Monday, July 16, 2012

CIB Planning To Give More Subsidies To Pacers

Their owners are billionaires. Working class folks are struggling through the worst economic downturn since the Great Depression. The City of Indianapolis is struggling to pay for basic city services, including public safety. Yet the Capital Improvements Board is preparing to fork over more subsidies to the billionaire owner of the Indiana Pacers based on a complete fabrication by its owner that the NBA sports franchise is losing money. The Indianapolis Star notes that the CIB has now given all of the $33.5 million in additional subsidies it agreed to provide the team in 2010 as part of a 2010 agreement to keep the Pacers in town, notwithstanding a lease provision that would have required the Pacers to pay a much larger penalty if it broke its long-term lease agreement for the Fieldhouse. And yes, it's time to fork over more money to the team.

For the next round, the city's chief negotiator will be CIB President Ann Lathrop.
She said "hard negotiations" with the Pacers haven't begun yet, but she hopes to have a new deal hammered out before the current deal expires. Any terms are likely to meet some resistance in the City-County Council. The new majority Democrats were among the strongest critics of the 2010 pact.
The Pacers' overall tenant agreement at the fieldhouse lasts through 2019.
Obviously, the Star's reporter has learned nothing about how the CIB conducts business when he asks a stupid question of Lathrop about the CIB needing city-county council approval.

I think we have to consider what our options might be. You need to remember that we do have the ability and authority to go back to the council and ask for additional appropriations after the calendar year has started. And so the question is, would we want to estimate what we think might actually happen, or do we want to wait until we might actually know?  
I don't have a deadline. I really -- kind of like the last time -- I think we need to kind of really look at everything that's on the table facing the CIB.
Recall that the CIB manufactured a budget crisis a few years ago, which allowed it to sucker the state legislature and the city-county council into providing the CIB tens of millions of dollars more in annual revenues through state subsidies and new local taxes. The CIB claimed these additional revenues were needed simply to continue to maintain solvency for the municipal corporation. The CIB and the city-county council claimed the money would not pay for additional subsidies being requested by the Pacers. No sooner had the ink dried on the deal than the CIB was suddenly flush with cash and had more than enough money to spare to provide a 3-year, $33.5 million subsidy to the Pacers. The CIB signed the three-year agreement with the Pacers before seeking council approval. The first year's funding was not included in the CIB's budget but had already been paid out before the CIB went back to the city-county council to seek approval of the 3-year deal. The city-county council was told it either had to approve the 3-year deal or risk losing the Pacers to an imaginary city. The city-county council naturally bought the lie hook, line and sinker.

About a week ago, the CIB announced that it was mulling whether to sell the Ober Building at 107 S. Pennsylvania, a building the CIB purchased in 1999 even though it didn't need it simply because it wanted to control more property near the site of the then-new Fieldhouse taxpayers built for the Pacers. I'm sure the billionaire Simons have already laid claim to whatever proceeds the CIB nets from the sale of the building. The NBA owners reached a new collective bargaining agreement with the players that yields a lot of additional revenues to the Pacers every year, but you can bet that won't factor into these discussions. As always, the Pacers will not be required to provide audited financial statements that prove they are losing money. We'll just have to take the team's owner at his word. The Pacers, incidentally, just signed a 4-year contract with Roy Hibbert worth $58 million and a separate 5-year contract with George Hill worth $40 million. The only lesson learned here is that it pays to lie.

4 comments:

Indy4u2c said...

It's time to tell the Pacers to either pay their way or leave town! There is no reason for taxPAYERS to have to subsidize those millionaires, especially since time & again they act like street thugs.

Mary Roger Bowser said...

SURPRISE!

Paul K. Ogden said...

Indy, I don't like it when people cite as a reason that these million dollar taxpayer subsidies for billionaire sports owners as not being justified because their record is poor and/or the players act like thugs. They are NEVER justified. I don't care if the team is undefeated and the players sing in the church choir and read to the blind.

Indy4u2c said...

-Point well made, Paul! Touche!