Tuesday, September 16, 2008

Prepare For Battle: Stadium Funding Fight Is On

The elites who've been taking Indianapolis taxpayers for a ride for decades now are back at it again. By hook or crook, they're going to stick the bill for operating and maintaining the Lucas Oil Stadium on the taxpayers. You built it, but Jim Irsay gets free use of it for his billion-dollar Colts franchise and gets to pocket the lion's share of the revenues the stadium generates. Bob Grand, the self-dealing, conflicted president of the Capital Improvement Board, is now laying the ground work to stick it to the taxpayers for the additional $20 million in operating expenses the CIB has incurred as a result of the new stadium. Higher taxes, user fees or a state bailout are all options the CIB is considering according to the Star's Brendan O'Shaughnessy.

As far as Jim Irsay is concerned, it's not his problem. "As a tenant, we're not in a position to comment or suggest a solution" to the operating shortfall, said Pete Ward, the team's vice president. "To suggest reopening (the lease) agreement that took four years to negotiate is ludicrous." Well, Mr. Irsay and Mr. Ward, you better prepare yourself for reopening that agreement. And further, we the public demand that you open up the Colts' books. We want to see who is on Mr. Irsay's payroll. If we're going to provide hundreds of millions in taxpayers subsidies to this private concern, then we have a right to know where the Colts' income is going. We can't understand how our public officials could have screwed over the public so badly with this one-sided deal. We think something is amiss. If Mr. Irsay has nothing to hide, then he will let the public see his payroll.

The comments coming from the former head of the CIB, Fred Glass, pretty much prove the public's worst suspicions. O'Shaughnessy writes, "Former CIB Chairman Fred Glass said rolling operating costs into the original construction borrowing plan would have made more sense." "He said the convention center, RCA Dome and Victory Field all worked that way." "I've been frustrated by suggestions that paying operating costs out of the bonds is unusual or bad public policy," Glass said. "I said early on that the CIB will be bankrupt without funds for operation." How stupid could Glass be? The reason you don't use bonds to pay operating expenses is so you aren't tearing down a building 25 years after you build it and still owing as much as it cost to originally build, which is precisely what is happening with the RCA Dome. This is what happens when you put someone in charge of the CIB who has zero business experience, whose primary concern is to impress the elite insiders who do business with his law firm and who could give a damn less about the public's interest.

Glass and Mayor Peterson knew before this stadium was ever built that the state had no intention of allowing the tax revenues to be diverted for operating and maintenance expenses. "We were led to believe until the last minute that the increased revenue from the stadium would pay for the operation," Sen. Luke Kenley told O'Shaughnessy. "He said he'd be willing to work with city officials to come up with a new plan, preferring to rely on user fees rather than new taxes." No way, Luke. We will not stand by and allow state lawmakers to bail the CIB out of this one. They will do for once what we, the public, demand of them. They will immediately convene talks with Irsay to return a portion of the public's money which should have never been slipped into his pocket. If Irsay refuses to go along with the public's demands, then his Colts franchise will suffer the consequences: the loss of public support for his team and all that that implies. We've had it. Enough is enough.

16 comments:

guy77money said...

Once again the public gets the screw job! The Colts are going to be very lucky to get to the playoffs this year let alone finish with a good record. The average fan can't even begin to afford a seat. Please don't screw the taxpayer again, as much as it pains me to say this lets use the states budget surplus and bail these idiots out. One of these days we will get some politicians in office that understand the simple concept that states "Don't SPEND more money then you have!" But when in Rome...

Paul Ogden said...

Gary, the Colts seem oblivous as to the growing anger among city residents over the sweetheart deal they received. Do you think that to avoid people's anger, the Colt's plan is to be 12-4 and Superbowl contenders every year for the next 30 years? That's not a good plan.

Mayor Ballard needs to have some fresh faces sit down and take a look at the Colts contract and the whole set up at the new stadium In any negotiation, you need to find out where the opponent, and the Colts are an opponent, is weak and start exploiting those areas

Anything the Colts get now beyond the contract (and I'm sure given how this city is constantly giving stuff away) needs to be cut off. We need to start leaning on them. The Colts will come back to the table. The Colts need this city. We have leverage over them. We just have never had negotiators that understood the conept of leverage.

spooknp said...

