That's not all. The amended bill also expands the area covered by the MID from just the track to include "adjacent property related to the operation of the qualified motorsports facility, and owned by the owners of the qualified sports facility." The Hulmans must have been concerned it wouldn't allow them to spend the public's money on its golf course, parking lots and other adjacent property it owns around the IMS. There's been some talk of building a hotel adjacent to the IMS to replace the former 96-room motel the Hulmans operated next to the IMS for many years but closed and demolished in 2009. The taxpayers will probably wind up paying to build that, too, if that comes to fruition.
An interesting aspect of the legislation is that it specifically provides that no mortgage or lien may be attached to the land or improvements by the bond trust indenture, which will have only a pledged or assigned interest in the tax revenues captured by the MID and rentals, receipts and income from the leased capital improvements. I'm not sure what impact that will have on the interest rate the bonds are sold for in the market, but I suspect it won't have a positive impact. The legislation, as written, still allows the IMS to use the proceeds from the bonds to refinance existing debt, which I suspect has a lot to do with this theft of public funds. The taxpayers are simply being asked to assume a bunch of debt the Hulman family accumulated as a result of bad business decisions they've made in the past concerning the operation of the IMS. Another thing that I distrust is the calculation of revenues that are captured by the MID annually. You essentially have to trust the Department of Revenue to allocate the proper amount. The legislation allows up to $5 million of tax revenues to be captured by the MID. For all we know, the amount certified will just automatically be the $5 million capped by law. I think that's essentially what happens with the downtown sports district, which captures $11 million annually, the maximum allowed by law.
UPDATE: The Indianapolis Business Journal has both a lead story and an editorial on the $100 million IMS subsidy. Anthony Schoettle's news story is indistinguishable from the editorial, which tells you how much credence you should lend to it. The meme is pretty much that the IMS is a fallen and broken down trash heap that doesn't even come close to the beauty and amenities offered by newer, albeit but much smaller and lesser-attended tracks in other cities. It kind of reminds me of the elitists who see little value in preserving Wrigley Field in Chicago as the playing venue for the Chicago Cubs. I'll mix some pieces of the story and editorial and let you guess which is from the editorial and which is from the news story.
The Indianapolis Motor Speedway will need far more money than it will get from a proposed state tax subsidy if it hopes to be in the top tier of U.S. racing venues, sports business experts said . . .
The sprawling facility needs extensive renovation and improvement, possibly more than IMS officials want to admit . . .
Under new Hulman & Co. CEO Mark Miles, IMS appears poised to part with long-held traditions--including refusing to sell naming rights--to achieve state-of-the-art status . . .
In spite of hosting the Super Bowl, numerous NCAA Final Fours and quality professional teams, Indianapolis still is known for the track . . .
Race fans seem more interested in the facility itself than what it's called or where ads are placed . . .
One racing industry executive (unnamed, of course) called the IMS' condition "horrendous." . . .
"Indianapolis has not had anywhere near the level of investment expected by the fans at other facilities like Daytona, Charlotte and Las Vegas," said Just Marketing's Zak Brown . . .
This is the first time the IMS has asked for a public handout . . .
The Indianapolis Motor Speedway has good will to spare . . .There's not one dissenting voice or word of caution towards, or any analysis of the public policy behind such public financing of totally private businesses like the IMS. There's not one mention about how bad attendance has been at some of those so-called state-of-the-art race tracks in recent years. It's not unusal to see as much as two-thirds of the stands empty at some of these so-called better tracks, and I've watched many races over the past several years on TV and been able to observe this. I've attended every 500 race since 1992 at the IMS. I've witnessed a rebound in attendance in recent years after many years of declining attendance despite these "horrendous" conditions described by the so-called experts. I've actually thought the Hulmans, overall, have done a good job maintaining and updating their track over the years. They've particularly been at the forefront in making improvements to enhance safety for drivers and fans. They've also invested a lot of money in additional suites that the big corporate types insist on having. The main drawback at the IMS has always been the fact that because the track is so big the fan viewing experience is limited to that small portion of the track in front of them.
Without batting an eye, the IBJ even throws out that the IMS plans likely include raising $15 to $20 million a year in revenues on its own simply by selling naming rights and other advertising opportunities at the IMS. The news article only details $60 million in planned improvement, including $20 million for lights, $15 million for grandstand upgrades, $15 million for video boards and $10 million in ADA improvements, with pledges by the Hulman family to match about $2 million in spending each year for every $5 million paid by taxpayers to make these improvements. The IMS, including all of the surrounding land owned by the Hulman family, is currently valued at under $90 million; however, the IBJ suggests they'll have to spend at least $200 million on upgrades if they want to have a "state-of-the-art" race track. Naturally, the IBJ covers up the fact that this plan is really a bailout to cover the more than $150 million losses incurred by the Hulman family from its failed Formula One riverboat gamble.
As an aside, IBJ owner and publisher, Mickey Maurer, whose name IU Bloomington law school alum wince that they must now refer to as their law school, has a column in today's edition where he tells his readers that former U.S. Rep. Mel Reynolds deserves a second chance to serve in Congress. Reynolds is one of many candidates seeking the seat being vacated by Reynold's successor, Jesse Jackson, Jr., who pleaded guilty to stealing campaign funds yesterday, along with his wife, a former Chicago alderman, some of which he spent on his mistress. Reynolds succeeded in Congress former U.S. Rep. Gus Savage, who was convinced not to seek re-election after he was accused of sexually harassing a female government official during an overseas junket to Africa. Reynolds, for those of you who don't recall, was found guilty of molesting an underage girl, along with stealing campaign funds and not paying taxes on income he earned. He got lucky and got a free get of jail card when former President Bill Clinton sprung him from a federal prison cell with a presidential pardon, along with a bunch of other miscreants who had done political favors for the corrupt former president. Maurer once personally hosted a fundraiser for Reynolds in his home and boasts what a wonderful man he is. He obviously never knew the man that those of us who worked in Illinois politics knew--unless the more corrupt you are, the more Mauer likes you. He is a big fan of Mitch Daniels, after all. What a shame a fine publicly-funded legal institution must bear his name because he threw a few millions bucks he'll never miss their way.