Tuesday, September 29, 2015

Downtown Mafia Now Wants To Expand The Convention Center Again

Last year, the Indiana Convention Center built with taxpayer dollars saw an occupancy rate of just 54%. Nonetheless, the corrupt downtown mafia that is holding our city hostage is now demanding the convention center be expanded yet again to keep up with expanding convention centers in other cities, which are now playing the same game they play with professional sports team owners. Yes, force the public at large to dig into their pockets to ensure great wealth and success for the few. The IBJ's Anthony Schoettle shares with the business newspaper's readers the whispers of those ready to cash in on another expansion.

Critics are warning that as cities nationwide continue expanding their convention centers to play to a bigger audience, the trend within the convention industry is to demand huge subsidies from host cities to land conventions. Some cities are no longer charging rent to conventioneers to offset the costs of operating their convention centers simply so the publicly-financed facilities don't sit empty. But that's not stopping the taxpayer-paid puppets whose strings are pulled by those profiting handsomely from Indianapolis' convention racket to sing the tune, "Bigger is Better."
. . . “We almost doubled the space, and we’ve been able to fill it with meaningful events,” said Barney Levengood, executive director of the Indiana Convention Center and Lucas Oil Stadium. “It’s very, very encouraging.” . . .
Levengood isn’t the only one talking expansion. So is Visit Indy President Leonard Hoops.
Indeed, the two say the numbers demonstrate the need for an eventual expansion.
In early 2011, Visit Indy and the city’s Capital Improvement Board, which owns the convention center, raised the curtain on a $275 million, 400,000-square-foot expansion.
Combined with the 2008 opening of the adjacent Lucas Oil Stadium, the expansion rocketed the center from 32nd largest in the nation to 16th . . .
Trepidation about filling the center coming out of the Great Recession has given way to confidence as the economy grows . . . 
Time needed for conventions to set up and tear down makes 100-percent occupancy impossible; 70 percent is considered a full house. In 2007 and 2008, before expansion construction began, the convention center’s occupancy ran at about 60 percent; last year, it was 54 percent . . . 
In 2008, the facility hosted 42 national conventions; in 2014, it hosted 106. Attendance from those events grew from 317,815 in 2008 to 635,701 in 2014 . . . 
To his credit, Schoettle talked to a critic of these convention expansions who wondered just how much Indianapolis is paying to land big conventions. The critic noted what I've discussed previously on this blog about the Chicago Sun-Times' reporting on the massive public subsidies Chicago officials are now offering to lure big conventions to the Windy City. The Sun-Times uncovered the fact that Chicago officials had spent $27 million over a 3-year period to land conventions, and are now spending about $15 million annually for that purpose. "Indianapolis officials—for competitive reasons—declined to say what incentives they offer," Schoettle writes. Sigh. Hey, it's our money they're spending. Don't take no for an answer. Demand they provide the information or file a lawsuit to force its disclosure. Indianapolis taxpayers have a right to know how much of our money Visit Indy is spending annually to bribe organizations to host their conventions in Indianapolis.

Schoettle's story also notes that other cities that have expanded the size of their convention space have actually experienced a decline in use, including big cities like Atlanta, Chicago and Las Vegas. The problem is that convention center space is rapidly growing, while demand for their use is remaining stagnant. But since we're spending other people's money, the CIB and Visit Indy have no qualms about borrowing more money and expanding the growing subsidies to Indianapolis' convention/hospitality/entertainment industries to the detriment of the rest of the city, which derives absolutely no value from more convention business. Why? Because the convention center pays no taxes,  and taxes paid by new hotels and restaurants built within the downtown area are virtually all consumed by either the downtown TIF district or the CIB. Indianapolis taxpayers get stuck footing the bill, though, for increased public safety and infrastructure costs needed to support the free-loading industries that benefit from this massive public investment.


  1. Anonymous2:07 PM GMT-5

    Gary, honest question. I'm a frequent reader, and, while I usually disagree, I appreciate your perspective. In your ideal world, what would Indianapolis look like? No colts, no pacers, no conventions, no life downtown after 5 pm? That would be a direct consequence of eliminating the things your rail against (TIF grants, subsidies to business, etc.) I'm genuinely curious, not trying to disparage anything.

  2. Eric Morris2:11 PM GMT-5

    When are these cronies, who also tend to advocate for socialist solutions to poverty and crime such as welfare and more cops, going to follow this to its next logical step, and give these largely empty and unused white elephants like Lucas Oil and the convention center, to the homeless?

  3. Eric Morris2:21 PM GMT-5

    Anon 2:07: LA is a "world class city" without the NFL. Do you think the roads would not have potholes if so much of the tax benefits and debt binging were not showered on the largely unused palaces for thousandaires watching millionaires cavort for billionaire owners? Life would be just fine.

  4. The difference between you and me is that I believe in the value of the free market place and you don't. TIF districts are intended for blighted areas, and they are given a life span of no more than 25 years to pay off the debt from the original investments made to entice businesses to invest within the blighted area. Indianapolis is the only place in America where a TIF district has become permanent; it exists in perpetuity.

    In the real world, once the development is kick-started, the free market place is supposed to follow suit. Not here. We operate under the assumption that no development can occur downtown without continually pumping money by the tens of millions of dollars or more into new projects. There's a group of people free-loading off the rest of us. The bond lawyers who get to issue the bonds, the small group of engineers and architects who always seem to do the design work, the same small group of construction companies that do most of the construction work and so on. We're not publicly subsidizing investment anywhere near this extent anywhere else in the city. What do we gain at the end of the day as a city by pumping up the downtown while ignoring the rest of the city?

