Wednesday, August 28, 2013

CIB Prepares To Gift Another $21 Million To Billionaire Herb Simon's Indiana Pacers While Mayor Demands Taxpayers Pay More For Fewer City Services

It's a continuation of the crony capitalism that has come to symbolize the City of Indianapolis and, in particular, the administration of Mayor Greg Ballard. Taxes for the little people keep getting raised, and higher fees and new fees are being levied against businesses and individuals, who in return receive fewer city services for their government-mandated contributions. At the same time, the supply of money available to give away to the wealthiest and politically-connected it seems is without limits. And so it comes as no surprise that news comes that the CIB plans to give away another $11 $21 million to billionaire Herb Simon's Indiana Pacers, a franchise he bought with public assistance for about that amount in the 1970s, which is now worth almost $400 million. From the IBJ:
The Capital Improvement Board of Marion County is prepared to give Pacers Sports & Entertainment another $11 million to offset losses from operating Bankers Life Fieldhouse.
CIB President Ann Lathrop said Wednesday afternoon that the $11 million payment could be delivered in July 2014, after the current agreement with the Pacers expires. All told, the Pacers will receive $21 million from CIB next year, including money it will receive for repairs to be made to the fieldhouse. The CIB board voted 8-0 Wednesday afternoon to approve the funding.
In a July 2010 contract, CIB agreed to give the Pacers $33.5 million over three basketball seasons to offset losses from operating the venue. In December 2012, the CIB extended the contract for another year and gave the Pacers an additional $10 million.
The CIB and the Pacers are negotiating a long-term contract that could keep the team in the city for several more years, Lathrop said. The current lease expires in 2019.
“Both sides are negotiating in very good faith,” Lathrop said. “I feel very confident that between now and the end of the year, we’ll have an agreement.” . . .  To cover the $35 million budget increase, CIB will use money from its renewal and replacement account and operating reserves, Lathrop said.

“We absolutely planned for this,” she said. “In my mind, that’s prudent.”
"That's prudent," says Ms. Lathrop, who works for a consulting firm that presents all sorts of opportunities for her to leverage her position on the CIB to make additional consulting fees for her employer's consulting business while she says she's being "prudent" on our dime. It is a complete and utter lie that Herb Simon's Indiana Pacers are losing money, but notice the reporter's couching of those losses. It is said this $11 million, which is about equal to what Ballard is asking you to pay in higher property taxes this year to pay for fewer police officers, is "to offset losses from operating Bankers Life Fieldhouse." First of all, $11 million has to cover at least 100% of the cost of operating the Fieldhouse since the CIB claimed it cost about $20 million a year to operate Lucas Oil Stadium, a much larger, more costly facility to maintain. Taxpayers will also be footing the bill for at least another $10 million in improvements to the Fieldhouse which the Pacers are contractually obligated to pay. The truth is the Pacers have not paid for one single major expenditure at the Fieldhouse since they've operated rent-free for their exclusive personal use. Every major expense associated with maintaining the building has been paid by the CIB.

