Indiana senate committee rejects new Indy Eleven stadium, okays $20m in renovation cash

The Indiana state senate means business with this Indy Eleven stadium renovation thing: The senate tax and fiscal policy committee headed by Brandt Hershman voted 13-0 yesterday first to reject spending $82 million on a new stadium, then voted unanimously as well to put $20 million in renovations of IUPUI’s stadium, where the NASL team currently plays, instead.

So how would this work, exactly? The state’s money would come mostly from a 10% ticket tax on events at the stadium, which according to projections for a new stadium could maybe just about barely be enough to pay off $20 million in state costs. Not that Hershman came up with that $20 million figure by seeing what the team could generate, either — he indicated that the number came from “rough estimate from IU for improvements,” so it’s more about the university’s wish list than what new tax revenue could actually pay off. Also, the city of Indianapolis could be asked to kick in some renovation money, as would Indy Eleven owner Ersal Ozdemir, if he wants more extensive upgrades.

In exchange … you know, I can’t find anything in the Indiana house bill that the state senate just amended to indicate what, if anything, Indy Eleven would be committing to. Presumably they’d have to sign some lease on the place, but it seems like the number of years they’d be signing up for, and whether they could demand further subsidies by threatening to leave town, would be key. Not that Indiana would ever sign a lease letting a team get away with anything like that.

So, in short: Much smaller public cost? Good! Reusing existing buildings when possible? Good! Throwing more than $20 million at your local one-year-old minor league soccer team just because they asked for four times that amount, without knowing what if anything they’re promising in return? Still not so good even at that price, so state legislators have some work to do to make sure this is actually worthwhile, not just less wasteful — but I’m sure we can trust Indiana elected officials to do the right thing, right? (Stop giggling.)

Indy Eleven exec doesn’t dismiss renovated IUPUI stadium out of hand, pigs seen airborne

Indy Eleven president Peter Wilt has responded to Indiana state senator Brandt Hershman’s proposal to renovate IUPUI’s stadium for $20 million instead of building a new one for $82 million, and … he doesn’t hate it!

“Our partnership with Indiana University and IUPUI has been a critical part of our initial success, and having the campus option as a possibility for the stadium is one that we support,” Wilt’s statement said…

“We understand that the legislative process is a long journey and we look forward to continuing this dialogue … on Tuesday,” Wilt’s statement said.

Okay, that’s not exactly jumping for joy, and may well be nothing more than an acknowledgment that they know they have to work with the state senate on any stadium deal, not dismiss its proposals out of hand. Still, it does open up the possibility of renovation as an alternative, which is both 1) a possible way to save the state a ton of money and 2) the kind of thing that sports team owners typically dismiss out of hand with some statement about needing a “state of the art” facility. (Or, as a New York City development official once said of the Yankees‘ demands for a new stadium, renovations couldn’t provide “an adequate number of ladies’ rooms.”)

So, would $20 million for stadium upgrades for a minor-league soccer stadium be a good deal? That all depends on what the state would be getting back: If it’s some actual rent payments or revenue sharing, or a long-term lease for the team (as much as any NASL team’s signature on a lease can ever be said to be “long-term”), or something that IUPUI will actually be able to get some use of, then sure, maybe. In any case, $20 million would be a lot less of a heavy lift to make work than $82 million, and not building a whole new stadium when you have an old one that is already drawing well is always a good idea for everyone’s budget and carbon footprint. It’s bad for construction workers, I guess, but they can work on the renovations, and that extra $62 million will end up being spent on something. You see why I’m not generally a fan of new stadiums at all when it can be avoided? It’s really not just that I don’t like cupholders.

Indiana senator proposes ditching $82m Indy Eleven stadium plan, renovating IUPUI stadium instead

As predicted, Indiana state senator Brandt Hershman waited until the Friday media dead zone to announce his plan to fund a new $82 million stadium for the Indy Eleven NASL minor-league soccer team — which is a shame because everyone missed the surprise twist, which is that Hershman doesn’t plan to fund one at all:

Indiana University would issue up to $20 million in bonds to renovate IUPUI’s Carroll Stadium in an amendment being introduced by Sen. Brandt Hershman, R-Buck Creek, chair of the committee that’s handling the stadium bill.

