Indianapolis is a city with big problems. Besides dirty air and raw sewage in our waterways, IU reports that Indianapolis lags the nation in building roads, schools and other public infrastructure that improves quality of life and helps companies thrive and create jobs.
That may account for Indy losing over 20,000 jobs last year. There’s a $100 million public pension shortfall and the mayor is afraid the Colts will leave. How does Mayor Peterson deal with these problems? Well, for the bad air, dirty water, lack of roads and good schools, he hired a public relations firm for $100,000 to work on “our image.” Peterson is addressing the pension shortfall by charging $100 million to the city’s credit card. But the crown jewel of this month’s Peterson Plan is how he plans to keep the Colts, expand the convention center and create jobs.
Recently, the city paid $114,000 for a supportive study by PricewaterhouseCoopers (PwC) that showed this project would boost the flagging local economy enormously, create jobs and keep Indy a “major league” city. To fund the $800 million project, Peterson has presented a bold plan, which will be financed by $1.5 billion in slot machine revenues over the next 30 years.
Since practically no one in the City-County Building has bothered to ask whether this study is valid, two of the nation’s leading experts agreed to analyze it.
Kevin Delaney, professor at Temple University, and Rick Eckstein, professor at Villanova, have examined the deal and recently presented their findings to a packed auditorium at the University of Indianapolis. They described ways stadium proponents neutralize opponents: ignore genuine academic research; create fantasy documents and change the subject to community self-esteem. Eckstein noted that fantasy documents like the PwC report are suspect because they are commissioned by the team or the city, have “unclear methodologies” that “contradict neutral academic research” and “never suggest new stadiums are a bad public investment.”
Delaney and Eckstein then deciphered the unclear wording of the PwC report and concluded that much was left out, exaggerated and poorly researched.
The economic impact is grossly overstated since much of the money spent at the stadium will leave the city in the pockets of Irsay, the players and outside contractors. Lastly, they found that in spite of a federal recommendation that no more than $30,000 be spent to create a job, this project would spend over $400,000/job. NUVO posed some questions to Eckstein.
NUVO: Building this expensive stadium will increase the value of the Colts considerably. Several experts have said the current contract could be easily broken. If Irsay decides to sell the team after getting the new stadium, will the new owner be bound by Irsay’s deal?
Eckstein: Good question. The city better make damn sure any agreement is transferable to new owners. The value of the team may double with a new stadium so Irsay will have many millions of reasons to sell.
NUVO: What can be done to end this?
Eckstein: At the federal level, Congress could rescind the anti-trust exemption but that’s not very likely. Locally, political leaders have to realize that they will be held accountable for selling out their constituents. Political graveyards are littered with the corpses of policy makers who supported stadiums.
NUVO: How would you describe the stadium/convention center deal being offered to citizens?
Eckstein: There’s no reason why the Colts can’t contribute more toward any new stadiums since they will be receiving all or most of the revenues. Given the state of the convention industry, Indianapolis is taking a huge gamble that an expanded convention center will provide a NET increase in overall tax revenues.
NUVO: Has there ever been a mayor with the courage to not cave in on these issues?
Eckstein: Yes. Laura Miller, mayor of Dallas. Generally, mayors are for stadiums while some council people will oppose them.
NUVO: Irsay gave $15,000 to Mayor Peterson’s campaign between 1999 and 2002. In the last four years he lavished over $100,000 on state elections, including $17,500 last year to Gov. Joe Kernan and $3,000 to Mitch Daniels. Will these donations help Irsay sell his plan?
Eckstein: It helps but contributions are not the primary reason officials go for deals like this.
NUVO: Is it usual for a city to offer a team $50 million to buy out their contract so the city can build a $650 million palace for them?
Eckstein: It is highly unusual! Delaney and Eckstein noted that there’s no evidence that the Colts even have plans to move and concluded that politicians are rarely if ever voted out of office for “losing” a team. Political offices are most at risk if the public realizes they’ve been screwed by a sweetheart deal like the Peterson proposal.
Jack Miller is a public interest advocate and freelance writer based in Indianapolis.