Scores of businesses in and around Indianapolis are licking their chops in hopes of scoring a windfall from the city’s hosting of the Super Bowl on Feb. 5.The CIB's chief financial officer assures Olson there's no cause for concern because all the extra money from out-of-town visitors will generate more than enough in higher tax revenues from the hotel tax and the food and beverage tax to offset the loss.
But the city entity that manages Lucas Oil Stadium, where the game will be played, expects to lose money.
The Capital Improvement Board of Marion County is budgeting for total Super Bowl expenses of $8 million and revenue of nearly $7.2 million, leaving a loss of $810,000.
The largest expenditure is the $4 million CIB has agreed to reimburse the city for providing police security for an estimated 150,000 visitors. It also budgeted almost $2 million to pay full-time employees overtime and union members who have been hired temporarily.
CIB anticipates pocketing $3 million from the Super Bowl in additional tax revenue: $2.4 million in hotel taxes, $440,000 in food and beverage taxes, and $100,000 in auto-rental taxes.The additional tax revenues may be about equal to one month's worth of typical revenues collected by the CIB from these taxes, but you have to also consider that the CIB is losing convention center business that could have otherwise been booked during the two to three week lead-up to the Super Bowl that had to be blacked out in order to prepare for the event. Most of those out-of-town visitors will only be in town during the extended weekend of the Super Bowl in early February, which means a loss of hotel room night bookings during the extended blackout period. The CIB is turning over the convention center to the NFL free of charge, space that would have otherwise been rented out by paying conventioneers.
An additional $794,000 in collected taxes will be paid the state of Indiana to help pare down debt related to the cost of building the stadium and convention center.
The total tax revenue generated during the days surrounding the Super Bowl equates to what the board typically earns from taxes in an entire month, Huge said.
As I've also reported previously, a special tax break afforded to the NFL during the Super Bowl could mean a loss of tens of millions of dollars in tax revenues the city would have otherwise collected from this event. The CIB is giving up about $2 million in admissions taxes alone that it won't collect on ticket sales to the game. The NFL has also been given control of government-owned parking garages and lots that it will be allowed to rent out during the Super Bowl, and the NFL gets to keep the parking revenues generated during the event.
It goes without saying that the Super Bowl will be a boon to the hospitality industry in Indianapolis and Central Indiana. A true economic analysis of the event's benefit, however, has to take into account all of the public expenditures and tax breaks made in order to land the event to determine its overall benefit. I doubt you will ever see that analysis performed. I suspect that it would show that the true economic benefit is not nearly as large as touted by city leaders.