More Pieces Of Ozdemir's Publicly-Financed Soccer Stadium Falling Into Place

Make no mistake about it, folks. With this past week's announcement by Ersal Ozdemir that he has landed a North American Soccer League franchise for Indianapolis that will commence with the 2014 season, there is another publicly-financed stadium on the horizon for Indianapolis taxpayers. Sure, the Mayor and the CIB are all denying it, but we've become all too accustomed to their Texas two-stepping ways when it comes to their endless and creative ways of finding reasons to continue pouring billions of dollars into the public support of professional sports teams as the end-all, be-all when it comes to the the economic development future of Indianapolis. For the public though, there's much more to worry about than just another publicly-financed stadium.

We're going to start with the Indianapolis Business Journal's publisher, Mickey Maurer, who lives next door to Ozdemir in a gated Carmel community and has decided to throw his weight behind the project. A little more than a year ago, Maurer began using his publication to bolster Ozdemir's image as a highly successful construction and real estate developer. The average person knew little about Ozdemir other than he was one of many persons Maurer's IBJ had previously anointed under its annual ritual of naming  "40 under 40" persons to be watched in Indianapolis until Maurer launched this public relations campaign on his behalf .

The introductory story emphasized Ozdemir's political influence and noted that he met regularly with Mayor Greg Ballard and his top staffers to discuss ideas. At one point in the story, the reporter described Ozdemir as a financially-sound "rising star" and "powerhouse developer" who has "never missed a loan payment." That claim seemed a bit odd coming from a publication owned by a mega-millionaire banker/businessman who seems to make it his business to know everyone else' personal business matters, particularly people who he considers competitors. I noted at the time a 2010 court decision, which could not have gone unnoticed by Maurer, finding that a company owned by Ozdemir was liable for $1.2 million it failed to pay to subcontractors for work they performed on several public library construction projects awarded to his company. Court records in Hamilton County also revealed that Ozdemir was sued for foreclosure by two different mortgage lenders in the past, and that he was a defendant in several other debt collection matters.

Last November, the IBJ began laying the groundwork for a public relations campaign to sell the City on a professional soccer team. In an article titled, "Executive backing push to launch pro soccer team," the IBJ revealed that Ozdemir was quietly putting together an investment group to launch a professional soccer team in Indianapolis. "A deep-pocketed businessman like Ozdemir is the type of investor that could give the effort instant credibility," the IBJ informed us. The IBJ wanted us to know that Mayor Greg Ballard, who has received tens of thousands of dollars in campaign contributions from Ozdemir, was fully supportive of the push. "Mayor Greg Ballard has made it a high priority to expand our presence in international sports, and soccer is one of the most popular sports in the worlds," Marc Lotter, the mayor's communications director told the IBJ.

Ballard has been very generous in helping out Ozdemir with city taxpayer dollars. He gave his Keystone Construction nearly $6.5 million to build a new mixed use parking garage project in Broad Ripple, awarded his company the role of construction manager for the ambitious city-financed City Way project and has awarded him other public contracts worth tens of millions of dollars. Ozdemir has also accompanied Ballard on at least one of many overseas junkets he's taken since becoming mayor. In 2009, Ozdemir traveled with Ballard and a small delegation on a 9-day junket to the U.K and Germany.

This past week, the IBJ would be the first to break the story on Ozdemir acquiring his professional soccer team franchise and tell us that he planned to officially launch the yet-to-be named soccer team at IUPUI's track and field facility until a permanent stadium could be built at another location downtown. The IBJ continued with its meme that Ozdemir was a "deep-pocketed investor" with the gravitas to pull off such a deal. In the latest edition of the IBJ, we learn that Ozdemir is eying two potential downtown locations.

