Monday, July 13, 2009

Lucas Oil Success Translates Into Higher Costs For Taxpayers

The Star's Dan McFeely has a story today entitled, "Lucas Oil Stadium Has Shown Success In Bookings." His story focuses on the ability to book 155 events during its first 320 days of operation. That translates into more money for Colts' owner Jim Irsay and higher costs for taxpayers. You need to check out the sidebar to McFeely's story to get into those nitty-gritty details. Unlike the RCA Dome, all of the revenues generated from the stadium go to the Colts, and taxpayers get stuck footing the bill for all of the expenses, which are close to $15 million a year higher than the RCA Dome:

According to the CIB's 2008 budget, operating expenses rose by about $14.9 million, or 26 percent, when the new stadium opened. Meanwhile, operating revenues decreased: The new contract with the Colts forced the CIB to give up about $3 million in game-day concessions revenue, $1.3 million in advertising income (when the Lucas naming rights went to the Colts) and $2.5 million in labor reimbursements because of an agreement that calls for the CIB to pay all game-day security costs. And the light bill went up about $1 million.
The sidebar to the story suggests some of those costs were offset by capital contributions from the Colts of $102 million. That's bullshit. The Colts kicked in nothing for the new stadium. Half of that money came form the break-up fee for the old lease, which taxpayers had to cough up and then the Colts graciously agreed to forgive, a little shell game the CIB played to make it look like they were contributing something. The rest of the money came from the NFL, not the Colts. The sidebar also suggests the CIB is getting more revenues to pay for those expenses from the taxes that were raised to build the new stadium. Something doesn't add up there. When the stadium deal passed, the state legislature and the governor refused to agree to allow any of those new revenues to be used to pay for operating expenses; all of the revenues were to be used exclusively to pay down the debt on the bonds.

The sad part of this saga is that taxpayers are financially better off if the stadium sits empty all but those 10 days a year the Colts are playing in it. Even worse for local groups is the near-doubling of rental charges for using the stadium, 13 cents per square foot versus 24 cents per square foot. McFeely's story also fails to discuss the subsidies taxpayers pay to groups through the ICVA to host their events in Indianapolis because our costs are too high. For some reason, the Star doesn't want its readers to know this dirty little secret.

12 comments:

jabberdoodle said...

Its a fortunate coincidence for the pro-CIB bailout folks that the Star assigned Dan McFeeley to the story. He has not been one of the reporters following the numbers as this train wreck has evolved in slow motion. If you notice in another sidebar, even after he reported a shortfall of only $14.9M, he jumps immediately to the $47M shortfall total as scripted by the CIB -- assuming he wrote the sidebars, too, of course.

And what on earth was that statement : "When you include depreciation on the building itself, Lucas Oil Stadium lost $12.7 million in the first five months of this year." ???? Depreciation ??? Now the taxpayers are on the hook for depreciation ??? They apparently are at the bottom of the barrel in trying to sell the tax increases to the public. They obviously have no respect for the intelligence of the public.

Downtown Indy said...

McFeeley's sidebar suggests each 'day not in use' incurs around $4200 in costs. He ignores the $35,000 or so in debt service (If you take $1.2B over 30 years, and divide that for a per-month figure).

You don't cover your costs with 1 or 2 birthday parties or business lunches, but they count those piddling events as 'days in use' when they brag about utilization of LOS.

Paul K. Ogden said...

Jabber, I agree. Depreciation should not be included in the operating costs, but rather concerns the value of the building itself. The building is being paid for by the State using local food and beverage taxes.

I'm not sure why they would have McFeeley do this article since he's unfamiliar with the numbers. He doesn't even both to mention the fact the Colts get half the revenue off of non-Colts events at LOS and swallowed hook line and sinker the Colts bogus claim regarding the $102 million. Even then the $102 million would have nothing to do with operating costs, which is the problem.

Advance Indiana said...

Brendan O'Shaughnessy is out at the Star so I suppose his work had to be passed on to one of the few reporters remaining in the newsroom.

Downtown Indy said...

Probably right, AI. But Dan is best known for chronicling his gastric bypass surgery over many months.

I have seen his name on other stories, but danged if I can recall one that would be called investigative rather than lifstyles or advertorial in nature.

I think he just got tossed into the deep end of the pool. Hope he can swim.

jabberdoodle said...

O'Shaughnessy's OUT?? Say it ain't so !

Advance Indiana said...

Ruth Holladay reported that O'Shaughnessy went to work for Notre Dame.

jabberdoodle said...

Newspapers don't exactly scream 'job security', do they?

Unigov said...

The front page of the Star today looked like Pravda.

EVERYTHING IS GREAT

(ignore the debt load and graft)

Citizen Kane said...

It is sad to imagine that the newspaper reporting could actually get worse. That sadder thing is that many people who read it actually believe that it is all true, particularly when it does not upset their world view - that the Colts can do no wrong.

Advance Indiana said...

The rapid destruction of American's great newspapers is a real threat to our democratic representative government. Newspapers have provided an important check on the power of government. TV news has become entertainment-driven and short on content. People, in general, are so stupid today about what is happening that it is a cynch for corrupt politicians to lie and steal from us. The public education system has thoroughly succeeded in dumbing down the U.S. population to its lowest point in our country's history. The burden has fallen entirely to citizen activists to protect the Republic. I'm very skeptical about whether it can be saved.

Jon E. Easter said...

There's not a better stadium than L c s Oi S d u

At least...that's what the sign still says until the fix it.