The Indiana Senate passed legislation Tuesday morning that would boost funding for Indianapolis' Capital Improvement Board, keep the Indiana Pacers in town for at least another 25 years and provide support for a dedicated soccer stadium for the Indy Eleven.
Senate Bill 7, authored by Senate Appropriations Chairman Ryan Mishler, passed 48-1. Sen. Mike Young, R-Indianapolis, provided the only no vote. The bill heads to the Indiana House for further consideration.
The legislation would provide up to an additional $15 million in tax funds annually for the CIB for sports and hospitality projects, likely including renovations at Bankers Life Fieldhouse.
Mishler said on Tuesday that the Pacers would be expected to contribute $115 million toward renovations, but that is not specified in the legislation and it's not clear whether the team will be credited for any of the money it has spent on previous projects, such as the $50 million St. Vincent Center, the team's practice and training facility that opened in 2017.
The bill also would allow up to $8 million annually to be used to fund a soccer stadium.
But all of the new funding would come with a catch: The CIB would have to sign an agreement by April 1 to keep the Pacers in Indianapolis for at least 25 more years and sign an agreement with a Major League Soccer team stipulating the team would stay in the city for 25 years.
The Eleven currently plays in the second-tier United Soccer League, and the Pacers’ lease at the fieldhouse expires at the end of 2024.
The bill, as amended Monday, would give the Eleven three years instead of the initially proposed two years to join the MLS and sign a deal with the CIB.
The team would also have to kick in 20 percent of the stadium construction costs.
As proposed by Indy Eleven owner Ersal Ozdemir, the $150 million, 20,000-seat soccer stadium would be part of a $550 million, mixed-use project called Eleven Park. The residential and commercial parts of the project would be privately funded, but Ozdemir proposed that the stadium would be funded with tax revenue generated by the larger Eleven Park.
The CIB, which owns Bankers Life Fieldhouse, Lucas Oil Stadium and the Indiana Convention Center, already receives $169 million annually—80 percent of its revenue—in state and local tax dollars that it uses for operations and to pay off bonds for buildings.
The new revenue for the CIB would come from extending the life of multiple tourism- and entertainment-related taxes, expanding the footprint of what’s known as a Professional Sports Development Area and increasing the amount of revenue the CIB could collect from the PSDA.
The existing PSDA is a zone mostly downtown that captures state income and sales tax revenue generated at Lucas Oil Stadium, Bankers Life Fieldhouse, Victory Field, the Indianapolis Colts’ northwest-side practice venue and four downtown hotels.
Tax revenue from the sports venues within the PSDA is currently capped at $16 million, and tax revenue generated from the four hotels in the PSDA is capped at $8 million.
The bill would expand the PSDA to include the two Hilton-branded hotels that have been proposed in conjunction with the planned convention center expansion at Pan Am Plaza, as well as the 316-room Hyatt Place/Hyatt House that is under construction on Pennsylvania Street across from Bankers Life Fieldhouse, starting July 1. The annual tax revenue the CIB would receive from the additional hotels would be capped at $7 million annually.
The expanded PSDA would also include several areas within a 2-mile radius of Monument Circle. That new area already includes four hotels—the Conrad Indianapolis, the Crowne Plaza, Embassy Suites and Omni Severin—and more hotels are expected to be built within that zone.
The state would collect the first $6 million generated in this section of the PSDA, and the CIB would receive the next $8 million, with a total cap of $14 million. The state would receive any revenue generated beyond the cap.
The bill also would allow the CIB to continue receiving revenue from an auto-rental tax and admissions tax through February 2038. The auto-rental tax, which generated $7.2 million for the CIB in 2017, and the admissions tax, which generated $15.1 million in 2017, will otherwise both expire by the end of 2027. Extending those taxes would require action by the Indianapolis City-County Council.
The CIB would use the extra revenue, at least in part, to replace $8 million in operating revenue that it plans to redirect to pay off bonds for the proposed $120 million expansion of the convention center.
In addition to having to sign a long-term deal with the Pacers, state lawmakers included another caveat to the funding. Two of the positions on the CIB would be appointed by the governor rather than the mayor of Indianapolis and Marion County commissioners.
The nine-member board currently has one position appointed by the county commissioners, one from the City-County Council, six from the mayor and one person from the surrounding counties that pay into the stadium tax.
Sen. Jim Merritt, R-Indianapolis, said the city is in a race with other major metropolitan areas, such as Dallas and Charlotte, to attract top conventions, so continuous upgrades to facilities are needed.
“Your support of Senate Bill 7 will help us compete,” said Merritt, who is running for mayor of Indianapolis.
It’s uncertain how the bill will be received by House Republicans.
“We have not talked about it yet,” House Speaker Brian Bosma (R-Indianapolis) said on Tuesday morning. “It will take some work.”