Sunday, June 06, 2010

Pacers Still Have A Friend In The Star

I've long since given up on expecting any objectivity from the Indianapolis Star when it comes to the issue of asking average taxpayers to dig deeper into their pockets to subsidize the lifestyles of the state's two wealthiest families, the Simons and the Irsays, in order to support their professional sports franchises. Today is no exception. Once again we are treated to a load of crap on the editorial pages telling us why we should give the billionaire Simons a helping hand with $15 million a year more in public aid while we close schools, lay off teachers, cut bus services, contemplate closure of libraries, close public pools, shorten the season for those pools that are still open and slash funding for our parks. The "Conversations" page, which is supposed to share the perspective of both sides of an issue, gives us a half-page column from former Indianapolis resident and good friend of the Simon family, Mark Rosentraub, to supposedly explain from one person's point of view from afar why it is important we not fail to give Herb Simon $15 million a year more for his failing NBA franchise.

Rosentraub is a former economics professor at Indiana University and supposedly an expert on the economics of sports. Apparently he has decided to discard decades of objective research by himself and others who've studied the issue and come to the conclusion that investments in professional sports teams do not pay off economically. If you weren't so angry by the time to you reached the last paragraph of Rosentraub's dribble that you tore up your newspaper (I know. Most of you gave up your subscriptions to the Star long ago), you really missed out on an opportunity to have a good laugh at Rosentraub's expense. "I still own a house in Marion County, and I know what that investment will mean for my property taxes," Rosentraub writes. Either Rosentraub doesn't own a house in Marion County or he has never read his tax bill because if he had, he would know that the CIB and the facilities it supports are not funded by property taxes. We've paid for those sports palaces with taxes on food and beverages, hotels, rental cars, cable franchise fees, some help from the Lilly Foundation and a lot of borrowed money. The taxing has never kept up with the borrowing, and we've torn down two sports facilities, Market Square Arena and the RCA Dome, without ever paying off the borrowed funds.

Nonetheless, for Rosentraub it all comes down to keeping our city from being known as "India-no-place." He seems to think businesses only choose to locate here if there is a professional sports team, oblivious to the closure of so many manufacturing businesses over the past three decades that used to employ generations of city residents with good-paying jobs. He obviously has never visited Austin, Texas sans professional sports teams and thriving economically. He also seems to think that people choose to live downtown only because there are two professional sports teams here. On that point, he could not be more wrong, and I know that as a downtown resident for the past 20 years. Sporting events hurt most downtown businesses that rely on foot traffic because people avoid the area like the plague when folks drive in from the wealthier suburbs to attend the high-priced events, clogging area streets, filling up parking lots and then quickly returning home to suburbia without stopping at an area restaurant for some food and beverage or shopping at Circle Centre Mall. People choose to live downtown to be close to work, and to enjoy its many amenities, including White River Park, the canal, museums, theaters, shopping, etc., all within walking distance or a short bike ride. Rosentraub, of course, cites to no credible economic studies to support his wild claims he takes time out of his busy Michigan job to share with us.

Equally as laughable is an editorial today entitled, "With some team effort, deal can be a win-win." The Star's editors are apparently privy to information that has not been shared with the public by the CIB. After all, it is an investor of sorts in Conseco Fieldhouse. Yes, that is a disclaimer that the Star editors have repeatedly failed to make in any reporting or editorializing on this subject. The Star's predecessor company invested in the Simons' Circle Centre Mall, along with other area businesses when it was first built; it's really your mall because it was built with your taxpayer dollars and is managed by the Simons rent-free, who get to keep all of the profits, but that's part of your civic duty as an Indianapolis resident. Instead of repaying money invested in the mall by the Star and other area businesses from the revenues generated from the mall, the CIB got their permission to redirect the money to Conseco Fieldhouse so your taxes wouldn't have to be raised as much as they would otherwise need to be raised to pay for a new palace for the Pacers to show off their stuff. The CIB has had to get several extensions from the investors, including the Star, to repay this loan because the funds haven't been there. The Star management approved of these extensions at the same time it has laid off a bunch of reporters, cut the pay of other staff and otherwise slashed funding needed to put out a credible daily newspaper.

Let me return to the point that I started to make. "Completion of a deal to transfer the operational costs of Conseco Fieldhouse from the Indiana Pacers to the city's Capital Improvement Board appears to be more of a layup than a long shot," the editorial begins. Okay, so that means millions of dollars more will need to be spent annually by the CIB, which is already operating with a structural deficit, having just taken out a $9 million loan from the state with plans to borrow $18 million more over the next two years. Does the Star know about a pot of money sitting out there just ready to be tapped that none of us have been told about? If such a pot of money exists, does it make sense to spend that money to subsidize the billionaire Simons instead of funding our libraries, parks and city bus services?  And does Dan Carpenter head up to the roof of the Star building and contemplate plunging to Pennsylvania Avenue below every time the Star pens another one of these wacky editorials? If it helps ease your pain any, the Star editors think the actual cost of taking over the operation of Conseco Fieldhouse from the CIB will be cheaper "than the $18 million that's been discussed." No, you didn't read that number wrong. The Simons increased the annual cost $3 million a few weeks back to sweeten the pot. The higher price tag to operate the much-larger Lucas Oil Stadium was $20 million. Go figure on why Conseco's cost would be nearly as high but don't expect any one at the Star to make an attempt to figure out that discrepancy for you.