The team would have to pay for expenses beyond the $20 million and whatever the city of Indianapolis contributes. The team would also have to sign at least a 20-year lease. A senate committee vote on the plan is scheduled for Tuesday.

Well, sure, that makes plenty of sense to look at: $20 million is a lot less than $82 million, and if the team isn’t a long-term success at least the local public university would have a shinier stadium to play in. (Not that that’s probably what it needs the most, but that’s another story.) And Indy Eleven is already drawing well there, so if any economic benefits you’d get from the team playing in a new stadium would probably accrue from them playing in an upgraded old stadium as well.

We’ll see tomorrow what the exact details of the plan are and how it would all be paid for, but for now, nice thinking outside the box, Sen. Brandt Hershman, R-Buck Creek! Indy Eleven owner Ersal Ozdemir will no doubt not be pleased, but $20 million in free renovations would still be nothing to sneeze at.

Indiana senator has plan to fund MLS stadium, won’t say what — hey, didn’t we just do this headline?

Looks like Wisconsin isn’t the only state senate that can announce new sports venue finance plans without actually saying what they are: Brandt Hershman, chair of the Indiana state senate’s tax and fiscal policy committee, announced yesterday that he’d be introducing an amendment today to rework the Indy Eleven stadium financing plan, which has twice passed the state house but never made it through the senate. And Hershman’s new plan would be:

Hershman declined further comment.

Okay, then! Nothing yet on Hershman’s website or his Twitter, but it’s only 2 pm — maybe he’s planning one of those special 5 pm Friday announcements so that it makes the 6 o’clock news but nobody’s around to answer questions. (Note to any Indiana journalists: I’ll be around late this afternoon to answer questions.)

TV station lands interview with Indy Eleven exec, forgets what “interview” is supposed to mean

Is this WRTV6 report on the proposed Indy Eleven stadium perfectly inept? Let’s count the ways:

  • Parrots the team owner’s claims about how much money will come from stadium ticket taxes, even though the team’s own projections contradict that? Check!
  • Talks to only one source, a team exec wearing a team scarf? Check!
  • Video of a stadium rendering flyover, plus video of exciting soccer footage? Check!
  • Softball questions about “Should we trust you?” followed by the interviewer himself opining that any claims that the team isn’t trustworthy “are just not true”? Check!
  • Interview subject claims that unlike other projects, this one has assurances in place that it “will not fall on the public’s shoulders,” and the interviewer then ends the segment without even asking what those assurances are? Check!

That, my friends, is some bad alleged journalism. Indy Eleven president Peter Wilt must have gotten lots of high fives on returning to the office, for putting across the team’s media message perfectly without having been challenged at all. Not that any of it will likely sway the state senate, but free televised PR time is never something to turn up your nose at.

Indiana senate president says “funding our priorities” takes precedence over Indy Eleven stadium

So apparently the amendment to require that Indiana can only lose half its shirt on an $82 million Indy Eleven soccer stadium isn’t the only thing up in the air in the state senate: After the stadium funding bill passed the state house yesterday, senate leaders now say they might not even bring it up for a vote this year:

At a news conference before the House vote, Senate President Pro Tempore David Long, R-Fort Wayne, said there are other priorities before the soccer stadium.

“I don’t get too excited over it, but at the same time, I haven’t delved into it too deeply this year,” Long said of the stadium. “We’re really focused on funding our priorities. Those have to come first. If the soccer stadium makes fiscal sense, we’ll certainly consider it. … That’s an additional issue that might have to wait … and even then, I don’t know where it would go.”

