Saturday, May 15, 2010

It's Official: IRS Says Pacers Had Catastrophic Impact On Downtown Restaurant

I've admired over the years the tenacity of former Hollywoods Bar & Filmwork Ted Bulthaup in standing up to the insiders in this city who continue to press their case that the professional sports teams are the be all, end all for downtown Indianapolis. Bulthaup, the former president of the Downtown Restaurant Association, made the case over several years that the building of Conseco Fieldhouse actually had a negative impact on his and other downtown businesses. Bulthaup eventually threw in the towel and closed his business. He took out a full page ad in the Indianapolis Star in an effort to explain to the general public what was really taking place as opposed to the propaganda being spread by the IDI, the ICVA, the Mayor and other civic leaders. Unfortunately, his one day ad purchase wasn't enough to sway the editors of the Star in their opinion that this spending must occur in order to keep downtown vibrant. Bulthaup, however, gets the last laugh. In a comment he posted at Indy Tax Dollars, Bulthaup explains how he succesfully took his case to the IRS. He filed a claim for relief under the same provision of the tax code that gave relief to businesses that suffered losses as a result of Hurricane Katrina and other types of catastrophic occurrences. AND HE WON! Bulthaup says he got his refund check from the IRS last month. Here's what Bulthaup wrote:

I and over 20 others closed their downtown businesses citing Fieldhouse related problems as a primary reason. As a matter of fact, the IRS code provides tax relief to businesses if there is a catastrophic occurrence, such as a flood, earthquake, or Katrina like hurricane. In my filling for that relief, I extensively detailed those problems and the lack of any net positive economic benefit, and conclusively proved the many negatives in a report so thorough and complete the attorneys said it was the best documented case they had ever seen and later the hearing officer did not even question if the relief should be granted. It was just a matter of “how much”. In the proverbial “Miracle on 34th Street” tradition, an official agency of the US Government pronounced that the Capitol Improvement Board and its facilities had the same catastrophic economic affect on downtown Indy as a hurricane did to New Orleans. It took three years, but I got the refund checks just last month.
Bulthaup's comment completely points up how studies recently commissioned by the City at a cost of $30,000 have been completely discredited over time. He points to the $100,000 study by the IU's Kelly School of Business the City and Colts owner Jim Irsay deep sixed after it showed quite the opposite while they were making the case for the construction of a new stadium. He said IDI blamed his and other downtown restaurant's loss of revenues on 9/11 for several years until figures elsewhere in the city, state and nation showed otherwise. IDI dropped sharing downtown revenues altogether when it became patently obvious it didn't serve its needs he says. He also reminds us that the CIB forgave the Pacers from their legal obligation to pay $3.45 million a year for Conseco parking, which he says has saved the Pacers about S40 million to date. And of course, the City negotiated a deal with the Simons on the construction of their new headquarters for Simon Property Group that included free parking for its employees at another cost of at least $14 million. Bulthaup is no friend of Melina Kennedy, the former deputy mayor to Bart Peterson for economic development. He notes she helped negotiate that deal for the Simons while showing complete indifference to the problems cited by other downtown businesses. Kennedy is now the Democratic front-runner for Indianapolis mayor in 2011 and probably stands a good chance of winning at the rate Ballard is going in completely alienating all of us who worked so hard to elect him in 2011.

I think it's an absurdity Bulthaup qualified for this tax credit just as much as I think it's an absurdity to continue plowing what has amounted to billions of dollar over the years into supporting professional sports team owners and the facilities that support them and other downtown investments in the name of keeping downtown Indianapolis vibrant. The proponents of the latter are disingenuous beyond belief, such as Mayor Ballard's claim the City would lose more than 60,000 jobs but for the CIB's investments in them. The fact of the matter is our city is broke. Many of our neighborhoods are in decline. And people continue to flee these neighborhoods for safer, suburban neighborhoods. It's hard to believe that Mayor Ballard grew up in one of these working class neighborhoods after the way he has saddled up next to these elitist downtown insiders and accepted all of their offers of free tickets, meals and country club memberships, along with their platform. They are the same people who laughed at him before he became mayor. Who will have the last laugh, Mr. Mayor?


dcrutch said...

I read Mr. Bulthaup's ad when it first came out. It was a scathing account. Our city and government have zero reason to be involved in anything except the basics. The susceptability of human beings to greed and the subsequent corruption of our goverment is too close to the surface, too apt to temptation.

Years of observation and history tell me the rich and their law firms can generally buy the votes they need, directly or indirectly. It's as simple as that.

Gary, I understand and am more onboard for your disenchantment with Mayor Ballard. But, 'Melina Kennedy for Mayor' is not some glorious, untainted step-up to avoid exteraneous influence upon city government.

The sad fact is more average citizens need to give a &*%^ to change things. I don't know when that happens.

Gary R. Welsh said...

Ballard betrayed the people who volunteered the time and efforts to elect him. He betrayed us. I'll take Kennedy over Ballard any day to get the same lousy public policy decisions. At least I know where she's coming from in the beginning. If there is a third party candidate worth a hoot, I'll lend my support to that candidate.

dcrutch said...

Then while we're reconciled to voting for skunks or weasels, anybody got the lowdown on Brian Williams? Or,the Libertarian candidate? There's a potential (POTENTIAL) step-up with another Fred Petersonesque candidate.

Paul K. Ogden said...

I agree with Gary. There is no circumstance by which I would support another term for Mayor Ballard. I know Melina Kennedy's problems. But Ballard's presence in office hurts the Marion County GOP. The local GOP's long-term revival is dependent on rejecting the coutnry club politics that is the hallmark of Mayor Ballard's administration.

Gary R. Welsh said...

I will say that Brian is the only person running for mayor who has offered some constructive criticsm. Melina won't even say anything because her law firm put the deal together.

Marycatherine Barton said...

Huge thanks to Ted Bulthaup, and to the IRS for its bright decision. Gee!

Barnard said...

Come on people.... Talk about propoganda. Sheesh.

Let's at least ask for some proof of this IRS decision Mr. Bulthaup proclaims to have received.

I mean think about it. If the IRS were to grant tax relief to a failed business because of a local government's Economic Development project what kind of precedent would that set? They would have to grant probably 100's of Millions of $s (if not Billions) in tax refunds across the country now and into the future.

I for one would like to see proof from Mr. Bulthaup on this one. Doesn't seem logical to me.

Paul K. Ogden said...


Whatcha talking about? We're about ready to hand $15 million to a business for losing money while not even insisting they open their books. Proof...we don't need no stiking proof.

Downtown Indy said...

Barnard, we didn't need to see proof of Obama's citizenship, we were supposed to be ok with just word of mouth.

(No - not trying to open that can of worms, just using it as an example)

Jon said...

It's too bad that IRS decisions aren't global, the taxpayers of this town should be able to claim catastrophic losses due to the Colts and Pacers. So tell me how does that gel with the Hunden survey?

Barnard said...

Paul and Downtown Indy:
it shouldn't be acceptable to argue against wanting someone to prove a claim by saying someone else didn't prove something completely unrelated.

Just like I don't accept it when my daughter says, "but Molly's Dad lets her eat ice cream before dinner." So what!

You guys engage in pretty intelligent discussions on this and other blogs and I'm disappointed that your response to my request for proof of the IRS tax refund for "catastrophic occurence" from an ED project is we didn't need proof for something else completely unrelated. And Paul, I agree with you. We should require the Pacers to open their books if we're going to bail them out.