And history repeats itself. The Indianapolis Tennis Center, which was built so the City could host a professional tennis tournament is about to meet the wrecking ball. A little west of there sits the IUPUI Natatorium, which was built as part of the City's ambitious plan to host the Pan-Am games back in the 1980s. It is in a complete state of disrepair and needs millions of dollars invested in it in order to keep national swimming and diving events coming back. IUPUI says it has no money to make the repairs, although it's been on a non-stop building boom for the past three decades. It wants the CIB to pay for those repairs, and the CIB seems obliged to help them out. Where the money comes from is anyone's guess. Maybe it just falls out of the sky.

10 comments:

dcrutch said...

Exposure to journalism in college and believing in it's necessity in free societies keeps me subscribing to the Star. But, at this point it's just about a religion, clinging to something that's nearly nebulous, certainly not practiced much in the current day.

I wouldn't mind going down what I percieve to be the wrong path so often, if we could have at least been exposed to a lucid even-handed presentation of both sides of the issue.

That's why blogs such as this one need your monetary support. Not just for exposure of both sides of the Pacers, but the water company transfer, Wishard, the CIB, election scheduling, council corruption, etc. If you don't like this blog, then support one you do like to get the information you won't get from a more diminished and partisan mass media. The blogs need your support or we won't hear about "it" anywhere.

Thanks for your work, Mr. Welsh.

Sean Shepard said...

Unless I'm going to a game, which is very rare, I avoid downtown on game night/day like the plague - absolutely. I also avoiding going downtown prior to 6:00 PM whenever possible to avoid the whole parking hassle.

Doing business, eating at a restaurant or whatever else is a lot more convenient in the 'burbs' because you park in a free lot that usually has open spaces that you can easily get in and out of. Going downtown means driving around the block a half dozen times wasting gas and spewing exhaust looking for an open meter (that isn't broken - parked at two of those last week and had find a new spot) before finally giving up and paying way to much for garage parking.

Government involvement in the sports franchises is just another form of economic interventionism. In any business if the marketplace is telling you that you don't have a viable enterprise because expenses (or player salaries) are too high, then the business must be changed, right-sized or develop a new model.

When government 'bails out' the endeavor, it prevents those actions from being taken by rendering those market signals not important as the downside risk in ignoring them is mitigated.

Downtown Indy said...

The best line in that article on the Star was :

"If the Pacers and Conseco are losing money, then a public investment to secure the future of both is needed."

Who in their right mind invests in known-losing propositions?

Downtown Indy said...

You have to read this, Gary:

Let private dollars pay for N.Y. sports facilities

Why has Rosentraub changed his tune?

In 1999 his position was:

"There are at least two important roles for the public sector in uniting the Yankees' interest in a new or improved ballpark and the desire of private sector investors to help the team while rebuilding areas of the South Bronx. First, the city of New York and the Bronx borough president should convene meetings between the team and interested private investors. Together, these interests may be able to achieve their objectives without a public subsidy to the team.

"Second, if any stimulus is to be provided, it should come in the form of reduced state sales taxes (for a period of five to 10 years) for new retail centers built in declining areas. That is all that is needed to ensure the attraction of investors who want to work with the Yankees and redevelop the South Bronx."

In 2010, his position has become:

"There is no easy solution. If the Pacers and Conseco are losing money, then a public investment to secure the future of both is needed."

Rosentraub also wrote a book entitled "Major League Losers: The Real Costs of Professional Sports And Who’s Paying For It"

Wish I had a copy of it, don'tyou?

Advance Indiana said...

Thanks, dcrutch.

Jon said...

We continue to pander to the super rich owners while our city and it's infrastructure crumbles and dies. Those uber rich owners will stay as long as their woeful pleas of poor me garner them a sufficient level of extorted dollars. Never mind the fact that the city is fiscally bankrupt our leaders will continue to kowtow to those owners until Indianapolis is a rotten hulk of it's former self.
In my opinion the city will fold to the Pacer's pleas; the city will state the same fallacious logic as always the perceived economic impact of pro sports.
Mr. Rosentraub what about the studies by other economists who continue to debunk the impact of pro sport? See Phil Potter(overcrowding effect)or Humphreys and Coates (Pro sports stadiums don't bolster local economies).

artfuggins said...

Sean, you sound as if you have a "burbs" mentality so that is where you belong.....There are many low priced parking lots available in the evening if you can't find a metered spot. If you prefer the chain restaurants of the burbs then you have the freedom to go there but why must you denigrate those who chose to socialize downtown.

Advance Indiana said...

If Ballard goes forward with his plan to privatize parking meters, you may no longer be getting free parking in the evenings and on weekends. The private operator takes the view that people simply swipe their credit card and forget how much it actually costs to park compared to when they are paying money on the spot to use the space. I can tell you that it is nearly impossible to find a parking space anywhere near Circle Centre Mall on weekends. I don't even waste my time looking any more. I pay the $1.50 for short-term parking in the garage.

Sean Shepard said...

Fuggins. I didn't denegrate people who live or work downtown. I merely suggested that I like being downtown, just hate going downtown. Mostly because parking is a hassle.

HOOSIERS FOR FAIR TAX said...

This morning on WIBC the spokesperson working on the current version of the multi-million dollar City Market renovation, said he didn't know where they funds were coming from, just that the Mayor was 'committed' to doing it.