“When it comes down to it, it’s very frustrating,” Irsay said. “What you’re saying is, ‘Hey, we worked on this thing. Our word is good. We stand behind it.’ That’s what a partnership is about. It would be very hard to recruit businesses here if they thought as soon as they worked on a lengthy, comprehensive deal for 25 years or more that four or five months later people would be talking about … renegotiating.
“What’s going to happen? A year from now it’s like, ‘OK, it’s not good enough. What we agreed to in ’09 in May is not good enough. We need to talk to you again.’ ”
"People don’t want to look at the facts,” Irsay said. “Look, (former Mayor) Bart Peterson and (former CIB head) Fred Glass came to me and said we need a new stadium to go with the convention center. Will you guys take this risk? We did. It was all on our risk. If someone can show me someone else who put a hundred million into a building and doesn’t own it … that’s what I don’t understand.”
Did Jimmy Irsay put a $100 million of his inherited money into LOS? No, unless you count $50 million the CIB paid as a break-up fee to him for terminating the lease on the RCA Dome to enter into a new one for LOS, or the $50 million the NFL kicked in for the new stadium. Is Jimmy Irsay not telling the truth about wanting a new stadium. You bet. Back in the 1990s, Irsay had already been making waves to CIB insiders that the RCA Dome just didn't cut it. He wanted an open air stadium. Mayor Goldsmith had to explain to Irsay that he couldn't sell the public on a new stadium when the RCA Dome was barely more than a decade old. Goldsmith agreed to renegotiate the lease with Irsay in 1998. The deal gave Irsay's Colts $9 million a year in Dome-related revenues and required the CIB to spend about $20 million in improvements to the Dome. The Colts were required to stay in the Dome through 2014; however, beginning in 2007, the team could terminate the lease if it paid $11 million a year to the CIB to break the lease.
Soon after the 1998 lease agreement, the CIB began buying property at the site where LOS now sits. In 2002, Bart Peterson would deny that the land was being acquired to build a new stadium, but we learned that was a big lie. In fact, he began negotiating a new stadium deal as soon as word leaked out that Irsay might move the team to L.A. In 2004, the Indianapolis Star discovered through a public records request that design plans for a new stadium (sans retractable roof) had quietly been prepared at the CIB's request. When Irsay realized what a generous deal Mayor Peterson and then-CIB President Fred Glass were willing to negotiate with him, he added the demand for a retractable roof and the two dutifully complied, adding at least another $75 million to the stadium's cost.
Irsay now suggests that Peterson and Glass wanted a new stadium simply as an excuse for expanding the convention center. I'm not buying that. The two knew that convention center expansion needed to happen to generate more revenues to offset the added cost of a new stadium. They knew that conventions are what drive the hospitality taxes like the food and beverage tax and hotel taxes that support the CIB, not the stadium. If the City had a new and bigger stadium, it would need that many more conventions to provide added revenues to support the CIB. The problem is that the CIB has been operating on borrowed money for many years. When people use the term Ponzi scheme to describe what has been going on with the CIB's finances, they are not far off the mark. A series of carefully crafted financing schemes has provided the CIB with sufficient funds to operate, albeit courtesy of borrowed funds. The chickens are now coming home to roost and the CIB's back is against the wall.
Instead of doing a top-down investigation of the CIB's finances, Mayor Greg Ballard, who simply inherited the mess from the Peterson administration, is insisting on a series of new tax increases to not only help shore up the CIB's finances but provide more taxpayer-paid subsidies to the Indiana Pacers, who for the record, say they've never asked the CIB for a dime. Ballard has completely dismissed calls for an investigation, saying he doesn't want to lay blame or look backwards. That doesn't cut it for the taxpaying public. The taxpayers have a right to know why it costs four times as much to operate the CIB as it does the City's parks. When we can't even find enough money in the City's budget to open up all of the public pools at city parks, which have already been operating on a shortened season to cut costs, we can't ask taxpayers to give more money to the CIB.
Curiously, some City-County Councilors are publicly saying they won't vote for new tax increases for the CIB; however, they are wanting to give an equal amount of money that would otherwise be raised from new taxes out of state revenues by expanding the professional sports development area to include the new J.W. Marriott convention hotel complex and Circle Centre Mall. These councilors are acting as recklessly as Mayor Ballard. Either plan means taxpayers are rewarding the mismanaged CIB, which has been operating in virtual darkness for too many years. I don't care whether we're talking about state revenues or new locally-raised revenues, the notion that the CIB should receive more taxpayer dollars is simply wrong.
As I've repeatedly explained, the CIB does not own LOS. If it doesn't have the financial means to operate the stadium within its existing budget, which it knew when it signed the lease with the Colts, then it should turn the stadium back over to its rightful owner, the State of Indiana. Gov. Mitch Daniels and state lawmakers like Sen. Luke Kenley, who crafted the stadium construction deal, knew the CIB did not have sufficient revenues to operate LOS once it was constructed. Yet these same state leaders went ahead with the plan anyway. That plan required the state to kick in $16 million a year in state income tax revenues and tens of millions more from food and beverage taxes levied on the neighboring counties and Marion County. Let's see how efficiently the state can run the stadium compared to the CIB. And remember, the Colts claimed in its letter to fans this week that the CIB exaggerated the true costs of running LOS. That's even more reason to be skeptical when CIB leaders say they need another $20 million just to operate LOS. As for the Pacers, there is no contractual obligation to pay the Pacers another $15 million to operate Conseco Fieldhouse. The CIB has plenty of leverage with the Pacers should they decide to terminate the lease, including financial penalties ranging from $44 million to well in excess of a $100 million. The fact that the CIB decided on its own to offer this up to the Pacers even before a demand had been made from them is proof of the complete incompetence of the CIB leadership, all of whom should have been asked to resign yesterday.