The prime location for Ozdemir's 8,000-10,000-seat soccer stadium the IBJ tells us is the 8-acre site of the former Market Square Arena, one of the most valuable vacant downtown real estate parcels. The IBJ informs us that the Market Street site would prove to be the "more costly" of two potential sites Ozdemir may be considering, as if it believes the City would not simply give the land to him to develop a soccer stadium as we've seen happen time and time again in recent years with respect to private real estate development city officials deemed worthy of a public investment. A politically-connected developer, Mike Wells, tells the IBJ the deal would likely "be done in conjunction with other developments to make it sustainable." Wells notes the difficulty Ozdemir would find in getting a bank to loan him money. "A soccer stadium isn't worth much to a bank," Wells said. "The bank would value the land as if the soccer stadium weren't there." (emphasis added) So if a bank won't loan him the money, who will? And if he has such deep pockets, why does he need a loan?

Deputy Mayor Deron Kitner and Gov. Mike Pence showed up at a public announcement this week to laud Ozdemir for landing the new soccer franchise. Mayor Ballard was on another out-of-town junket in Detroit to push the use of electric automobiles. Kintner told the IBJ a soccer team was needed if Indianapolis wanted to be a "world class city." City officials claim Mayor Ballard has not yet been approached by Ozdemir about public financial support for a new stadium, but that's a bit hard to swallow.

There is a key link between Ozdemir and Ballard that cannot be overlooked. Ozdemir hired Ballard's first chief of staff, Paul Okeson, to work for his construction company. Okeson quickly helped Ozdemir land the $6.5 million for the Broad Ripple parking garage project and control of the purse strings for the City Way project. Ballard appointed Okeson to serve on the Capital Improvement Board right after he left the administration to work for Ozdemir. During Okeson's term on the board, the CIB briefly entertained proposals from private companies to manage the CIB's facilities, including the convention center, Lucas Oil Stadium and Banker's Life Fieldhouse. Ozdemir's Keystone Construction partnered with CB Richard Ellis and John Bales' Venture Real Estate in submitting a proposal to manage the facilities.

After the CIB made the list of respondents to its privatization effort public, this blog immediately demanded Okeson's resignation from the CIB, noting his obvious conflict of interest. One of the partners in the proposal submitted by Keystone Construction, John Bales, was later indicted along with two other business associates, for defrauding the state of Indiana while acting as its exclusive real estate leasing agent regarding the purchase of a building in Elkhart, Indiana in which he held a blind interest that was subsequently leased to the Department of Child Services. One of the indicted, Paul Page, recently agreed to plead guilty and cooperate in the government's prosecution of Bales and one of Page's other business partners. Former Marion Co. Prosecutor Carl Brizzi, another partner in the Elkhart real estate deal, is being investigated by the U.S. Attorney's office in Indianapolis as part of that investigation according to local news reports. The CIB quietly dropped the privatization move without much public explanation, although the CIB has recently discussed the possibility of hiring a private operator to run Banker's Life Fieldhouse instead of paying tens of millions of dollars to the Pacers to manage it.

As a CIB board member, Okeson played a key role in negotiating a bail-out deal for the CIB, which resulted in a higher hotel tax, additional subsidies from the state of Indiana and a short-term loan from the state. Soon after the deal was inked, the CIB announced it was awarding $33.5 million to the Pacers in additional subsidies as part of a 3-year deal. More recently, the CIB provided the Pacers another $10 million as part of a one-year extension of its earlier deal. Despite claims by CIB officials it desperately needed the state bailout money to avoid defaulting on its long-term debt obligations, the CIB is now sitting on a $65 million cash balance, even after giving $43.5 million to Herb Simon's Indiana Pacers. Yet it's seeking permission from the Indianapolis City-County Council to enact two new tax increases on admissions and car rentals that will generate a combined $6.7 million annually, money it claims it needs for operations, not debt service.

CIB President Ann Lathrop tells the IBJ that while she is aware of the planned soccer franchise, she has not pondered CIB involvement in it. I can assure you that she has indeed been involved in private discussions on this matter, along with other CIB board members and officials. I would remind people that the CIB began acquiring land for the construction of Lucas Oil Stadium many years before it announced plans to build a new stadium. Whenever officials were asked why they were buying parcels at the site of the current stadium, it would always claim the CIB was positioning itself for future expansion of the convention center. While it was true the land acquisition was part of a plan to expand the convention center, the public was left in the dark about the plan to tear down the RCA Dome for the convention center and use the newly-acquired land for construction of a new $750 million stadium financed by a new regional tax on food and beverages. Things are never as they appear when it comes to the CIB.

