Colts here for another 30 years !
August 31, 2005
City, Colts agree on 30-year lease
State and team must finish separate development deal
About the deal
Negotiation is always a game of give and take. Here's what both sides got in the lease deal:
What the city got:
• Requires the Colts to play all home games in the new stadium until 2034.
• Forbids Colts playing home games elsewhere or negotiating a relocation.
• Requires the team to keep its headquarters and training facility within the city.
• Ends the city's previous obligation to make up the difference between the team's annual revenues and the NFL median.
What the team got:
• Retains the Colts' rights to all football-related revenue in the new stadium, as well as half the annual nonfootball revenue up to $3.5 million.
• The team receives all revenues from a stadium name, signs and sponsorships in the new stadium.
• The city's Capital Improvement Board is responsible for maintenance of the new facility and game-day expenses such as security.
• The team gets space to develop a restaurant and Hall of Fame at its own cost and risk.
By Brendan O'Shaughnessy
The Colts and the city reached agreement Tuesday on a 30-year lease for a new stadium, putting pressure on the state to finish separate negotiations on how the $500 million stadium should be built.
The 85-page document formalizes a deal announced in December and ensures that the Colts will stay in the city until at least 2034, said Fred Glass, chairman of the Capital Improvement Board, which negotiated the deal. The board will operate the stadium.
"The lease means the Colts will be here for a generation," Glass said. "Folks can feel comfortable buying their grandkids a Colts T-shirt."
The lease governs everything from the Colts' tenure in the new stadium to who gets to use the building for up to 200 events per year other than pro football. The pact includes the team's $250,000 annual rent, the number of parking spots available and the Colts' rights to any new revenue created at the stadium.
The agreement outlines use by future NCAA basketball tournaments and makes room for the Convention Center expansion that will pump thousands of jobs and billions of dollars into the city's economy, Glass said.
"We are pleased to have reached agreement on all issues with the CIB related to the lease and look forward to the successful completion of all other unfinished agreements," Colts owner and Chief Executive Officer Jim Irsay said in a prepared statement.
But groundbreaking, originally scheduled for Aug. 1, can't take place until a stadium development agreement between the state and the Colts has been finished. Time is becoming an issue if the new stadium is to be ready for use in the 2008 season.
The Indiana Stadium and Convention Building Authority was created by state legislators to work on the development agreement. That agreement will lay out the stadium's design and exactly what it will contain, including everything from the planned retractable roof to the number of seats, suites and even where concession stands will be located.
Once the authority builds the stadium and expands the Convention Center, it will hand over operation of both facilities to the Capital Improvement Board. The lease governs the team's relationship with the city after that.
No date has been set for finishing the development agreement, but authority officials have said they are getting close. Glass said Chairman David Frick congratulated him on completion of the lease and pledged to continue working toward an agreement as quickly as possible.
The authority has no money to operate until the lease and development agreements are signed, allowing financing to begin. So far, the Capital Improvement Board has lent the authority about $10 million for design work and other preparations so the project can begin quickly once all the agreements are signed.
The board gave Glass the authority to sign the lease as soon as all agreements are ready. Major work, such as digging the foundation for the new stadium before the ground freezes for winter, can't begin until the authority money begins to flow.
"We think we've created momentum, and hopefully all the other dominoes will fall," Glass said. "We've really done what we can do."
The lease obligates the Colts to play all home games in the new stadium, forbids negotiations to relocate and requires the team to keep its headquarters and training facility within the city. It also ends city payments required in the previous lease to make up the difference between the team's revenues and the NFL median, a growing expenditure that helped prompt the new stadium deal.
In return, the Colts retain the rights to all football-related revenue in the new stadium, as well as half the annual nonfootball revenue up to $3.5 million. The Colts also will receive all revenues from a stadium name, signs and sponsorships in the new stadium.
The board will continue to be responsible for most game-day expenses such as security.
The agreement gives the team space to develop a restaurant and Hall of Fame at its own cost and risk. The board has the right to develop enterprises around the stadium's new boundaries.
"We're happy the lease is completed," said Deputy Mayor Steve Campbell. "This is another step forward for the whole project."
The stadium is being paid for through a combination of food and beverage taxes in the Indianapolis metro area, hotel and car rental taxes in Marion County and $100 million from the Colts. The city agreed Tuesday to help the Colts get a lower interest rate to finance their share of the stadium's cost.
Glass emphasized that there were few surprises but said the city succeeded in negotiating a few more favorable details. For example, he said the team could get a court order to ensure the board maintains the facilities, but it can't use something such as field maintenance as an excuse to break the lease and move away, as other teams have threatened.
"It was important for us not to give away at the drafting table what we'd won at the negotiating table," Glass said.