Don't Get Excited, New Name For Conseco Means More Money For Pacers

Your tax dollars may have been used to build it, but as we've come to expect in Indianapolis, any revenues derived from the sports facilities built with our tax dollars go directly into the pockets of the billionaire sports team owners. Billionaire Herb Simon's Pacers and CNO officials are planning to announce the renaming of Conseco Fieldhouse as CNO Financial Center. The Indianapolis Star's Heather Gillers doesn't even give taxpayers credit for building the damn facility. She writes:

Nobody is officially divulging the new name, but here's some fodder for speculation: Conseco's namesake, the Carmel-based insurer formerly called Conseco Inc., changed its name in March 2010 to CNO Financial Group. CNO executives started talks with the Pacers about renaming the arena but ultimately decided the time wasn't right.

Conseco Fieldhouse, built by Mel and Herb Simon, opened in 1999 when the Pacers moved from their former home, Market Square Arena.

Pacers and CNO officials are expected to be on hand for Thursday's announcement. Pacers Sports & Entertainment President Jim Morris could not be reached for comment late Monday.

But one Downtown player, the Sheraton Indianapolis City Centre Hotel, may have jumped the gun. Its website boasts about its proximity to Conseco, "recently renamed CNO Financial Fieldhouse."

Yes, she really did write that Conseco Fieldhouse was built by Herb and Mel Simon. She probably believes that it was the Simons' money that built Circle Centre Mall too. Here's a hint to these Gannett newbies. Don't believe a word Jim Morris and the other rent-a-civic leader propagandists tell you. Verify everything he tells you. It may prevent Ms. Gellers and her boss, Dennis Ryerson, from looking so stupid. Someone asked the other day about the members of the Indianapolis News Guild's efforts to "Save The Star": What's there left to save? Point taken. By the way, Ms. Gellers, taxpayers built Lucas Oil Stadium as well. Billionaire Jim Irsay is simply getting all the revenues from it while the taxpayers foot the bill to maintain it.

Will the Pacers be required to tell us now much the deal will net for them? How much money does the new NBA contract net for the billionaire Simon, which would be particularly useful to know since the team got a $33.5 million gift from the CIB over the past few years based on a totally bogus claim it was losing hundreds of millions of dollars. The Simons don't continue to operate and own anything that loses money. Just look at their abandoned malls if you doubt me. The CIB's current President, Ann Lathrop, has already hinted there may be additional permanent public assistance in the Pacers' future. Lathrop is the handpicked lackey of her predecessor, Bob Grand, whose Barnes & Thornburg law firm represents Simon.

UPDATE: Fellow blogger Fred McCarthy has a spot-on response to the Star's latest miscue:

Imagine our embarrassment! In a front page article in the morning paper about the possible re-naming of Conseco Fieldhouse we found the following information. "Conseco Fieldhouse, built by Mel and Herb Simon, opened in 1999 when the Pacers moved from their former home, Market Square Arena."

All this time we’ve been finding fault with the city subsidizing the Pacers, under the misapprehension that public funds had been used to build the palace in which they perform.

Our apologies to all concerned. The next time the Pacers say they are losing money and want more tax dollars, we’ll try to remember not to complain when the city’s response is, "How much, and do you want that in small unmarked bills?"

Cash Rich CIB To Purchase 500 Parking Spaces For Rolls-Royce

The CIB may have been on the brink of bankruptcy just two years ago, but now it's sitting on a pile of cash that's just burning a hole in its pockets waiting to be spent. First, it gave $33.5 million to the billionaire Simons for their Indiana Pacers. Then it announced it is giving more than $8 million to the City to cover the costs of the Super Bowl. Now we learn it's planning to find 500 new parking spaces for the giant, foreign-owned defense contractor, Rolls-Royce, to accommodate the company's workers in its new digs at the Faris Building earlier abandoned by Eli Lilly. The IBJ's Francesca Jarosz explains:

The Capital Improvement Board will be charged with helping Rolls-Royce Corp. find up to 500 additional parking spaces to accommodate the company’s move to a downtown office campus formerly occupied by Eli Lilly and Co.

At its meeting Monday, the board gave its leaders clearance to move forward in drafting a parking agreement with Rolls-Royce and the city.

