Indiana Alliance for Democracy
Fieldhouse Myths & Facts
By Jack Miller & Lou Campagna
“I don’t think it’s right for an entrepreneur to ask another entrepreneur for a gift”,1 intoned Herb Simon in a 1997 interview explaining his reluctance to ask other businesses to help fund the new fieldhouse. Sadly, his shyness has never extended to Hoosier taxpayers who have been tapped royally to build and maintain the Conseco Fieldhouse (known briefly as the Indiana Fieldhouse during the early financing stage).
The Alliance for Democracy has been closely following the progress of the new Conseco Fieldhouse and we would like to challenge the myths about this so- called Public-Private Partnership (Translation: Public risk and cost-Private gain).
v Myth: The Simons are spending $57 million of their own money on the Fieldhouse.
v Fact: The $57 million comes from: The Simons’ “renting” 1300 parking spaces for luxury suite and club seat owners @$3.5 million for ten years2 (This is the only revenue that isn’t diverted straight to the Simons and amazingly is still considered Simon money toward building costs!)
$20 million from an “expanded ticket tax”3 (That’s a tax on the fans which counts toward the Simons’ share of the building costs!).
The Simons did invest $2 million of their own money to “prime the pump” and get the idea accepted. (NOTE: This $2 million is to “be reimbursed if the project is allowed to go forward”4).
v Myth: Private investors are chipping in $37 million to help taxpayers build the Fieldhouse.
v Fact: The Circle Center Investors will loan $37 million to the CIB to be repaid with interest on or before December 31, 2017.5 If downtown workers don’t rent enough parking spaces to pay back the investors, the taxpayers must. James Snyder, Goldsmith’s special counsel, said, “If we can’t lease the spaces, the City is in trouble.”6
v Myth: The final contracts and lease arrangements were signed in 1997 before construction began.
v Fact: As of the last Freedom Of Information (FOI) reply from the Capital Improvement Board(CIB) on (2/18/99) “The lease documents have not been executed at this time.”7
v Myth: The City will benefit financially from renting the Fieldhouse out for rock concerts, hockey games, and other non-Pacer events, plus share in advertising and broadcasting revenue.
v Fact: All proceeds from any rental of the Conseco Fieldhouse go directly to the “The Pacer Basketball Corporation or a subsidiary of the Pacers” including “signage, advertising, and broadcasting revenue income.”8 This includes a recently announced deal in which “seven elite sponsors agree to 5-10 year deals” at up to $1 million each (annually).9
v Myth: The sale of naming rights for the Fieldhouse will offset some cost to taxpayers.
v Fact: Steve Hilbert has agreed to pay $40 million over 20 years to put his company’s name on our public fieldhouse plus $55 million more to sponsor and all of that $95 million goes to the Simons.10
v Myth: With the taxpayers of Indiana paying $100 million in diverted income and sales taxes for the Fieldhouse, the Pacers will certainly pay the cost of maintenance, utilities, and incidentals.
v Fact: Unless the Pacers turn at least a whopping 18% profit, the City will continue to reimburse them up to $3.45 million a year for these costs.11
v Myth: Having this new sports arena will provide many new jobs and boost the economy in Indianapolis.
v Fact: Mark Rosentraub, PhD., a leading analyst of economic impacts of sports, says sports teams “Produce few jobs, little tax revenue, and negligible positive impact even on their own immediate neighborhood.” Rosentraub concludes that “Sports are relatively ‘small potatoes’ when their importance to a region or city’s economy is considered.”12
Aside from the money they invested in key politicians ($20,000 to Goldsmith13 and $20,000 to O’Bannon14 in 1996 alone), our study of the available news reports, documents acquired through FOI requests, and talks with CIB officials has failed to turn up any evidence that the Simons have invested a dime in this venture.
This lends a certain irony to Mayor Goldsmith’s statement that he “wanted to be careful not to overburden the Simons because the point of building a new arena is to keep the team here and stem the Simons losses.”15
The good news is that since the lease remains unsigned, there might still be a way to stem taxpayer losses. This assumes however, that the negotiators have the public interest in mind and so far there’s no indication that they do. In all probability the Simons are holding out for even more “freebies” (If there could possibly be any!) and with the Fieldhouse nearly complete, they hold all the trumps.
The Roman poet Horace said, “Semper avarus eget” (The greedy man is always in need). Twenty centuries later, the greedy man is alive and well in Indianapolis.