CIB expects to lose money during Super Bowl

Scores of businesses in and around Indianapolis are licking their chops in hopes of scoring a windfall from the city’s hosting of the Super Bowl on Feb. 5.

But the city entity that manages Lucas Oil Stadium, where the game will be played, expects to lose money.

The Capital Improvement Board of Marion County is budgeting for total Super Bowl expenses of $8 million and revenue of nearly $7.2 million, leaving a loss of $810,000.

The largest expenditure is the $4 million CIB has agreed to reimburse the city for providing police security for an estimated 150,000 visitors. It also budgeted almost $2 million to pay full-time employees overtime and union members who have been hired temporarily.

The projected $200 million that visitors will spend at establishments in the metropolitan area during the days surrounding the event makes the deficit a little easier for CIB to absorb, said Dan Huge, the organization's chief financial officer.   

“For the overall good of the city and state,” he said, “we know that this is the right thing to do based on the economic impact it will have on the whole area.”

CIB relies heavily on hotel and food and beverage taxes, in addition to admissions and auto rental taxes, to generate annual revenue to operate its facilities.

Besides Lucas Oil Stadium, CIB manages Bankers Life Fieldhouse, Victory Field and the Indiana Convention Center.

CIB anticipates pocketing $3 million from the Super Bowl in additional tax revenue: $2.4 million in hotel taxes, $440,000 in food and beverage taxes, and $100,000 in auto-rental taxes.

An additional $794,000 in collected taxes will be paid the state of Indiana to help pare down debt related to the cost of building the stadium and convention center.

The total tax revenue generated during the days surrounding the Super Bowl equates to what the board typically earns from taxes in an entire month, Huge said.

Hotels and restaurants, however, won’t be taxing National Football League employees. They’re exempt from paying, according to an Indiana Department of Revenue directive.

The NFL is using its tax-exempt status as a 501(c)(6) to avoid paying the taxes, in addition to fuel, auto rental and admissions taxes. The NFL needs to have an account established at a business, hotel or restaurant to take advantage of the perk, the directive said.

CIB also won’t receive food-and-beverage tax money from concessions sold inside Lucas Oil Stadium and the Indiana Convention Center as it normally does. Instead, the National Football League will pocket that chunk of change.
 
The NFL, though, has agreed to reimburse CIB $4.1 million for labor costs associated with game events, helping to shave the projected shortfall to $810,000.

CIB’s overall 2012 operating budget is $113.4 million, including a reserve of $10.8 million.