About That CIB Bailout Meeting Tonight

Yes, it is is true. I had a bit of a dust up with CIB President Bob Grand at tonight's Municipal Corporations Committee meeting on the CIB's proposed $48 million bailout deal. Let's set the record clear. At the beginning of the committee meeting, Chairman Michael McQuillen announced that the Indiana Pacers and the Indianapolis Colts turned down an invitation to send representatives to attend tonight's meeting and explain why taxpayers should dig deeper into their pockets to subsidize their professional sports enterprises, but CIB President Bob Grand and CIB Vice President Pat Early appeared in their place on behalf of the CIB. I explained during my testimony at tonight's hearing that the Indiana Pacers were well-represented at the meeting by CIB President Bob Grand, who represents the Simons and Indiana Pacers. After a well-received applause from the audience, Grand said he was happy to see that I finally appeared in public to cast my aspersions against him, which he claimed were false. Grand added that nobody reads my blog anyway, which I assume included him since he knew what I had to say about his role as CIB President. Grand told the committee that he did not represent the Indiana Pacers; his law firm represented the Pacers. Laying aside the fact that he's the managing partner of the firm, let's chuckle and just move along. [If you want to see the video of last night's meeting, click here and highlight the video for the April 16 meeting of Municipal Corporations Committee. My statements begin at 1:09 on the video.]

I want to thank Councilor McQuillen for conducting the first public hearing at which someone other than the interests of the professional sports team owners were represented. I encouraged him to hold at least one public hearing at which the public could speak without all of the interference from the CIB mouthpieces. Members of the public were allowed just 2 minutes each to speak after the CIB representatives spoke for more than an hour to the committee. If committee members were listening closely tonight, they learned the following:

• The CIB does not own Lucas Oil Stadium. If it cannot afford the $20 million in added costs to operate it, it is within its rights to return the leased facility to the state-run authority that built it. CIB President Grand backed off his ridiculous claim he made a couple of weeks back that LOS would be shuttered if this bailout plan before the legislature is not approved.
• The CIB is not contractually obligated to hand over the $15 million a year the Pacers are demanding to cover operating and maintenance expenses on Conseco Fieldhouse.
• Bob Grand told the Committee the CIB has been operating at a deficit every year since 1999.
• Increasing the alcohol tax to fund a bailout could lead to the exodus of certain businesses within the alcohol industry to neighboring counties and Marion County-based businesses could see a loss of business to neighboring counties.
• John Dora of Dora Brothers hotels explained that the increase in the innkeeper's tax could be detrimental to his hotel and other hotels in Indianapolis like his which did not receive public subsidies like the Conrad Hilton and the J.W. Marriott convention hotel complex being built by billionaire Dean White of White Lodging. His message contradicted published reports in local media suggesting that the hotel industry in the City is on board in making Indianapolis' innkeeper's tax the highest in the country. Adding sales tax to the mix, the tax would reach 17%.
• Representatives of the car rental business explained to the Committee that the tax is paid largely by members of the local community and not by out-of-towners as suggested by the proponents of the CIB bailout plan. Increasing this tax in Marion County yet again to fund the CIB could lead to an exodus of business in this sector across the county lines.
• Representatives of the CIB could not respond to questions about the fuzzy math of the proposed tax increases as indicated by the Legislative Services Agency's analysis of the Ballard CIB bailout plan. CCC advisor Jim Steele says he needs more time to study the numbers.
• Representatives of the CIB could not explain why debt of the CIB had been converted from long-term fixed rate bonds to risky interest rate swap notes, which resulted in a $17 million penalty payment to the CIB, and which was covered by an emergency loan from the State of Indiana due in June of this year.
• The CIB is distributing more than $2 million in grant money to various groups, including the arts.
• The CIB is distributing $10-$12 million annually to the ICVA, which it defended as its marketing arm for the convention business.

Kudos to Councilor Ed Coleman, who had the courage to ask CIB President Bob Grand publicly if he should consider resigning from the CIB because of his conflict of interest. Grand became red-faced at Coleman's suggestion and insisted that he had fully disclosed his conflicts when he accepted the appointment to the Board by Mayor Greg Ballard. Councilor Lutz rushed to his defense, criticizing Coleman for casting aspersions at Grand for volunteering his service to the CIB. Democratic Minority Leader Joanne Sanders offered the Democrats' plan for expanding the professional sports development area to capture the sales tax revenues from Circle Centre Mall and the establishment of a downtown casino as a way of funding the CIB bailout without a tax increase. My problem with the Democratic plan is that it assumes the need for a bailout, which has not been proven to date, and it simply feeds the CIB monster and allows for even greater unwarranted subsidies for the billionaire sports team owners.

On those parking fee increases the state bailout legislation includes, Councilor McQuillen said Mayor Ballard's administration insists that was a mere "typo" in Sen. Kenley's drafting. The CIB seems to be singing a different tune on that one. The CIB is looking at raising rates as much as 20% on more than 7,000 parking spaces it controls downtown according to WTHR's Mary Milz. "CIB Executive Director Barney Levengood recently told the CIB Finance committee, 'You could raise them a buck or two. Where there's demand, we can raise rates and get more money for the CIB.'" Here's the kicker to Levengood's statement: "But Levengood said they'd have to consult with the Pacers before making any changes." Hey, you got to hand it to Levengood for his candor in telling us who's really calling the shots at the CIB, unlike its president, Bob Grand.

UPDATE: WIBC is the only local news source that has directed any attention to the issue of Bob Grand's conflict of interest discussed at last night's meeting. Brendan O'Shaughnessy's story in the Star completely omits any mention of it. WIBC's Stan Lehr writes:

It's not just the bloggers pushing it now.

A member of the City County Council is suggesting resignation to the head of the embattled Capital Improvement Board. It had gone unsaid in polite company until Libertarian Ed Coleman brought it up at a meeting of a Council Committee. The bloggers have repeatedly attacked CIB President Bob Grand, who is also managing partner of the Indianapolis office of the law firm Barnes and Thornburgh. The firm represents the Indiana Pacers, one of the key players in the CIB budget crisis.

Coleman told Grand he was stating a suggestion as much as a question when he asked, "Have you recognized there is a possible conflict of interest and considered resigning so we can get someone on this board who represents the citizens and not the Simons?" That's a reference to the Simon brothers, owners of the Pacers.

Grand says he has acknowleged his position and has sometimes abstained from votes to avoid any conflict. And to the suggestion that he step aside, he said, "I strongly disagree." He referred to "aspersions" cast on blogs that "not many people read." That brought jeers from some in the meeting room. Grand was there, at least. The Pacers and the Colts declined the committee's invitation to attend the meeting.