    The vast majority of people live outside the mile square and work outside of it. Yet, an overwhelming percentage of public investment in new development is committed to downtown. Meanwhile, other neighborhoods are deteriorating, lack basic services, crime is spiraling out of control and people are fleeing the city to the suburban counties to escape it. More investment downtown isn't doing anything to address the problems in other neighborhoods.

    The sports teams are an entirely different matter. Most people had no problem supporting the initial investments that helped land an NBA team and an NFL team. The problem we have, and this is a nationwide problem, is that no matter how much of the public's money is invested to support these professional sports franchises, it's never enough. They keep coming back and demanding newer and bigger facilities with more amenities and more public subsidies to offset their business operations. Most people can no longer afford to go to NBA or NFL games. It's just too expensive. So we are forcing everyone to subsidize entertainment for a small part of the population.

    Austin, Texas has a thriving downtown is growing much faster than Indianapolis and it has no professional sports team. The idea that you are a nobody without a professional sports team is getting old. Cities have to make a decision to stand up to these bullies and say enough is enough. We welcome your presence in our city, but if it's going to take higher taxes and more subsidies to support you, please take your team and go elsewhere. Holding a community hostage is not being a good corporate citizen.

    It all comes down to priorities. How in the hell can you keep telling people that there's no money to fix their streets, build sidewalks, maintain parks, install street lights, manage storm water runoff when your leaders' answer to the professional sports team owners is always "How much do you need?" when its them making the request. It is absolute insanity in my opinion to ignore basic services and think all is going to be well as long as you have a strong and vibrant downtown and professional sports teams. Look at how much money Detroit has invested in professional sports franchises and downtown development and where it is today.

  5. Anonymous3:48 PM GMT-5

    BRAVO! Gary, perfect reasoning, logic, and winning arguments throughout your 2:42 comment. I agree with you completely. I wonder if many people are not advocates of, or even believe in, the free market system because they've never been taught exactly what a free market is, how it works, and why it works far better than any economic system yet devised in the history of man. And these are the college educated set who clain themselves to be the most educated group ever. Nothing could be further from the truth.

    The American free market system has provided water and electricity inside homes, medicines to cure illnesses which were once fatal, industrial might that once employed millions and provided them with the resources to better house, feed, and teach their progeny, and with the resources to keep foes and enemies at bay.

    I know I am wasting my voice when I pray each and every one of our City County Councilors and State Legislators read and fully comprehend what you wrote. But I know that is a fool's prayer. Why do people actually think it's so important to have sports teams, convention centers, pie in the sky utopian downtowns with all their truth of a traveling snake oil salesman's gimmickry? And why can't those folks believing that even explain the underpinnings of their beliefs? Why do we have a city council? Why do we have a state legislature? Why do we go to the polls when a vote for candidates served up to us by the corrupt Democrat and Republican political machines is really not a choice at all? Why? Why?

    No one is more enslaved than the person who thinks he is free.

  6. Excellent Gary! TIFs are statically / inorganically modeled (vs dynamically) in economic terms. California placed a moratorium on TIFs, not because their politicians don't like spending money, they couldn't keep up with the resulting blight.

  7. RE:anon 2:07, I tired of the excuse that Indianapolis would be Indy No Place unless we had billionaire sport's palaces and pro sports teams. I'm tired of subsidizing billionaire team owner's every whim. I'm tired of providing free parking garages to campaign contributors. I'm tired of phony sales of corporate assets e.g. parking meters and the water company deal that enrich the corporate elite. I'm tired of paying 2% of every dollar on food sales in restaurants to support BLF and Lucas when the majority of us can't afford to attend games at BLF or Lucas. I'm tired of rolling over bond debt into new construction, e.g. the debt on the Hoosier Dome was rolled into Lucas. Question anon 2:07, if we didn't pay off the bonds on the Hoosier Dome that cost less than 78 million what are the chances we will pay off the debt on Lucas of 720 million?

    Gary is exactly right; the downtown area is being enriched at the expense of the rest of Marion County. There is more to life than sports and the mile square.

  8. "Austin, Texas has a thriving downtown is growing much faster than Indianapolis and it has no professional sports team"

    No, but in Texas and especially the Austin area the Longhorns have as large of a following as the Dallas Cowboys. Austin isn't immune from the sports boondoggles. Circuit of the Americas was built just outside the city limits in order to bring Formula 1 back the USA after Bernie Ecclestone wanted his King's ransom for F1's return and Tony George declined. It's been a few years now so I would venture to guess Bernie will demand his King's ransom out of COTA

  9. As a regular visitor to Austin for many years, Gary's point stands. Shame on Austin, Eccle-stoned is a fashion fickled snot whose sophomoric behavior will wear thin in TX- they'll have to find another use for that track when whimsy drives him elsewhere.

    The public purse is routinely leveraged by "little brother syndrome," to keep up with or "be like" Chicago, NYC, LA, etc. The obvious problem with "being like" another city, is the depreciative failure to value & be the city we are. Sure, great ideas come from other places; from private citizens organically investing their own talent & capital.

    There's big money in the inorganically unsustainable, Romanesque, half pregnant "logic" of so called public / private partnerships, TIFFs, etc. Therein, lies- the problem.

  10. Anonymous4:46 PM GMT-5

    Anon 5:16 I lived in Austin for five years. The Longhorns play 4 home games. The biggest game they play all year, the Red River Shootout, is in Dallas every year. It's not the same as a pro team...not even close. Regarding F1, Austin was very much divided. COTA is well out of town. You don't understand Austin at all. What makes it great has nothing at all to do with sports and everything to do with thriving, eclectic neighborhoods, a vibrant arts scene and much more...stuff that Indy will never have because this city continues to invest in the wrong things.