INDIANAPOLIS — There is still a long, long way to go, but the Indianapolis City-County Council took its first steps this week to funding the Capital Improvement Board, but postponed action related to keeping the Indiana Pacers.
On Tuesday, the City-County Council Rules and Public Policy Committee approved the expansion of the Professional Sports Development Area, to help capture tax revenue to fund the Capital Improvement Board. The proposals are the city’s part of a bill passed into law by the Indiana legislature, Senate Bill 7.
Why is any of this necessary?
In 2028, some of the revenue sources put in place in 2008 will expire. The reason that year was chosen to have a lot of the income sources sunset is because the Indiana Convention Center was expected to be paid off — which is still on track to be paid off by that year.
“But, it certainly doesn’t create any kind of framework for revitalization, reinvestment,” Mary Solada, general counsel for the CIB, said at Tuesday's meeting. “Meaning we’re stuck with the resources we have and we can’t build anything new, we can’t make new deals. So, it’s not, frankly about the Pacers, it’s about creating a revenue stream that will allow us to maintain these very important assets, all of which are very expensive to maintain.”
A PSDA is a state-authorized area that captures sales and income tax from downtown Indianapolis hotels, Bankers Life Fieldhouse, Victory Field and Lucas Oil Stadium. The following hotels could be added to the PSDA: the Hyatt Place, the Conrad, the Crowne Plaza, Embassy Suites, Omni Severin, Hilton, Sheraton and the Alexander.
The new PSDA would allow the CIB to get up to $9 million in 2022, up to $12 million in 2023, up to $16 million from 2024-2033, and up to $18 million in 2034-2041. Anything the hotels raise past those numbers will go back to the state.
Without the PSDA, all the sales tax from those hotels and sports complexes would go directly to the state.
“That state sales tax wouldn’t, under any other circumstance, be coming back to a local unit of government,” said Thomas Cook, chief of staff for Mayor Joe Hogsett. “It would be going to the state general fund. This is, for the general assembly’s perspective, the state’s contribution to the long-term financial sustainability of the CIB.”
At Tuesday night’s meeting, the Rules and Public Policy Committee approved the expansion of the PSDA, as well as the extension of the sales taxes (past 2028). The committee also extended the county’s admissions tax, extended the auto rental excise tax and approved the borrowing of funds from the state for the CIB. Those three proposals will head to the full council.
However, the committee postponed action on another three proposals, so the councilors could get more information on them. Those proposals included approving a bond and appropriations for renovations and improvements for Bankers Life Fieldhouse.
The next steps are for the City-County Council to approve multiple proposals related to the funding this summer, then the Indiana State Budget Committee will make sure that all necessary steps have been followed. Then, it’s to the Indiana treasurer and Indiana State Budget Agency.
The Indiana Pacers have a Aug. 1 deadline, so the clock is ticking.
“We need to button down some final state approvals by Aug. 1, which is our drop-dead date, if you will, with the Pacers,” Solada said. “We need to have all approvals by then, or either party can say, ‘We’re out of here.’ We obviously don’t want that, nor do the Pacers. This is on a relatively fast track.”
