Rokita: City should have submitted plan for first soccer district to state

Keystone Group officials say they have committed $26 million so far to develop a stadium district at the former Diamond Chain Manufacturing site. The work included razing the former factory complex. (IBJ photo/Mickey Shuey)

Indiana Attorney General Todd Rokita told a state lawmaker late last week that he believes the Hogsett administration is circumventing part of the state law it hopes to use in the development of a new downtown stadium.

Indianapolis Mayor Joe Hogsett and administration officials on Monday night are set to present a plan for a new professional sports development area, or PSDA, to the City-County Council. That taxing district, if approved, would allow the city to direct certain local and state taxes toward debt on the construction of a new venue for a Major League Soccer club.

But, in a confidential Friday memo to Sen. Justin Busch, R-Fort Wayne, obtained by IBJ, Rokita said the city is incorrect in its reading of the 2019 legislation that allows for state tax contributions to a soccer venue.

Specifically, he believes the city should have already submitted a separate PSDA map that was approved in December for the Eleven Park project—a development the city has said it walked away from after determining the risk to taxpayers was too high.

The correspondence from Rokita is not an official opinion issued by the attorney general’s office, meaning it does not carry direct legal weight.

The new PSDA is intended to replace the one touted by Indy Eleven soccer team majority owner Ersal Ozdemir, who has been staunchly opposed to the city’s plan because it would essentially ruin his plans for the $1.5 billion stadium district along the White River, at the former site of the Diamond Chain Manufacturing Co.

Hogsett wants to submit a different site—generally around the Indianapolis Downtown Heliport—to the State Budget Committee for consideration, which would allow the city to avoid the Eleven Park location altogether. Administration officials have said repeatedly that regardless of whether the second PSDA map is given the green light by the City-County Council and the city’s Metropolitan Development Commission, it will not send the Eleven Park map to the state.

Rokita said he believes the Eleven Park taxing district should still be considered by the state, and that the State Budget Committee can do so now, without city prompting, because that PSDA had already completed its local legislative processes. He said the legislation doesn’t require direct action by the city for the budget committee to consider the proposal—only for the city’s legislative processes to be finished.

“Reading the PSDA and economic development statutes collectively, it becomes clear that the intent of the legislature was that the city would adopt one resolution to establish a PSDA and that such resolution would be submitted to the state for review and approval,” said Rokita in his memorandum of legal guidance in response to Busch’s inquiry on the topic. “There is no indication in the Indiana Code that such submission requires an affirmative or active step on the part of the city, so the state can likely take notice of [the first PSDA’s] adoption and commence review.”

He also said because of specific language in the bill, the city is technically required to have an approved map considered by the State Budget Committee—even if it’s the Eleven Park site. While the new PSDA map is generally expected to pass Monday night’s council vote, if it did not, Rokita’s reading of the legislation could, at least theoretically, keep the Eleven Park proposal on life support even though the city has indicated it is done negotiating the matter with Ozdemir.

“The Attorney General does not have jurisdiction or enforcement authority under the law for creating a new professional sports development area and has merely offered an advisory opinion to a Fort Wayne legislator,” said Aliya Wishner, director of communications for the Hogsett administration, in an emailed statement. “The City disagrees with that opinion and it has no bearing on the important effort to bring Major League Soccer to Indianapolis through passage of Proposal 175 tonight.”

Neither Council President Vop Osili or a spokesperson for the City-County Council immediately returned a message requesting comment.

The Indiana General Assembly passed legislation allowing for the creation of a second Indianapolis PSDA—the first was authorized in 1999—following years of pressure from Ozdemir, with language that allows for state tax contributions of up to $9.5 million per year toward debt service on a soccer stadium, as long as 20% of the overall cost is contributed by private parties, such as a developer or owner. A 2021 amendment requires the city to secure local legislative approvals by June 30.

“Likely, the passage of two resolutions for the same end result was not contemplated by the legislature and is therefore beyond the province of the statutes in question,” Rokita’s memo said. “It appears that the city is attempting to manipulate [the legislation] to its own aims, rather than the true intention and spirit of the law.”

He said that the first PSDA’s passage should have resulted in it being submitted to the State Budget Committee, as prescribed by the law. But the city did not do so before introducing the MLS concept to the public in April.

While administration officials told IBJ the delay was ultimately fortuitous—in that it gives Hogsett an opportunity to submit the alternative site—it largely stemmed from the lack of a completed feasibility study for the site. That study has since been canceled, according to the city, which has repeatedly declined to share a preliminary copy of the findings with IBJ.

In response to an inquiry from IBJ, a spokesperson for the attorney general’s office said Rokita has “not issued an official opinion on this issue. Any communications between, or guidance to, our clients would be confidential.”

Indianapolis Business Journal reporter Taylor Wooten contributed to this story.

This story will be updated.