(indystar.com) The city and the Pacers are expected today to announce an agreement hailed by some as an important step in protecting the financial state of the city but criticized by others as a multimillion-dollar bailout of a professional sports team and its billionaire owner.
The deal comes after months of negotiations between the NBA franchise and the Capital Improvement Board, which operates the city’s sports venues. It supplements the existing contract between the parties, which lasts through 2019.
The idea of providing money to a sports franchise has incited criticism by some, but city leaders insisted they have been tough negotiators. They didn’t agree to cover the full operating cost of Conseco Fieldhouse, estimated at $15 million to $18 million per year, or the roughly $25 million in capital improvements the Pacers said were needed at the fieldhouse. And they locked in what they called an important addition to the Downtown economy for three years.
“The mayor has said we need to protect the taxpayer and we need to protect the tax base,” said Robert Vane, deputy chief of staff and communications director for Mayor Greg Ballard. “This agreement does both.”
Under the terms, control of Conseco Fieldhouse — and revenues from all events there — will remain with the team, but unlike the current contract, the city will chip in $10 million per year for fieldhouse operations for the next three years. The city also will pay at least $3.5 million for capital improvements at the fieldhouse, an amount that has the potential to increase by up to $4.7 million.
In exchange, the Pacers must stay in Indianapolis through the 2012-13 basketball season or pay back the entire $30 million. The team also would be on the hook for a portion of that $30 million if it left before its contract expired in 2019.
For example, if the team left in 2016, it would pay back $19 million; if it left in 2018, it would pay back $7 million. That would be in addition to the termination fees — estimated at $20 million– spelled out in the existing agreement.
If the Pacers stay through the end of their current contract, which ends in 2019, they would not have to pay any of the money back.
So, is the new agreement a good deal for taxpayers? The answer to that question seemed to depend entirely on whom you asked Sunday evening.
“I think we have gone so far overboard in subsidizing professional sports in this city that it’s insane,” said Fred McCarthy, a local political blogger and nearly 50-year Indianapolis resident. “I just think it’s ridiculous that brilliant businessmen who have made themselves billionaires in the market, in the business world, can operate a business in a rent-free building and continue to lose money while they’re doing it.”