It would include giving the CIB, which operates the city’s stadiums and the Indiana Convention Center, authority to operate the Faris Campus garage and two nearby parking lots – 2,000 spaces in total – during evenings and weekends when events are taking place. The CIB would keep the net parking revenue, and that money would be escrowed into a fund that would be used to cover the cost of finding more spaces for Rolls-Royce, said Barney Levengood, the CIB’s executive director . . .

The CIB will get to keep its cash from parking operations that is not used toward securing spots for Rolls-Royce. Levengood said he could not estimate how much revenue the garage could bring in for the CIB.


If it’s not enough to cover the cost of finding parking, Levengood said, the CIB has the right to negotiate a new financial structure for the deal, but it’s not yet clear whether that would involve the city or Rolls-Royce chipping in to cover the cost of financing the garage.

“If the revenues are not sufficient to pay the outstanding liability, we have the ability to go back to the city,” Levengood said.

Levengood also declined to identify potential parking areas for fear that owners could drive a harder bargain in negotiating with the CIB for the sale of the spots. Kintner said Lucas Oil Stadium, which the CIB operates, could be one option.

The CIB has operating reserves of nearly $11 million and total reserves of about $50 million currently according to CIB's CFO Dan Huge. The City earlier this year announced it was awarding Rolls-Royce a 10-year tax abatement deal on the Faris Building, along with other state and local incentives, to relocate 2,500 employees from other locations in the city to the downtown location. Hey, the city gave free parking to Simon Property Group's employees after giving it $25 million to build its new headquarters downtown. Why shouldn't taxpayers provide free parking for Rolls-Royce's employees as well? In the words of Ann Lathrop, it's our obligation as a "good corporate citizen."

Georgia Street Project Includes Heated Street And Sidewalks

Artist's rendering of finished Georgia Street project for Super Bowl

Fellow blogger Pat Andrews continues her excellent coverage of the outrageous public expenditures that are being made at the behest of the local Super Bowl Committee to make the billionaire owners of the NFL satisfied with the accommodations provided during next February's Super Bowl event since the $750 million stadium with a retractable roof financed by higher taxes simply doesn't cut it for these demanding team owners. We learned soon after the City won the bid that it would have to find money to build a new enclosed practice field for one of the teams because other enclosed facilities already available in the Indianapolis area didn't meet NFL standards. Then we learned that more than $12 million would be spent renovating Georgia Street to transform it from a functioning city street to a pedestrian-friendly village with outdoor cafe dining and a boardwalk. As WTHR described it:

The Super Bowl Village will feature café dining on the sidewalks and a boardwalk in the center of the street. It will be designed as a free, festive atmosphere where fans without a game ticket can mingle outside in the afternoon and evening, get a drink, huddle in warm zones with heaters and enjoy concerts.

"We are not shying away from the weather. We're going to have fun with it. There are different things we can do outside to keep the fans warm and happy," said Baughman.

"The village is really going to be the front door to the NFL experience in the convention center and Conseco Fieldhouse, which will also host events," said William Browne, the Founding Principal and President of Ratio Architects. "This becomes the street fair, if you will, the activity spot to radiate out from downtown for the many events that will take place during the Super Bowl."

It didn't make sense at the time to describe those sort of amenities for Georgia Street given Indianapolis' cold winter weather. Despite Baughman's claim that the project would not involve "shying away from weather," it turns out that's not quite the case. Andrews learned that one of the amenities being offered with the three new blocks of Georgia Street will be heated streets and sidewalks. After all, we can't allow the Super Bowl visitors' feet to get cold walking on the freezing surface temperatures of our streets and sidewalks now, can we? Andrews picked up this bit of information from the designs the Super Bowl committee had prepared for the redesign of Georgia Street to meet the NFL's requirements, after which it signed a contract with the Department of Public Works to get reimbursed for more than $1.6 million it incurred for the design plans. Andrews blogs:

One of the more interesting, some might say frivolous, design changes noted in the initial round of contracts, subsequently taken over by DPW to pay, was to heat Georgia Street. Yes, the street and sidewalks will be heated from underneath with forced steam pipes. The cost estimate was another $1 million. Now, just how useful will that be beyond the Superbowl??? Come on. This clearly is a case of what sorts of things you spend money on, when you are spending someone else's money. Its just like the retractable roof on Lucas Oil Stadium, that rarely is retracted when the sun shines, but I hear, often leaks when it rains.

