub I get from an in-depth story by Cory Schouten in today's IBJ about the Indiana Sports Corporation's recent sale of Pan Am Plaza property to Kite Realty Group. Schouten does an excellent job explaining the history of the formation of the non-profit ISC and how the City pumped millions into the project to get it off the ground, not to mention the gross incompetence displayed by the ISC in the management of these public assets. It's this behind-closed-doors agreement that screwed taxpayers out of millions that's the real story here though:

The city gave the Sports Corp. the properties known as Square 88 in 1986, in exchange for a 30-year agreement restricting development on the plaza. The agreement said the requirement to maintain a “first class urban plaza” could be waived after 20 years if the owner paid a $3 million, inflation-adjusted fee to the city. But late last year, the city agreed to reduce the protected portion of Pan Am Plaza from 88,000 square feet to 10,000 square feet without any payment, citing minimal use of the plaza and decaying infrastructure.
For an unelected bureaucrat, it's just the way business is done. "Enforcing the payment could have stalled a great redevelopment opportunity, said Maury Plambeck, who has served as director of the city’s Department of Metropolitan Development since 2002." To activist attorney Paul Ogden, it's scandalous. Schouten gives us his take on the smelly deal:

But the waiver doesn’t sit well with local attorney and activist Paul K. Ogden, who is preparing a lawsuit challenging the move. His question: Why should the Sports Corp. get the fee waived because it failed to maintain the plaza?

The fee, if enforced and adjusted for inflation, could add up to $6 million to city coffers.

“Basically, the Sports Corp. owes money to the city of Indianapolis,” Ogden said. “It’s a tough position to take that the taxpayers shouldn’t have gotten anything out of the deal.”

Here's the part of Schouten's story which really enrages me. Schouten writes, "Kite owns 85 percent of the partnership that acquired the remaining Sports Corp. holdings. The purchase price for the four-acre site was not disclosed." Are you kidding? The ISC is allowed to selle off this publicly-dedicated land, and we don't even know what the sale price was? Only in Indianapolis would a group of elitist insiders be allowed to get by with this kind of crap. I say full speed ahead to Ogden's lawsuit. Somebody has to teach these people a lesson. Our public assets aren't your little playground to enrich your buddies who invite you to all their private parties and entertain you in their suites at Conseco Fieldhouse and now Lucas Oil Stadium.

13 comments:

Wilson46201 said...

Had enough?

Greg Lies!

Advance Indiana said...

Uh, this deal was hatched by Mayor Peterson, Wilson. And if I'm not mistaken, Kite was one of Bart's biggest political contributors.

Bart Lies said...

Never ceases to amaze me how 'public' property can be bought and sold without complete disclosure to said public.

This stuff goes on with a few straightmen telling us how it's boosting one thing or another: our economy, the way other cities see us, etc.

And the best information we get is little more than a Joe Isuzu 'Trust Me' from the organization foisting them on us.

Bart Lies said...

I must say Wilson-Art's quality of trolling has dropped considerably during the Ballard administration.

dokkaq said...

It's okay Gary, the Ballard kids love the free tickets to Pacer and Colts games!

artfuggins said...

I dont think Ballard lies...I dont think he is engaged enough to even know enough about being mayor to tell a lie....he is just an absentee mayor who is the puppet of the old time corrupt GOP machine. Wilson, we need to meet sometime and discuss things since several people keep posting that I am you........but that is just one of many things that they are wrong about....!!

Advance Indiana said...

E-mail from Paul Ogden's reposted with his permission:

There are a lot of things that article did not mention. First, the amount the Sports Corp. would have had to pay for extinguishment of the covenant was $6 million. That is how much the $3 million 1985 figure would have been adjusted upward using the CPI index.



The debt the city assumed to purchase those lots in 1985 has never been paid off...it was simply rolled into more debt and we've only been paying the interest on that.



Another thing not mentioned was that the original 1985 deal was signed off by Michael Browning on behalf of the Sports Corp. (He was VP of that organization at the time.) His company then turned around and developed that property for the Sports Corp. Browning still sits on the Board for the Sports Corp. Certainly seems like a conflict.



The only purchase price for all those lots deeded by the City to the Sports Corporation was that they build and maintain an 88,000 square foot public plaza for 30 years. They could have gotten out after 20 years but the Sports Corp. would have paid the penalty of $3 million upward by the CPI index, now approximately $6 million.



We're still looking into the legality of what was done and the applicable law. It's very complicated and difficult to track. Regardless of whether it was legal though, it doesn't pass the smell test. On December 19, 2007, a resolution was quietly introduced at the Metropolitan Development Commission to change the 1985 agreement to reduce the plaza commitment from 88,000 square feet to 10,000. There was no mention of the fact that this would cost the city millions of dollars. I highly doubt that the appointees on the MDC who by voice vote approved the resolution in a batch with other resolutions, had any idea what it would cost taxpayers.



The timing on this deal should also raise suspicions. Peterson had lost the election and was his way out of office. Susan Williams is a big Democrat who supported him. Kite and Browning were Peterson supporters, were they not? Nonetheless, my fellow Republicans have done similar things in the past. They certainly failed to speak up about the modification of the 1985 agreement. The original 1985 deal, which a Republican administration crafted, was not a good one. An entire city block of prime real estate was given away for virtually nothing and converted into literally nothing with the 2007 amendment. At the very least, there should have been a requirement that the debt be paid off that the city incurred in acquiring the property.



I like, AI, believe in full disclosure on deals like this. It is outrageous that public-financed property can be sold and the amount received kept a secret from the taxpayers.



Paul Ogden

7th CD guy said...

Maybe artfuggins will identify himself openly, just as Wilson46201,indyernie, and garyj do.
Oh, Wait, Wilson Allen and artfuggins are one in the same!

artfuggins said...

...and 7th CD guy......what an unusual name you were born with or is that a pseudonymn also......typical republican...telling someone to do something while you fail to do it yourself.

David Myers said...

Maybe you should read the contract on the Colts bonds that the city holds. You would be suprise what is in it. For example if this project fails, Colts nor thier owners are held to the contract.

7th CD guy said...

AKA... James Wilcox

Concerned Taxpayer said...

"But late last year, the city agreed to reduce the protected portion of Pan Am Plaza from 88,000 square feet to 10,000 square feet without any payment..."

Let me see...now who was mayor late last year?

Concerned Taxpayer said...

Mr Myers (or anyone else who can help)

Is that contract online somewhere? The one re: Colts bonds.