City seeks ideas to privatize stadium, convention center operations

The city of Indianapolis is considering ways to get out of the professional sports stadium and convention center management
business.

This afternoon, the city’s Office of Enterprise Development released a Request for Information
and Qualifications in conjunction with the Capital Improvement Board, soliciting proposals for private-sector operation and
management of Lucas Oil Stadium and the Indiana Convention Center.

The CIB, which manages the
city’s professional sports facilities and the convention center, has struggled much of the past year to close a projected
$47 million deficit for 2010.  Last week, it said its financial situation has been improving, but still needs much work.

According to the RFI, Indianapolis hopes to identify efficiencies and cost savings for each facility; build relationships
with strategic partners; maximize their usage; evaluate potential economies of scale; and enter into a multi-year agreement
with one or more respondents for their operation.

The city’s deadline for responses is Tuesday, Nov. 24,
at 4 p.m. After that, it anticipates issuing a formal request for proposals on Dec. 7, with an anticipated due date a month
later.

The RFI requires respondents to provide specifics about how their proposals to operate the three venues
would affect major city events, such as Indianapolis Colts games, national swimming competitions, the Circle City Classic,
events sponsored by Indiana Black Expo, NCAA events, events of the Indiana High School Athletic Association and various marching
band events.

It also notes that any respondent will be required to coordinate its plans with the Indianapolis Convention
and Visitors Association in order to attract and retain significant public events and ensure the facilities are utilized at
their full capacities.

The RFI does not formally seek proposals for management of Conseco Fieldhouse, noting that
stadium “is subject to an operating agreement that does not expire in the near term.”

But it leaves
the door open for privatizing Conseco Fieldhouse’s management, if the Indiana Pacers consent. The RFI continues: “The
City believes there is every possibility that the current operator of Conseco Fieldhouse will cooperate in identifying opportunities
to achieve efficiencies, enhance performance and create benefits for the well being of the larger community.”

Whatever proposals the city receives, the RFI is careful to note that it cannot interfere with or jeopardize the tax-exempt
status of bonds issued to underwrite construction of the three facilities.

Unless they’re retired early,
the Indiana Convention Center’s bonds reach maturity in June 2021; Conseco Fieldhouse’s reach maturity in 2027;
and bonds for Lucas Oil Stadium and the convention center’s expansion reach maturity in 2041.

The RFI refers
all questions to Michael Huber, Mayor Greg Ballard’s director of enterprise development. Neither Ballard nor Huber were
immediately available for comment.

CIB Chairman Robert Grand said he had no comment on the RFI and also referred
questions to the mayor’s office.

Last week, CIB Treasurer Ann Lathrop said at the group’s regular meeting
that the group may not need the first installment of a $27 million state loan intended to bail it out of its financial difficulties.
Lathrop said the CIB’s financial situation might be improving enough that it may forego the $9 million installment in
2009, which would save the CIB from paying interest charges of 5.25 percent.

State legislators this summer authorized
the CIB to receive $27 million—$9 million in annual loans the state would provide for three years—to help close
the CIB’s budget shortfall.

The CIB will decide at its December meeting whether to accept the loan. Even
if it turns down the first installment, it still could choose to accept the remaining funds earmarked for 2010 and 2011.

At the meeting, Grand cautioned that although the group’s finances are much improved, more work remains.

“We do know we’re healthier than we were a year ago,” he said. “But the point of the matter
is, this is an ongoing issue.”