Even though the Fieldhouse is used 100% for Simon's personal business purposes, no property taxes are paid on the building. If he paid property taxes like every other building owner in this city, his annual tax bill would be at least $5.25 million. It is unconstitutional to permit publicly-owned property that is used for private for-profit purposes to be tax-exempt, but this is Indiana and we don't pay much attention to our state constitution when it comes to such matters. [Note: Mayor Ballard vetoed a provision of last year's budget that would have required the CIB to pay a PILOT of $15 million to the city for the Fieldhouse, Lucas Oil Stadium and the convention center. Our corrupt mayor had taxpayer-paid lobbyists convince the state legislature to amend state law to bar the City from ever collecting a PILOT on the CIB facilities.]
You also need to understand that there are two legal entities which comprise the Indiana Pacers. There is the Indiana Pacers, which represents the basketball franchise, and there is Pacers Sports & Entertainment, which operates the Fieldhouse on behalf of the CIB. Absolutely no rent is paid to the CIB for the exclusive use of the CIB facilities for the benefit of Simon's Indiana Pacers and Pacers Sports & Entertainment by either of these business entities. The claim that it costs Simon more to maintain a facility that he pays absolutely nothing to use for his private business use is utter nonsense that any person with a brain could figure out. This billionaire gets to pocket money that he makes from concerts and other non-game events held at our taxpayer-funded facility. We get to pay the mortgage on the building, along with any extraordinary expense, such as a new ribbon board and digital score board that the Pacers use for additional revenue-generating opportunities.
The media in this town are all in bed with Herb Simon. Their media businesses make money from their coverage of the NBA franchise's games, and Simon's Pacer organization takes members of the media on all-expense paid trips to luxury resorts where they are showered with gifts and other free entertainment. In a nutshell, the Indianapolis media lies to the public about the so-called financial woes facing the Pacers because it's in their self-interest to do so. The politicians receive free tickets to the games, plus generous campaign contributions, which is why they are willing to lie to your face. City-County Council President Maggie Lewis, who sits on the CIB, alone has received free tickets worth well into the thousands of dollars, an amount far beyond what her household budget would permit her to purchase if she had to buy them out of her own pocket. Mayor Ballard and his wife, Winnie, are even worse when it comes to holding their hands out for freebies from people like Simon.  
If Herb Simon's NBA franchise has lost hundreds of millions of dollars over the past decade, then why is a franchise he purchased for about $10 million now worth almost $400 million. Why was Herb so quick to exercise his first right of refusal to buy out his late brother Mel's one-half share in the franchise? Why won't Herb disclose to the public how much he paid for Mel's interest. And why won't the CIB demand that audited financial statements be released by the Pacers if they expect the taxpaying-public of Indianapolis to underwrite their multi-million dollar sports franchise? You know the answer to every one of those questions.
If you don't wake up and start firing every politician in this town who says he or she supports public subsidies for the wealthiest man in Indiana who doesn't even live in our city, then you deserve the poor government services you receive for the eternally higher taxes and fees this city can impose upon you. The operating budget of the CIB is scheduled to increase by $35 million next year. Virtually all other city budgets will remain flat or be cut further, even with higher taxes and fees being levied upon taxpayers. Who do the politicians really represent?

UPDATE: Check out the comments of City-County Council President Maggie Lewis, who has accepted thousands of dollars' worth of free tickets to Pacers games, explaining to the Star why she supports the CIB's budget:
Council President Maggie Lewis, also a Democrat, has a seat on the CIB and voted in favor of the budget proposal.
The Democrat said it was “very wise to go ahead and set this money aside as we negotiate.”
And Lewis predicted a smoother ride for the CIB budget this year. . .  
 “I think because the CIB is helping offset the cost of public safety,” Lewis said, “that’s going to help my colleagues make a sound decision regarding the budget.”


Anonymous said...

We all know that the CIB will continue to throw money at the Pacers and Colts until; a) the city goes broke or b) someone goes to jail for corruption...

Gary R. Welsh said...

Fat chance of anyone to go to jail for all the corruption at the CIB. They have anyone who matters in this town in their back pockets; otherwise, there would have been a massive public corruption case against them years ago with plenty of people going to prison for a long time.

Anonymous said...

...speaking of corruption: Yesterday it was released that Frank Straub had his personal GeStraubo that broke into the police internal affairs office at night to get documents on Bisard, secretly recorded prosecutorial conversations, and tampered with sealed court evidence. We also know a wiretap was found in a deputy chief of police office.

Who authorized the spending for Frank Straub's legacy, the Regional Operations Center, that has been questioned about multiple irregularities?

Where is the forensic audit of what Frank Straub did for Ballard?

Flogger said...

Great article. Crony-Capitalism is part of what is ruining our whole country. Our Government from the Federal to the Local Level has been fully infected with Crony-Capitalism.

The vast majority of businesses in this County receive no subsidies for their operating expenses. Yet the Pacers and Colts receive huge tax payer subsidies.

The entire process of this Corporate Welfare Plan will sail through.

Gary R. Welsh said...

Yet the county prosecutor did nothing about it. It speaks volumes for how business is conducted in what I believe is one of the most corrupt cities in America. said...

The only thing remarkable about Indianapolis, anymore, is the level of public, and private, corruption.

guy77money said...

Cincinnati isn't to far behind. It is a good thing that the city area of Cincy doesn't take in all of Hamilton County or the corruption would be on par with Indy.

CircleCityScribe said...

Hey, Steve: Ever hear of the pot calling the kettle black?

I appreciate that statement of admission from the former Marion County Democrat Chair!