This is pretty much the exact same thing that happened last year, which is why the stadium bill is being considered now instead. Long hinted he might be willing to consider the stadium once the state gets updated revenue forecasts in April, but it’s impossible to know whether that’s “I want to be sure we have the money” or “I want to wait until I can point to all the other things we need the money for.” In any case, a bill to give $82 million in public money to the owner of a minor-league soccer team so long as he promises to stiff the state on paying back no more than half of it is now dependent on the whims of one state politician, which is a pretty good microcosm of democracy in America today.

Indiana house to require Indy Eleven owner to stiff public on no more than half of stadium costs

The Indiana legislature is good for something after all, sort of! Yesterday the state house passed an amendment to the proposed Indy Eleven soccer stadium deal that would require the team’s owner to guarantee that new tax revenues would cover at least half the state’s $82 million cost.

“The purpose of the amendment is simply to make sure the public is not left to foot the bill for an underused or empty stadium,” Rep. Ed DeLaney, D-Indianapolis, said Tuesday on the House floor.

DeLaney said he didn’t ask for a 100 percent guarantee because he wanted a “fair and measured approach.”

Man, I really want Ed DeLaney as my bank loan officer. “Now, you understand that you’re going to have to pay back the loan, right? Are you good for it? How about this: Can you at least promise that you’ll pay back half the loan, and we’ll eat the other half? I’m sure that will seem fair and measured to my bosses.”

Of course, repaying half the state’s costs would still be way better than even the team’s own projections, which couldn’t manage to come up with enough ticket tax money to pay off even that much. (And independent estimates, including my own, have it doing much, much worse.) Also of course, though, the devil is in the details here: If Indy Eleven’s owner could “repay” the money by pointing to, say, sales taxes that his fans are paying or something like that, this could quickly get into have-your-cake-and-eat-it-too territory. Plus the amendment still has to pass the state senate before it goes anywhere. But, Indiana, so be glad for even baby steps, I guess.

Indy Eleven’s own projections show $50 million ticket tax shortfall, state committee okays plan anyway

The Indiana state assembly’s ways and means committee voted 20-3 yesterday to move a bill forward to fund an $82 million stadium for the minor-league Indy Eleven soccer team, because that’s what they do in Indiana. The committee did, at least, discuss some new details of how team owner Ersal Ozdemir expects the stadium to generate $5 million a year in new ticket taxes:

The team released a report by KSM Consulting of Indianapolis that says the 18,500-seat stadium would open in 2018.

The report estimates 66 events per year, including 15 professional women’s soccer games and 10 concerts.

The report also estimates average paid attendance and average ticket prices for various events:

—Indy Eleven: 16,500 at $29.50.

—Women’s professional soccer: 8,500 at $17. (There is a nine-team National Women’s Soccer League.)

—Concerts: 10,000 at $55. (There is another outdoor concert venue planned for Downtown.)

The report estimates six events as “other soccer,” five as “other events, exempt” (from ticket taxes such as school sports) and 10 as “other events.”

The Indianapolis Star, which is where that’s from, didn’t do the math on what all that would add up to, so let’s do it for them. Let’s see, 15 Indy Eleven home games times 16,500 tickets per game times $29.50 per ticket (for minor-league soccer? okay then) times a 10% ticket tax is $730,000. Fifteen women’s soccer games would generate another $217,000. Concerts would provide $550,000. Even if you’re optimistic about those 16 “other” taxable events, then, you’re still looking at around $2 million in ticket taxes, tops, not even enough to repay half the state’s costs.

The headline here really should have been, well, the one I put on this post. Or at least “Indy Eleven stadium to need hotel tax money to supplement ticket taxes,” which is something else that came up at yesterday’s hearing. Instead we get “Indy Eleven stadium bill moves on, but lawmakers express reservations,” because journalism is all about reporting what Important People think, not giving readers the information to decide for themselves. Apparently.

