Tuesday, April 28, 2009

Grand: Bankruptcy Should Not Be Used As A Threat By CIB

Last month, CIB President Bob Grand threatened to close Lucas Oil Stadium if the legislature didn't approve a $48 million a year bailout for the CIB. Last week, CIB Treasurer Ann Dillon told a legislative committee considering the bailout that the CIB would have to begin cancelling conventions at the Indiana Convention Center if a bailout deal is not approved. And for the past several months, we have been bombarded with "sky is falling" rhetoric from the entire CIB leadership, including Mayor Greg Ballard, if a bailout plan is not approved. Grand, however, draws the line at a suggestion of bankruptcy. "CIB President Bob Grand said he hasn't spent time considering whether bankruptcy would allow the agency to renegotiate with the Colts because he did not want to use it as a threat," the Star's Brendan O'Shaughnessy reports. "There are too many unanswered questions right now for me to shoot from the hip," Grand said.

Now that Jimmy Irsay has spoken, Mayor Ballard has changed his tune on asking the Colts to contribute money to help bail out the CIB. O'Shaughnessy writes, "Ballard last week said he has the same concerns as Irsay about reopening the Colts' lease. Ballard said the Colts should not be "demonized" for holding to their contract with the city." "I'm worried about the precedent it sets," Ballard said. "It could send chills down the spine of every business that does deals with the city." O'Shaughnessy adds, "Rather than try to reopen its 30-year contract with the Indianapolis Colts, the city might ask the team to donate money to area arts and culture groups now supported by the struggling Capital Improvement Board."

What is really sending a chill down the spines of taxpayers is the fact that not a single politician in this debate is standing up and fighting for the taxpayers' interest, save Libertarian Indianapolis City-County Councilor Ed Coleman, who is no longer a Republican because members of his own party opposed his efforts to get to the bottom of the CIB mess.

Let me repeat, opposing tax increases to bail out the CIB but looking for alternative ways of sending the same amount of money to the mismanaged entity is not an acceptable solution. The politicians who are advocating this route want their cake and eat it too. The CIB can't afford the lease agreement with the State of Indiana for LOS. The answer is pretty simple. Give the stadium back. Local politicians oppose this option because they fear control over the distribution of all of those free tickets to the games, which are controlled by the CIB and the Mayor, will shift to Governor Daniels.

Disappointingly, local news media reports have ignored the free ticket scam that allows politicians to be bought off using your tax dollars. Let's see who is getting free tickets and using suites controlled by the City and the CIB at LOS at Colts games. Let's learn who is footing the bill for that free entertainment. Let's find out whether politicians are reporting all of those free gifts on their statements of economic interest. You would be surprised how some politicians' thinking changes once they are doled out free tickets to Colts games. The CIB learned this early on and bilked it for all its worth.

See Star business columnist John Ketzenberger's latest pitch for the City's downtown elite here. In case you missed it, they're setting up Mayor Ballard to take the fall if their CIB bailout fraud fails.


Paul K. Ogden said...

The art of negotiating is to understand the concept of leverage. Even if bankruptcy were not something that would be used, it should be on the table. When the CIB takes it off the table, they lose their negotiating clout.

Bob Grand (and other city leaders) remind me of someone who goes to a car dealership and tells the salesman at the outset that he is not leaving the lot until he buys a car. The leverage you have to negotiate a deal at that stage is practically gone. They know you're not going to walk away without buying a car. Walking away is leverage.

jabberdoodle said...

I like that analogy Paul.

Council President Bob Cockrum was at a neighborhood meeting last night where the question was raised, what if the CIB doesn't get the money it wants? One of Cockrum's responses was that we could give the LOS keys to the state and let them run it.

I do continue to hold out the notion that bankruptcy for the CIB could damage the bond rating for the City. That said, I can't help but thinking that Grand doesn't want to talk about bankruptcy simply because he links it to this blog.

M Theory said...

What I find amazing is that these politicians lives are so lame that they will commit these atrocities against taxpayers for tickets to a suite to watch a ball game.

I've been to the Colts, Pacers and Indianapolis 500 suites before with different guys I've dated. It was ok. The roast beef was good. Mostly the people got on my nerves because they were plastic.

Quite frankly, I've been to better house parties.

These politicians really must have empty personal social circuits to sell us out for so little.

Paul K. Ogden said...


Actually I don't think Gary Welsh has ever advocated bankruptcy. He's talked about turning LOS back to the city, which is also a possibility. I'm not as familiar with Gary when it comes to the ramnifications.

Regardless you take any option off the table and it's a loss of leverage. You don't do that.

Gary R. Welsh said...

That's correct, Paul. I've said all along I think the CIB should turn the stadium back over to the state and wash their hands of that liability. It makes so much more sense than a bankruptcy or a bailout.

jabberdoodle said...

I stand corrected.

Jon said...

So the CIB gifts 15 million to the Pacers, unasked, and per Bob Grand that constitutes negotiation, right Bob? Perhaps Mr. Welsh is correct, deflect the issue by relinquishing LOS back to the state. While the state would be on the hook for LOS that doesn't fix the CIB or the egregious contracts they have given to the owners.

Jon said...

Give LOS to the state and that may fix Lucas's maintenance but the CIB problem remains. Who fixes the convention center and Conseco issues, the same group who got us into this hole. I'm not fond of putting off things that should be fixed now and hope that someone later will pick up the pieces.

guy77money said...

What all these idiots do not understand (a complete failure in most boards that deal with money) is whose money is it? If only they would ask themself a couple of questions. If this was my money would I use it to finance this project? Will this make a profit or if no profit how much will it cost? What benefit will this be for the community at large and is it worth the risk and cost? No these questions are rarely asked or even thought about. It mostly about the board members self interests and egos. The board members with their self interest at heart then push with all their might to make get what they want. Whats the quote.. Never appeal to a man’s “better nature.” He may not have one. Invoking his “self—interest” gives you more leverage. If only CIB board had the city's taxpayers in mind when they were making these insane deals we would all be so much better off.

Downtown Indy said...

guy77, they know exactly whose money it is and that's why they are so reckless with it. It's not THEIRS, it's other people's money, In fact, the more reckless they are with OPM, the more they make for themselves. Pretty neat, huh?