Typical. Time to start thinking about new ways to not being forced to pay one's "fair share" to Ir$ay and all the other hacks making six-figures between themselves. Maybe it is time to raise income taxes on people who make over $500K/year 5-10%?

We have already lost one of our largest conventions. FFA will decide this year if they are going to stay or leave. Hopefully they leave. GENCON filed for bankruptcy, who knows how long that will keep going. I would like nothing more than a complete financial collapse of the city. The city needs to file bankruptcy and tear up that contract with Ir$ay.

Diana Vice said...

Thanks for the link to the article. The reader comments are better than the article, especially the one where the promoters of this are called "pin-stripe panhandlers" and "country club welfare queens." How true!

Zappatista said...

Thank you....not for outing this canary, but for getting back to Indiana politics. I will be honest, I can't handle your one sided view of national politics. THEY ARE ALL BAD! No one will do what they say!

At any rate, I have a much better opinion of this site when it is focused on local issues......

Downtown Indy said...

And we are still awaiting for resolution on the VIP parking lot/garage that is yet another demand of the Colts, for 'the stadium that wasn't built for the Colts.'

How much will THAT cost? Get the feeling there's a laundry list of 'oh by the way's waiting to be revealed to us?

Just like adding or raising taxes 'just a little' to pay for this thing, the unfunded/underfunded aspects of this monument to greed are trickled out, ostensibly so we see them a little at a time and don't get alarmed.

It's that old frog-in-the-pot analogy come to life.

willhdogowner said...

Gary-thanks for being on top of this; am i the only one that can't wait until the dolts leave the city? are people going to bars on 6home games a year really worth all this? makes me SICK! oh that's right, we don't want to upset mr irsay, he might go and candy up his nose and do tv interviews high again;

Michael said...

Where is the evidence, Paul, of the "growing anger among city residents"?

As far as I can tell, everyone has Blue Fever and we still have Blue Fridays and everyone is worried about Peyton's knee, the OL, and Sanders' recent injury.

Don't you think that any effort to strong arm the Colts (Irsay) at this point will do nothing but stir up the wrath of the Colts faithful who fear that the Colts will move?

I just don't see the outrage at this point among the city residents.

Not yet anyway.

And I don't think you will until they start losing.

Paul Ogden said...

Michael,

Everywhere I turn I hear complaints about the Colts organization and the sweatheart deal Irsay received. You aren't hearing those complaints? People are angry.

The arrogance of the Colts is reflected in the VP's comment in the Star article.

I would agree though there is a lot of forgiveness for a team that is a Super Bowl contender. Those days will end though.

Really I think for every one Colts fan that gets angry at the city for leaning on the Colts to renegotiate the lease, you'll have 10 residents, many of which are Colts fans, cheering the city on. I would risk the wrath of a few die-hard, see-no-evil Colts fans in exchange for the wide-spread community support that would come for finally standin gup for taxpayers.

small-question said...

I'm curious, and I keep asking this question because no one has yet to answer it. In order for the Lucas Oil lease to be reopened, don't both parties have to agree to it? Furthermore, the Colts' understandably aren't particularly interested in reopening a 30 year lease after just one year. Under what legal grounds could the city unilaterally break the lease without the Colts' consent? Are any of you privy to the actual document that was signed to the point where you could cite any out clauses the city would have? So far, I don't see anyone addressing these issues. For instance, considering this lease is a legally binding contract, is there a penalty clause written in there that would asses a fine to either party if they unilaterally tried to break the lease?

Advance Indiana said...

If you would read and stop being so small-minded, small question, you might learn something. The previous ironclad lease through 2018 was twice reopened and then discarded and replaced with this one-sided agreement. This has been explained on this blog on numerous occasions. If you don't think the public has any leverage here, you better go back to school and take another civics course.

Paul Ogden said...

Small,

You're being intellectually dishonest. Any deal can be renegotiated. It happens all the time, even though there is no legal "out" in the contract that could be enforced in court. As AI notes, it happened twice with the previous lease.

