INDIANAPOLIS (AP) The Indianapolis Colts and the city have agreed in principle on a new stadium and a 30-year lease by the NFL team.
Team owner Jim Irsay, Mayor Bart Peterson and other officials participated in an announcement on the field of the RCA Dome before the Colts’ nationally televised game Dec. 19 against the Baltimore Ravens.
Television stations WISH and WTHR reported Irsay and Peterson had agreed in principle on terms including the construction of a new stadium with a retractable roof and seating for 63,000 fans. It would be located on a site about a block away from RCA Dome, the Colts’ home since the franchise left Baltimore in 1984.
The Colts’ current lease runs through 2013 but includes an escape clause that could take effect after 2006. The city can prevent the Colts from exercising that clause by making payments, expected to exceed $10 million, twice in three years to keep the team at the NFL’s median income level.
Among the factors driving the city toward building a new stadium has been the Colts’ desire to earn more revenue than they do now at the RCA Dome, which has the smallest seating capacity among current NFL stadiums at 55,506.
Also, the city wants to expand the adjacent Indiana Convention Center and recapture business that has outgrown the center, prompting some large groups to relocate their meetings to other cities.
Peterson and Irsay have both said they were working to strike a deal so it could be presented to the General Assembly, which begins its next session Jan. 4. Lawmakers may need to approve taxes or other funding mechanisms for the deal.
Pull-Tab Financing Uncertain
The new stadium could face stiff opposition, however, because its funding relies on gaming revenue.
Peterson on Dec. 20 proposed asking state lawmakers to legalize slot machine-like devices to help finance the stadium, an idea that state lawmakers have resisted in recent years.
He also said the project as envisioned would need at least $40 million in annual revenue from electronic pull tabs at off-track betting parlors.
Indiana House Speaker Brian Bosma (R-Indianapolis) said he does not favor using gaming revenue to help build the stadium.
“Personally, I think linking any major economic improvement like the dome to the expansion of gaming in our state is a mistake,” said Bosma.
Under the stadium plan, Colts owner Jim Irsay and the NFL would contribute $100 million in loans toward the cost of the stadium, Peterson said.
The city would ask lawmakers to approve pull tabs for horse racing tracks in Anderson and Shelbyville and an off-track betting parlor in Indianapolis to help finance the stadium, said Steve Campbell, a spokesman for Peterson.
Other proposals to bring pull tabs to the tracks and OTB, seen as a key to saving the state’s horse-racing industry, have failed the last two years.
Peterson said building a new stadium and expanding the convention center would generate $2.25 billion in economic development in the city over the next decade and create 4,200 permanent jobs and 4,900 temporary construction jobs.
The two projects would cost about $900 million, of which $800 million would have to be provided by public funds, said Campbell.
City officials estimated that the overall cost could reach as much as $990 million, factoring in up to 10 percent for unexpected expenses along with some $125 million for land acquisition, legal and design costs.
Peterson indicated he would listen to other funding alternatives if the pull-tab financing does not work out.
“I want to be flexible. There are a lot of ideas floating around,” he said.
Bosma said the Legislature must first assess whether a new dome and expanded convention center are needed and then decide what mechanisms would be used to finance them.
In a statement, Gov.-elect Mitch Daniels said the state’s budget deficit precludes using any state funding for a new Colts dome. He called Peterson’s proposal “one possible way to finance this agreement.
“This plan and any alternative raises large fiscal and social questions, so it’s well that the debate has gotten started,” Daniels said.
The Rev. John Wolf, coordinator of the Indiana Coalition Against Legalized Gambling, said the group would fight any pull-tab legislation in the next session.
Wolf called Peterson’s proposal “tragic” and a surprise. He said the sporting world has tried to distance itself from the gambling industry in recent years, and this would be a blow.
“To tie these two together in this kind of a venue is tragic, not only for Indianapolis but for the sporting world. It’s practically turning it over to the gambling industry because it will be dependent on them,” Wolf said.
The NFL’s policy on gambling prohibits players, team officials and owners from advertising or promoting activities “that can reasonably be perceived as constituting affiliation with or endorsement of gambling.”
NFL spokesman Greg Aiello said the league was informed of the deal between the city and the Colts but was not aware that part of it hinged on gambling money.
“Nothing precludes a team from playing in a stadium funded in part by gaming. But there has to be a clear separation between gambling-related activities and the team, and that’s a long-standing policy,” Aiello said.
Sen. Luke Kenley (R-Noblesville) said he supports both the stadium and convention center expansion but does not believe pull tabs would be a good financing mechanism.
“Gambling is not the most stable of revenue sources,” he said. “I think the mayor in the end may have to try to find some other funding source for this project.”
Senate President Pro Tem Robert Garton (R-Columbus) said the proposal would likely be opposed by the state’s riverboat casino interests because they would see pull tabs as competition that would siphon off their patrons.