Scott Olson, The IBJ
solson@ibj.com
The agency that operates the city's sports stadiums and convention center is scrambling to fix its financial woes after state lawmakers adjourned Wednesday without approving a plan to generate more revenue.
The cash-strapped Capital Improvement Board, staring at a $47 million budget deficit next year, called an emergency meeting this morning to begin exploring its options.
On the cost-cutting drawing board: Renegotiating contracts with union workers and suppliers, suspending all grant payments, and asking the state for hep making a $27 million bond payment that comes due in September.
The CIB also has hired an Atlanta marketing firm to explore the possibility of selling naming rights at the Indiana Convention Center, which is undergoing a $275 million expansion.
It was not immediately clear how much money the various tactics would free up to cover the gap.
Legislators failed to take action on a bill that would have allowed Indianapolis to raise hotel, car rental and ticket taxes to help fund the CIB, which oversees Lucas Oil Stadium, Conseco Fieldhouse and the convention center.
Lawmakers could reconsider the issue when they convene in a special session to pass the state budget, but CIB President Bob Grand said he can't wait for a decision. A date for the session has not been set.
Still, whatever solution the CIB comes up with would need approval from both the General Assembly and the City-County Council.
"The circumstances are very challenging," said Grand, who admitted his surprise at the Legislature's failure to address the predicament.
Support for a bill faded at the state level after City-County Council members said they could not support a plan to increase taxes.
The $27 million bond payment coming due creates a time crunch. CIB member had hoped to borrow the money, but if the board needs to dip into cash reserves it could run short of money by the end of the year.
In an attempt to shore up its budget, the CIB already has made $8.7 million in cuts by reducing operating costs and the amount of funding it provides to local arts and cultural organizations. It also eliminated for one year a maintenance fund that contains $960,000 for emergency repairs to the buildings it manages.
Additional cuts could include reducing the hours of the parking garage the CIB operates on Virginia Avenue near Conseco Fieldhouse and raising its parking rates by 20 percent. Rates also could rise at lots near Lucas Oil Stadium and the lots on the former Market Square Arena site.
Still, those actions would not be enough to erase the deficit.
The CIB is facing a shortfall largely due to the additional $20 million required annually to operate the stadium, which is much larger than the RCA Dome. It also expects to absorb $15 million next year in Conseco Fieldhouse operating costs. The Indiana Pacers could break their lease there after 10 years, if the franchise is losing money. The Pacers lost $1.3 million in 2006-2007 and $6.5 million in 2007-08, according to Forbes magazine.
The CIB wants both the Colts and Pacers to shoulder some of the responsibility by contributing $5 million each to help wipe out the deficit. The teams so far have not agreed to the request.