Interestingly, the Indiana Pacers are very supportive of the prospective addition of yet another professional sports team despite the potential competition it poses for ticket sales to its games. "Drawing another 150,000 to 200,000 people downtown in the summer time would be fantastic for our hospitality industry, downtown retailers and restaurants and for the overall strength of downtown," said Pacers President Jim Morris. Of course, billionaire Herb Simon's Simon Property Group operates Circle Centre Mall downtown and controls parking garages that could benefit from the added revenues from attendance at more sporting events downtown. The Indianapolis Indians, whose games would overlap with the soccer team's season, while not expressing an official opinion on the matter, is less than enthusiastic about the competition from a professional soccer team. The Indians' Chairman Max Schumacher has expressed concern in the past that the local sports market is being stretched too thin.

If anyone has any more information on any financial ties between Maurer and Ozdemir, I would appreciate hearing from you. In addition to being his next door neighbor and his number one fan, a company controlled by Maurer's son, Todd Maurer, Halakar Properties, contracted with Ozdemir's Keystone Construction to build a 10-story luxury condominium building at 3 Mass Ave. You can bet Maurer's National Bank of Indianapolis won't be risking any of its money on the construction of Ozdemir's soccer stadium. We're curious to know why Maurer continues to insist on representing Ozdemir as someone with deep pockets. When I think of people locally with deep pockets, I think of business people like Maurer, the Simons, the Eugene Glick family, Forest Lucas, Bloomington's Cook family or Merrillville's Dean White. Ozdemir is a relatively new immigrant to the U.S. from Turkey in an industry that has seen its share of ups and downs over the past decade during which he's even been a factor. He could not be rolling in money from profits he's made from his known business activities, even with all the generous public subsidies he's received from the palms of the politicians he's greased, and if he is, inquiring minds want to know from where the money came.

As a cautionary note to the leery, Chicago's Tony Rezko, an immigrant from Syria, popped up on the scene in Chicago in the 1990s and quickly emerged as a "deep-pocketed" real estate developer, who had all kinds of money to throw around to the politicians. He's now completely broke and sitting in a federal prison cell for the next decade after he was convicted on various public corruption charges, taking down a sitting governor with him. We learn from John Shaw, a former senior official in the Defense and State Departments, that Nadhmi Auchi, a billionaire former arms merchant for Iraq's Saddam Hussein, funneled more than $200 million through businesses operated by Rezko to spread around on business deals with political insiders in Chicago and to pander influence with Chicago's Mayor Richard Daley, Illinois' former Gov. Rod Blagojevich, and future president and then-U.S. Sen. Barack Obama, among others. Rezko was even seeking support from those same Illinois officials on the construction of a training facility that he planned to build in Illinois to train Iraqi security officials after winning a $50 million contract from the Iraqi Ministry of Electricity at the time he was indicted by federal prosecutors.

Against the Rezko backdrop, who did Ozdemir tell the IBJ was his mentor when he first got his start in business in Indianapolis a little more than a decade ago? That would be Beurt SerVaas, wealthy businessman, former City-County Council President and an ex-OSS officer with strong ties to the CIA. SerVaas' Bridgeport Brass Co. in the late 1980s contracted with Hussein's government to build a $40 million factory for the Iraqi government that it said was to be used for metal recycling but instead was used to produce artillery shells and gun cartridges. After the first Gulf War following Iraq's invasion of Kuwait, SerVaas testified before Congress that he had no knowledge the factory would be used to produce ammunition, believing it was going to be used for non-military purposes. And who can forget the most infamous person to whom SerVaas served as a mentor? I'm talking about his former son-in-law, convicted Ponzi schemer Tim Durham, who spread over $1 million around to Indiana politicians before he was finally nailed for defrauding more than $200 million out of small Ohio investors through his Fair Finance company. Always follow the money, folks. It almost always provides the answers for which you are looking and often confirms your worst suspicions.