INDIANAPOLIS (AP) City and state officials have removed a $48 million roadblock in the construction of a new downtown stadium for the Indianapolis Colts.

The deal resolves the issue of who pays a lease termination fee to the Colts for moving out of the RCA Dome. State officials had said the payment was the city’s responsibility, while Indianapolis Mayor Bart Peterson said the city could not afford it.

Under the agreement, $40 million will be paid by contingency funds the state had built into its financing package. The extra $8 million will be added to the project’s total cost, which already is projected to exceed $900 million.

“The most important thing for Indianapolis and central Indiana is for this important economic development project to move forward,” Peterson said. “I am very pleased that, working together with the governor and his staff, we have come to a resolution that will create jobs and investment in our community.”

Gov. Mitch Daniels has been traveling recently to the seven suburban counties that are being asked by the state to approve a 1 percent food and beverage tax to help fund the project.

“As I have said all over central Indiana these last few weeks, the stadium and convention center project is an important investment for central Indiana’s future,” Daniels said. “I am glad these financial issues have been resolved and the parties can focus on wrapping up the Colts lease and development agreement as soon as possible.”

Also, to keep the stadium and expanded convention projects moving forward, the city and state agreed that the city’s Capital Improvement Board will continue with some current projects and contracts until the authority completes the financing. The state then would reimburse the board for costs it continues to incur.

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