The question is the leverage of the parties involved. No, legally there might not be an "out" in the contract if they go to court, but that's not the issue. Leverage isn't limited to legal grounds to break a contract.

The fact is the Colts have a reason to want to stay on the good side of the city and its residents. Do they really want to turn City leaders and residents into an enemy? Absolutely not. They have an incentive to work with the City. That's called leverage.

Of course, you know all this and chooose to ignore it. You should change your moniker to "small-minded."

small-question said...

Wow, you people don't like to be challenged about this, do you? Yes, a contract can be renegotiated. However, if the Colts don't agree to renegotiate the lease, I don't think the city can unilaterally break the deal. Many contracts of this type have penalty clauses that prevent either party from breaking the lease unilaterally. I'm not saying that the lease can't be reworked, but under the current arrangement I find THIS deal will stay the same unless the Colts agree to renegotiate.

Remember the whole fight over the Sonics leaving Seattle? That involved a court interpretation of the escape clause in the lease. Are you really suggesting that the city should go to court to have a 30 year lease ripped up after just one year?

As for the "leverage", I think the Colts probably hold the upper hand. They are going to have the lease on their side. Unless the city plans on deliberately not holding events/conventions in the stadium, the Colts aren't really going to be losing any sleep about their revenues.

Additionally, I highly doubt that angry bloggers in Indianapolis will affect the take of the merchandise and television dollars that the Colts will receive from the NFL.

Look, it wasn't a good lease deal at all. I have NEVER disagreed with that premise. However, I think that it's foolish to think that the city really has the power to rip up a lease with 29 years remaining on it, no matter how angry Advance Indiana is about it.

You want to make Indy a better place? Improve the cultural amenities and change some of the attitudes that are stuck in the 1950's. It's not a coincidence that most college graduates from Indiana flee the state before the ink dries on their degrees. The lack of a diverse, college educated population in Indianapolis keeps business from setting up shop here to begin with. Maybe you all should work on that before wasting all your time picking a fight with one of the few businesses left in Downtown Indy.

Downtown Indy said...

Folks, 2010 will be an, um, 'interesting' year for NFL football in these parts. That's when the salary cap goes away. Thus, it's the year that Irsay needs beaucoup bucks to retain any semblance of a competitive team.

Yeah, should be interesting...

But maybe all this cash flowing to Irsay was engineered to funnel enough cash to the team's coffers in advance of the cap being lifted.

That's the ONLY plausible explanation I can think of for ANYONE to lay down and be steamrollered by Irsay. Even the lowest cheatin' scoundrel should have a smidge of pride - enough to not give up EVERYTHING like was done in this deal.

straight up said...

Don't be surprised if one day the Colts, under the ownership of Jim Irsay, bolt for whichever municipality buys into the "World Class City" mentality of having an NFL franchise. After all, his father Robert stated to Baltimore fans numerous times the team was HIS and to Hell with the fans whose entertainment dollars supported the teams' success/existence in that city (under Carol Rosenbloom, NOT Irsay)

That fact, although 24 years old, is why I've never warmed up to the team. Those in this town who think the ownership of this or any other pro team is their best friend..well...think again. Give the NFLs'm marketing strategy their due tho, for brainwashing the public of the "importance" of their teams.

Yes, I am aware that numerous Colts players can and have done several charitable acts, and they should be commended. My problem isnt with them, but the arrogance of their owner for being publicly subsidized and having the audacity to not give a damn about the harm it has inflicted on those majority of citizenry who never wanted their money to be paid for entertainment purposes they cannot afford, with involuntary taxation like the food/beverage, etc.

Vote ALL the bastards out who did this to You and Me ! If I was a challenging candidate for state office, esp now, I would use this hot-button item as a dagger against the incumbent legislators who supported this folly.

Downtown Indy said...

Surely we've given enough money to Irsay that for him to payoff whatever penalty it would impose and move elsewhere is NOT going to be a financial loss for him.

Imagine that - we pay the Colts so much to entice them to stay, that we actually have given them the cash they need to buy their way to another location.