Proposed taxing district for downtown MLS soccer stadium to run gauntlet of city votes

(IBJ photo)

Indianapolis Mayor Joe Hogsett’s effort to cement a taxing district framework to help pay for a Major League Soccer stadium downtown is set to run a gauntlet of public scrutiny over the next 10 days.

The plan depends on approval of a new professional sports development area (PSDA) by the City-County Council and the Metropolitan Development Commission. If approved, the financing plan could set up the city as a landing spot for an expansion franchise in American soccer’s top-tier league.

Hogsett’s PSDA proposal specifies more than 120 non-contiguous addresses throughout the downtown area. Taxes from the properties would provide a majority of the funding for a soccer stadium to be developed on land a couple of blocks east of Gainbridge Fieldhouse, including the Downtown Heliport.

The PSDA would collect state retail taxes, local and state income taxes, and food and beverage taxes to pay for the public portion of the stadium. Innkeepers taxes and admission taxes could also be collected within those boundaries. The owners of the MLS franchise would be required to cover at least 20% of the stadium development cost.

While the MDC earlier this month gave preliminary approval to  the taxing district, City-County Council’s Rules and Public Policy Committee will weigh the proposal at 5:30 p.m. Tuesday.

The proposal, which is sponsored by Council President Vop Osili, District 12, and co-sponsored by Ali Brown, District 10, and Ron Gibson, District 8, is the only item on the agenda for the committee meeting in the City-County Building’s Public Assembly Room. If the 11-member Rules and Public Policy Committee rejects the proposal, the measure will still receive a vote at the next full council meeting on June 3. It would include a caveat that it is recommended for denial.

There will be an open comment period during the meeting Tuesday evening to allow supporters and opponents of the PSDA proposal to address the matter directly with councilors. Several members of the Hogsett administration are expected to attend the meeting, both to present the resolution to council and to speak in favor of its approval.

Several people are also expected to speak in opposition to the proposal, including supporters of the Indy Eleven soccer franchise, the Brickyard Battalion.

A separate PSDA was approved in December for the team’s proposed stadium along the eastern bank of the White River on the site of the now-razed Diamond Chain Manufacturing Co. facility. That taxing district, approved by a 23-1 vote of the council, seemingly paved the way for the construction of a downtown soccer stadium for the Indy Eleven.

In fact, site work on the development is already underway by Indianapolis-based Keystone Group, whose owner, Ersal Ozdemir, also co-owns the Indy Eleven. Keystone envisioned a $1.5 billion mixed-use project called Eleven Park that would be anchored by the stadium but include a wide variety of commercial and residential developments as well.

On April 25, Ozdemir accused the city of backing out of negotiations related to financing the stadium and Eleven Park. Hogsett confirmed that the city indeed had halted negotiations, claiming in part that the numbers didn’t add up. Indy Eleven and Keystone representatives disagreed.

Hogsett also said the city had been working with an undisclosed group of investors who believed they could bring a Major League Soccer franchise to the city. In fact, Hogsett disclosed that he had just met face-to-face with MLS officials in New York and believed the time was right for Indianapolis to take its shot at the top rung of American professional soccer.

Keystone is also expected to have representatives in attendance at the council committee meeting on Tuesday, although it’s unclear whether they will speak publicly.

The mayor’s plan would essentially doom the Indy Eleven stadium project—and the team’s goal of eventually playing in the MLS—because the state has authorized approval of only one PSDA application.

Administration spokesperson Aliya Wishner also confirmed the city has no plans to submit the Eleven Park PSDA to the state, even if the new map fails to secure enough support from the council. The city is now in the process of trying to purchase the Diamond Chain site from Keystone, with Hogsett indicating he may want to turn the property into an park or other public amenity.

The property was home to a baseball park from 1914 to 1917 and the Diamond Chain Co. manufacturing complex from 1917 to 2023, but before that, it was the site of portions of at least four former cemeteries in the 1800s.

The company revealed late Wednesday that archaeologists have discovered 87 burials in the excavation of a six-acre portion of the site in what it is considering the first phase of construction of project.

Earlier Wednesday, Chief Deputy Mayor Dan Parker said in a letter that a one-acre site on the property that the city is using for the construction of the Henry Street Bridge may contain up to 650 remains.

If Hogsett’s PSDA is approved by the City-County Council, the Metropolitan Development Commission would hold a final vote on the proposal on June 5. If it rejects the proposal, that’s the end of the road. If it approves the proposal, it will be sent to the state budget committee for evaluation, as required by the state law authorizing the creation of a district. The deadline for submitting the PSDA to the state is June 30.

When the previous PSDA plan was approved by the City-County Council, the proposal first was heard by the Metropolitan and Economic Development Committee. This time around, Osili opted to move it to the Rules and Public Policy Committee, which he chairs. He said it was due to timing and notification requirements, although some council members have questioned whether the move actually stemmed from the contentious nature of the proposal.

Councilor Kristin Jones, a Democrat representing a large portion of downtown—including both PSDA sites— would typically be called on to sponsor such a measure, but said earlier this month that she wouldn’t back the new PSDA.

Osili said he made a last-minute decision to sponsor the measure in order for it to be introduced.

Gibson has told IBJ that he supports the new PSDA measure because of the funding gap cited by Hogsett administration officials for ending negotiations with the Indy Eleven and because of the former burial ground that exists below the Eleven Park site.