Pacers are major piece of puzzle 7.14.10

July 14, 2010
Jeff Smulyan
The Indianapolis Star

It's hard to recall today, scanning the Indianapolis skyline or driving through our thriving suburbs, that it was only a few decades ago that our city was known as "Indy-a-no-place." Today, we're growing faster than most of our Midwestern peers, anchored by a vibrant Downtown. I've been proud to watch our evolution through the years: Emmis Communications built our new headquarters Downtown on the Circle in 1998 to be a part of this remarkable metropolitan success story.
Taxpayers and corporate citizens have invested billions of dollars in facilities and infrastructure to make the Indianapolis region a world-class destination for championship sports, conventions and business investment. Our professional sports teams are essential pieces of this puzzle.

That's why I'm so pleased the City of Indianapolis, the Capital Improvement Board and the Indiana Pacers have worked out a deal to keep the Pacers in Indianapolis, where they belong.

Our company has owned a professional franchise (the Seattle Mariners). I know the refrain about pro sports: "The owners are greedy, and the players make too much." It's never popular to be seen as subsidizing such ventures. I applaud Mayor Ballard and CIB officials for ignoring rhetoric and political risks, looking at the facts and brokering an agreement that makes sense for the city and its taxpayers.

In the new deal, the CIB absorbs $10 million in annual operating expenses for Conseco Fieldhouse for the next three years. After this, both parties can work toward a longer-term deal.

In return, the Pacers are bound to stay for the next three seasons. If they choose to leave in the fourth year, they would pay the full $30 million back to the CIB, plus any penalties for early termination of the existing lease (which continues until 2019, subject to renegotiation).

This makes good economic sense. If the Pacers broke the lease today, the CIB would be saddled with total operating expenses for Conseco Fieldhouse, in the range of $12 million a year. The city would also lose more than $5 million in yearly tax revenues and an estimated $43 million annually in personal income and direct spending related to the team and the more than 600,000 visitors it attracts Downtown every year.

So we're investing $30 million to save more than $180 million over the next three years. That's an easy business decision.

It's also important to note that the $30 million in Fieldhouse expenses won't be funded by new taxes. Last year, the General Assembly provided the CIB with increased revenues from the Downtown sports district as well as access to state loans that can be used for this purpose.

The Simon family would like nothing better than to keep the Pacers in Indianapolis, but no business can absorb significant losses year after year. Other potential owners and hometowns are always lurking around vulnerable franchises. Who could have predicted more than a few years ago that Seattle would lose its NBA team to Oklahoma City?

The economics of professional basketball have changed dramatically in the decade since the Pacers negotiated their lease on the Fieldhouse, and this agreement will help them get their footing as the economy recovers and the NBA negotiates a new collective-bargaining agreement.

Keeping the Pacers in the fold and Conseco Fieldhouse a productive facility are essential ingredients to the continued growth of Downtown. All of our public investments are related. Losing one significantly diminishes the value of the whole.

Our city officials crafted an agreement that helps one of Indianapolis' treasured civic and economic assets while safeguarding the interests of taxpayers and citizens. I applaud them for it.
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