A question that remains to be determined is whether businesses along Georgia Street that have been negatively impacted by the construction work over the past year will be able to hang on until the Super Bowl. Earlier this year, the Pub complained to WTHR that its business had fallen 40% due to the construction work. Nordstrom closed its doors at the end of July as the major anchor for Circle Centre Mall, leaving vast space on three floors of the the mall completely unoccupied.

If that isn't enough to get you upset, check out these numbers. WTHR's Mary Milz reports that the CIB will spend at least $8 million in taxpayer money on the Super Bowl:

The game is 167 days away and Eyewitness News has found out at least $8 million in tax money is needed. Most of the money budgeted by the Capital Improvement Board, which runs both the convention center and Lucas Oil Stadium, will go to public safety.

North Texas spent millions on police and fire protection during Super Bowl XLV in February. Indianapolis expects to spend $4 million alone in overtime when it hosts the Super Bowl in February. The money won't come from the public safety budget, however. It will come from the Capital Improvement Board.

"I think, in general, we get the hospitality taxes that are going to be coming in due to the event," said CIB president Ann Lathrop. "Given the significant, one time only impact this is going to have, we think it is the right thing to do as good corporate citizens."

Keep in mind this was the same CIB that claimed it was teetering on bankruptcy just a couple of years ago unless we bailed it out with a series of tax increases and a new state subsidy. Now the CIB is so cash rich that it has $33.5 million to give away to the Simon's Indiana Pacers and another $8 million to foot the bill for Super Bowl-related expenses. I will flat out claim and defend such claim until proven otherwise that Ann Lathrop and Bob Grand totally fabricated a financial crisis after they took over the CIB following Mayor Ballard's election in order to find money for the Simon's new public subsidies for their NBA basketball team and to finance the Super Bowl costs, the event that we were told would cost taxpayers nothing because all of the funds necessary to cover the expenses would be paid by contributions raised by the local host committee. There have been reports that the CIB is letting the NFL use space at the convention center during the Super Bowl free of charge. Further, the legislature passed an unprecedented tax exemption that covers the Super Bowl event so that the NFL doesn't have to pay any state or local taxes during the event.

No, Ann Lathrop, we will never recoup the losses from this event. And the claim that the Super Bowl will generate $450 million for the local economy repeatedly touted in local news media reports is complete and utter BS. No independent study of the Super Bowl has ever proven that it generates anything approaching that kind of economic impact. Independent analysts peg the economic impact at no more than $40 to $50 million at best. As for added tax benefits, look at how little sales tax revenues grew in the Arlington, Texas communities that hosted this year's Super Bowl. Look no further than Detroit for the definitive proof of just how little benefit the Super Bowl generates for the city at large. How stupid do they think people are? It is simply unconscionable to be spending tens of millions of dollars to put on a party for the nation's richest people while the common people are sinking by the day under the pressure of the worst economic crisis since the Great Depression. At the rate things are going, they're going to need a small army to simply keep out angry, rioting taxpayers who will share in none of the benefits of this party and who are struggling to find jobs and to put food on the table for their families.

UPDATE: The CIB approved its budget yesterday, which naturally calls for an increase in its operating budget of $4.4 million to $77.5 million unlike virtually every other city-county agency next year that is facing cuts or a flat-lined budget. The CIB was asked about the annual $10 million subsidy payment to the Pacers that is suppose to be needed to defray maintenance costs on Conseco Fieldhouse in light of the fact that the NBA currently has a player lockout with the failure to ratify a new collective bargaining agreement and may play a shortened season or no season at all this coming year. Of course, the biggest expense of operating an NBA team are the salaries of players, which the owners don't pay while a lockout is still in progress. The Pacers pay nothing to lease Conseco Fieldhouse and get to keep most of the revenues the facility generates from both game and non-game events. Here's the reaction of Ann Lathrop, who is nothing more than a stooge for Bob Grand, whose law firm represents the Simon family interests, including the Indiana Pacers:

"The building doesn't go away," Lathrop said. "Those expenses will stay there. It's our building, and we have an obligation to keep it running."

