He begins in his column by stating, "Most importantly, the agreement accomplishes all this without any additional tax increases." Come again, Greg. Didn't we just hike the City's hotel tax last year to one of the highest in the nation to raise more money for the CIB? Aren't we siphoning off additional state income and sales tax revenues for the CIB that could have gone to schools and other basic government services? And isn't the state loaning the CIB $27 million over three years when the State Treasurer is telling us that more than half of the State's surplus disappeared over the last year and will disappear entirely if state revenues don't start picking up?
Ballard thinks the "Downtown economic engine" is the end all, be all for the City of Indianapolis. He continues to make this argument while factories in the City continue to shutter, putting thousands of well-paid workers out of jobs and our best employer, Eli Lilly, is laying off thousands of employees as part of a downsizing effort. Whatever contribution the Pacers make to a few businesses downtown, it pales in comparison to the many businesses outside the immediate downtown area that really drive the economic engine of the City. Strangely, Ballard claims the give-away to the Pacers is necessary "to save jobs and grow our economic base." What planet is he living on? Does he really think the Pacers are a critical component of the City's economic base?
Ballard claims in his column that "none of the money is going to fund team operations or salaries." He simply cannot say that. He doesn't have access to the financial records of the Pacers that would prove or disprove how the money is being spent. As I noted yesterday, testimony in the Mel Simon family feud court debate over who should manage his estate mentions a $46 million loan that Mel had taken out for the team prior to his death that that Herb agreed to assume as part of a buy-out agreement of Mel's interest in the Pacers he reached just months ago. How do we know that Herb isn't going to use that money to pay off that loan?
Ballard makes another disingenuous claim of the fallout if the Pacers left. "If the Pacers left, the taxpayers would shoulder the entire $15 to $20 million per year to operate the building and jeopardize our ability to make the $18 million annual debt payment." First of all, could Ballard have not nailed down exactly what those operating costs are annually on Conseco Fieldhouse before inking this deal? At first, the Simons claimed the costs were $15 million a year. They later increased that number to $18 million. Now Ballard is telling us they range anywhere from $15 to $20 million. That's a 33% variance and is further proof Ballard made no attempt to learn the actual costs of running Conseco Fieldhouse. I've heard several building management experts doubt that the annual costs are actually that high. I'm told $10 million is a more believable number, and that's probably on the high side.
What Ballard conveniently leaves out of his analysis of the impact of the Pacers leaving is the fact that the City would then get to keep all of the revenues Conseco Fieldhouse brings in from concerts, circuses, religious gatherings, conventions and other sporting events. Further, the costs of operating the fieldhouse are likely to be much lower if the Pacers and Fever no longer are playing there. The City will also get millions of dollars in parking revenues it has been giving up to the Pacers. More importantly, the Pacers would have been required to pay a penalty in excess of $130 million if it sold the team and moved to another city. Hell, the CIB could nearly retire its debt on the fieldhouse from the penalty payment.
Ballard credits downtown as being the catalyst behind "nearly $1 billion in sales tax revenues for the state, and tens of thousands of jobs" directly or indirectly related to the City's convention, hospitality and athletic activity. Previously, Ballard has tossed around a figure in excess of 60,000 jobs as being created by the downtown convention and sports teams. In fact, most of those largely low-paying service jobs are outside the downtown area and are not directly related to the convention or sports-related activities, although they collect a significant amount of the taxes that benefit those facilities exclusively.
On the revenue side, Ballard tries to make the case that $55 million will be lost to the local economy if the Pacers leave. That figure has been thoroughly discredited by any objective expert who has reviewed that useless study the CIB commissioned earlier this year to make the case for this huge taxpayer give-away. First of all, most of the players who are paid high salaries by the Pacers don't even live in Indianapolis. They spend their money elsewhere. As for the money spent on Pacers games, those are discretionary entertainment dollars that will be spent elsewhere. Jim Morris, CEO of Pacers Sports & Entertainment, suggests there would be no Indianapolis Symphony but for the Indiana Pacers. What is he smoking? The symphony would likely benefit if the Pacers left down and stopped draining away corporate donations from them. Individuals and businesses will still spend that money and other cultural, entertainment and businesses will reap the benefits from the shifting of those discretionary expenditures.
To Ballard, this government give-away to one of our state's wealthiest citizens is essential to preserving "our status as one of America's top tier status." For someone who was born and raised in Indianapolis, Ballard sure is ignorant about what actually raised the status of Indianapolis. It's called the Indianapolis 500, one of the largest attended sporting events held annually in our City. It was that racing event that put Indianapolis on the map and continues to contribute far more economically to the City of Indianapolis than the Pacers. And how much of our money have we given to the Hulman family to operate the world's largest and most prestigious auto racing track in the world? Zero. Not one penny.
UPDATE: Apparently Dan Carpenter shares my views about this give-away to the Pacers and the debate that has surrounded. He writes, in part, in his Sunday column:
The notion that Indianapolis--one time transportation hub, erstwhile jazz mecca, proud bearer of literary tradition and historical home of good jobs--was a poor cousin waiting all these decades for billionaire redeemers is part of a strategy called setting the terms of the debate . . .
For instance, there's no quarrel from the mayor's office or the business leadership that Herb Simon is losing money on the Pacers, that he can't draw from his other enterprises, that he can't massage his losses through tax accounting, that his costs for operating Conseco Fieldhouse are X. The taxpayers are an open book, while the for-profit beneficiary of public funds lets us take his word for it . . .
The economic value of a fair-sized factory is far greater than that of a sports franchise to a city, and the former is not without its intangibles as well . . .
So we're not Seattle. We're not New York or New Orleans. We're being asked to buy what they've got, and it's not available for any price, including the bargain rate of $33.5 million. I may not be telling you anything you don't know, but I certainly stand in violation of the terms of the debate. Mea culpa, mea culpa. Go Pacers, and I mean that.