Pacers to kick in $63M as part of deal to keep team in Indy

Clarification: Under terms of the deal the state and city are discussing in Senate Bill 7, the city would direct $120 million from special taxing districts to an expansion of the Indiana Convention Center at Pan Am Plaza and $18 million toward infrastructure at two hotels near Bankers Life Fieldhouse. 

Update Feb. 26: The Indiana Senate passed legislation that includes a funding package to keep the Indiana Pacers in town for another 25 years by 48-1 Tuesday.

In asking for support for the bill, Senate Appropriations Chairman Ryan Mishler told the Senate the Pacers were kicking in $115 million for facility upgrades.

Former Sen. Luke Kenley, who is lobbying on behalf of the Pacers, explained to IndyStar that $63 million of that amount would be new money for improvements to the stadium and related facilities, such as the parking garage. He said $52 million of the $115 million is cash the team has already spent on its practice facility. 

Sen. Mike Young, R-Indianapolis, was the lone no-vote. He believes the legislature should allow certain taxes included in the bill to expire, as they would without this legislation, over the next decade, including on tickets and car rentals.

Earlier: The Indiana Pacers, Indianapolis officials and state lawmakers are negotiating a deal that would keep the team in town for 25 more years, IndyStar has learned.

It's unclear how big a chunk of change would be involved in such deal, which is much longer than recent agreements with the team. The Pacers' current deal, $160 million in public money for a 5-year lease extension, expires in 2024. The team uses the public cash for operations and improvements at Bankers Life FIeldhouse. 

Former state Sen. Luke Kenley, who is lobbying for funding for the deal on behalf of the Pacers, told IndyStar the preliminary deal being discussed would last 25 years from the day it's signed. That's the minimum duration allowed under legislation filed in the Indiana Senate. 

Kenley said Pacers owner Herb Simon, who is 84, is motivated to cement the Pacers' legacy as Indianapolis' home team.

"He's thinking of the heritage and all of the things he went through with the team for 40 years," Kenley said, "and he thinks it's important to stay here."

Earlier coverage: Pacers would stay long-term, Indy Eleven stadium has outside shot in proposals worth millions
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The Pacers have been floating the idea of publicly funding upgrades to Bankers Life Fieldhouse for two years. Kenley said the team wants to build upon the interactive fan experience, but didn't have specifics.  

Pacers and Indianapolis officials spoke Thursday at the Senate Appropriations Committee in favor of Senate Bill 7, which would create a funding mechanism for the deal. While that bill appears to have broad support, an effort to fold in similar legislation for the long-discussed Indy Eleven soccer stadium is more of a long shot.

Chairman Ryan Mishler said he expected to hold a committee vote Feb. 21 on the Pacers bill, which doesn't explicitly spell out the length or cost of any agreement with the team. If approved, it would then go to the full Senate.

The CIB, which manages the fieldhouse, Indiana Convention Center, Lucas Oil Stadium and Victory Field, wants to lock up tens of millions in annual revenue through a deal with the state.

Mishler's bill would raise $8 million to $8.5 million annually in taxes for the CIB from 2022 through 2041 for Bankers Life Fieldhouse and the CIB's other venues.

Revenue for any deal would come from a mix of existing income, sales, innkeepers, admissions and auto rental taxes collected mostly from within districts located Downtown. None of those taxes would rise, but without these districts, that money would otherwise flow to the state, city, townships, schools and city-county library.

"We think this is a terrific first step and we are committed, we want to be clear, with moving forward with something that does not create new taxes or new fees," CIB president Melina Kennedy told the committee. 

Convention Center would be expanded

The deal being sought at the statehouse includes a significant expansion of the Indiana Convention Center that tourism and city officials say will launch Indy into the upper echelon of convention cities. 

Under the terms being discussed, the city would direct $120 million from similar special taxing districts for a 300,000-square-foot expansion of the center on Pan Am Plaza, including a 50,000-square foot ballroom. A covered walkway over Capitol Avenue would connect that space to the main convention center.

Kite Realty Group proposed last fall to build two Hilton-brand hotels, connected to the convention space with a total of 1,400 rooms, including a 38-story tower that would be a rare addition to the skyline. Those projects would be in the taxing districts.

The city also will direct $18 million from taxing districts to two other hotels being under construction near Bankers Life Fieldhouse. 

Visit Indy Vice President Chris Gahl told the committee the convention center's capacity is around 70,000 event attendees. With the new space, he said conventions could draw another 20,000. 

"Over the last two years we’ve heard from a growing number of the city's largest conventions who said they are literally outgrowing our city," Gahl said. 

The Pacers generate $370 million in annual economic impact, according to a study the team commissioned from Indiana University Public Policy Institute.

Indiana Chamber of Commerce president Kevin Brinegar said the Pacers and the CIB are vital to the success of the entire state and urged support of the bill.

"The Indiana Pacers have been here since 1967 when they were founded," Brinegar said. "I am proud and a little bit embarrassed to say I attended a few games that very first year with the help of my parents taking me there."

Indy Eleven want stadium funding, too

Indy Eleven owner Ersal Ozdemir wants the committee to fold in legislation that would fund a $150 million, 20,000-seat soccer stadium, which he hopes to use to lure a Major League Soccer team.

Sen. Jack Sandlin, R-Indianapolis, proposed a bill that would raise up to $11 million a year for 32 years in taxes for the stadium in a special taxing district similar to the ones utilized by the CIB.

Mishler won't give that bill a hearing. But he allowed Ozdemir to pitch his proposal Thursday as a possible addition to his own bill.

Ozdemir proposes a $400 million development called Eleven Park, which would include restaurants, shops, offices, apartments and a parking structure at a to-be-decided location. The legislation would allow the CIB to collect taxes from that development to fund the soccer stadium. 

Under the bill, the CIB would manage the tax money, as it does for the Pacers and Colts. Ozdemir has pledged that his six-year-old franchise would pay for any shortfalls if the development does not generate enough taxes to cover the cost of the stadium. 

The reality, though, is the stadium would be publicly owned. If Ozdemir is for some reason unable to cover debt service as he pledges, the city or state might feel obliged to bail him out. 

Call IndyStar reporter Chris Sikich at 317-444-6036. Follow him on Twitter: @ChrisSikich.