She did not know how much it costs to operate the building during Pacers' home games.

Did you catch that? She doesn't know how much it costs to operate the Fieldhouse during Pacers' home games. This is one of the same CIB leaders, an executive for a major accounting firm no less, who swore up and down she had seen the Pacers' financial statements and could confirm the team was losing money. It was on the basis of that review of the team's financial situation that Lathrop and other members of the CIB voted to approve the three year, $33.5 million gift to the franchise to help defray the costs of running Conseco Fieldhouse. Lathrop, in effect, just admitted that she doesn't even know what it costs to maintain the Fieldhouse. She never cared because she is financially rewarded for doing what the power brokers in this town order her to do. It means more lucrative government consulting work for her employer, Crowe Horwath. Yes, those billables do impact the amount of money Lathrop earns at the firm. As always, there is absolutely nobody on the CIB who represents taxpayers.

Jacoby On Convention Center Follies

Jeff Jacoby has a story on Townhall's website you won't read about in the Indianapolis news media describing the follies behind the "build and they will come" mentality of cities across America on never-ending efforts to build larger and larger convention centers. The most telling fact his story reveals is how attendance at convention trade shows peaked in 2000 and has been falling since, while available convention center space in American cities has grown from 40 million square feet to over 70 million square feet since 1990. Focusing on Boston's failed convention center expansion, Jacoby writes:

Ten years later to the month -- how's that for prescient? -- the Boston Globe reported on its front page that Massachusetts officials want to double the size of the Boston Convention & Exhibition Center, already the largest building of its kind in New England. The story noted that the convention center had never lived up to the exuberant promises made by its promoters. For example, a state-commissioned feasibility study had estimated that by 2009 the convention center would be doing enough business to generate 670,000 hotel room nights per year. In fact, the real figure turned out to be less than half, or about 313,000 room nights.


To a disinterested observer, it might seem obvious that Boston is no different from so many other cities competing for conventions and trade shows in a national market glutted with space. Over the past two decades, the amount of square footage available for exhibitions nationwide has soared nearly 75 percent, growing from 40.4 million square feet in 1990 to more than 70 million square feet today. Cities everywhere have been enlarging their convention centers. San Diego, Phoenix, Denver, Atlanta, Orlando, Chicago, Las Vegas, Philadelphia -- all of them have either recently finished or are planning an expansion, all of them at taxpayer expense, and all of them justified with the same argument being made once again in Boston: If only we had more capacity, we could attract bigger shows, lure more visitors, stimulate more business, generate more growth.

But while the supply of convention space has been going through the roof, the demand for that space hasn't come close to keeping up. According to the industry publication TradeShow Week, attendance at conventions and trade or consumer shows plummeted from 126 million in 2000 to just 86 million in 2010. (TradeShow Week ceased publication last year.) The market is hopelessly overbuilt. Earnings are weak. In some cities, convention halls are literally giving space away. It doesn't take an economic savant to recognize that in such an environment, it is folly to keep building.

Unfortunately, economic sense vanishes when politicians and their tourism-industry friends -- and the consultants they hire to cheer themselves on -- start clamoring for yet another money-losing new facility to be subsidized with still more public dollars.

The Indiana Convention Center in Indianapolis, originally built in 1972, has grown through several expansion efforts from 123,000 square feet of convention hall space to more than 566,000. Nearly half of that convention space was made possible by the latest expansion, 254,000 square feet, that was opened for business in January, 2011. If you throw in Lucas Oil Stadium and other available meeting room space, the available space for conventions grows to 1.2 million. According to the ICVA folks, the convention center will need to generate at least 800,000 hotel room night bookings annually to utilitize the expanded convention and hotel capcity for Indianapolis. The ICVA claims it booked 650,000 room nights in 2010, well above its 2009 goal of 500,000. It's interesting that Indianapolis is claiming much higher room night bookings than Boston, which reported 313,000 room nights in 2009. It makes you wonder if the ICVA's numbers are bogus, or they include room night bookings unrelated to conventions.