Indy Eleven owner again asking for $87m for minor-league soccer stadium

All the MLS expansion talk of late has focused on Las Vegas and Minneapolis and Sacramento, but Indy Eleven owner Ersal Ozdemir isn’t giving up without a fight. Ten months after throwing in the towel on his plan to ask the state legislature for $87 million for a new stadium — partly because his ticket tax revenue projections were completely nuts, but likely more so because the head of the state senate told him he’d have a better chance in the 2015 session — Ozdemir is back, and raring to be having the state cut some checks with his name on them:

The Indy Eleven’s quest for funding for an $87 million downtown soccer stadium will resume Thursday, with Rep. Todd Huston, a Republican on the House Ways and Means Committee, expected to submit a bill with a funding measure for the facility.

Team officials expect the bill to get a hearing by the House Ways and Means Committee sometime in mid- to late January. If the measure is passed by this year’s General Assembly, Indy Eleven officials believe they could be playing in the stadium as soon as 2017.

In case you’d forgotten the details of Ozdemir’s stadium plan since last year — and you’ve got to think Ozdemir is hoping you have — the state of Indiana would send him annual $5 million payments, which it would recoup by collecting a 10% ticket tax on seats sold at the stadium. Except that the average MLS team only sells about $8 million a year in tickets, which would only bring in $800,000 a year in tax revenue; the research arm of the state legislature says it would be more like $200,000-400,000 a year. If that’s the case, the state would be left paying off the team’s stadium costs by kicking back income and sales taxes that otherwise would go into state coffers like normal people’s income and sales taxes do.

Ozdemir is touting the team’s sellout of all 14 home games last year as a minor-league franchise as a selling point, which is all very nice, even if Advance Indiana points out that a lot of these tickets weren’t so much “sold” as “given away.” It doesn’t explain why Indiana should give him $5 million a year for his project, though — if the Eleven are doing so well at IUPUI’s 10,000-seat stadium, doesn’t that make the case that they don’t need taxpayers to build them a new one to draw fans? Or if he really thinks he can sell six times as many tickets as other teams in MLS (without an actual approved MLS franchise, mind you — this deal wouldn’t be contingent on getting a big-league team), maybe Ozdemir could take out a bank loan, raise ticket prices by 10% in lieu of a tax, and do the financing himself? I’m talking crazy talk again, aren’t I?

Indy Eleven owner: Wait till next year for $87m stadium request

The owner of Indy Eleven, the minor-league soccer team that hasn’t even played a game yet but is already looking for an upgrade to a major-league-size stadium, says he’s giving up on his quest for $87 million in state funding — for now:

“Having not been given a red card, we remain committed to working with legislators with an eye toward coming back next session and continuing the discussion about Indy Eleven’s successful launch and its economic impact on our community and state,” [Ersal] Ozdemir said.

A soccer stadium bill had already overwhelmingly passed a state house committee, so what happened? Notwithstanding the Twitterer who tried to credit me for the stadium’s momentary defeat (I did point out problems with Ozdemir’s ticket tax revenue projections and tell the Indianapolis Business Journal that they were “completely insane” — but then, a state agency later did a similarly gloomy analysis of ticket revenues, and economist Victor Matheson called the projections “absolutely crazy”), what seems to have happened is that the Senate president decided it’d be better to consider the bill next year:

Earlier Thursday, Senate President Pro Tempore David Long, R-Fort Wayne, said in a news briefing there seem to be more questions than answers about the proposed Indy Eleven soccer stadium and that it would be better handled next year, when the legislature passes a state budget.

“My take on it right now is this may be a good idea,” Long said. “It doesn’t seem like it’s completely worked through yet. I think it would be wise for everyone to take a deep breath, step back and look at it.”

Note that Long is from Fort Wayne, and the Indianapolis soccer bill was presented as an amendment to a bill to expand the Fort Wayne Coliseum, and Fort Wayne legislators didn’t want to risk messing with that. So instead everyone is agreeing to reconvene in 2015, when either the question of how to pay for $5 million a year in arena bonds with $200,000 a year in ticket taxes will be “completely worked through,” or enough time will have passed that everyone will have forgotten that the numbers are crazy insane.