State slots $89M for 5,000-seat arena at IU Indy

Amid the ongoing restructuring of IUPUI—both its leadership and its future as a campus solely within the Indiana University system—state and local officials are in the early stages of a project that could have big implications for downtown: an on-campus arena.

State lawmakers in April approved $89.5 million to design and build the midsize sports facility as part of the biennial budget. But that funding, insiders told IBJ, was not the result of lobbying by Indiana University.

Instead, Mayor Joe Hogsett’s administration, a Pacers Sports & Entertainment executive, the Indiana Sports Corp. and other high-profile organizations pushed for the arena—with the goal of bringing more NCAA championships, esports competitions and other activities to the city.

The proposed 5,000-seat venue would, indeed, be home to the indoor athletic programs for what will soon be IU Indianapolis. But its planned uses go well beyond that. In fact, the funding includes a stipulation that at least one other long-term tenant sign a lease on the building before construction gets underway.

And while plans are far from finalized, it’s expected the venue would operate much like the IU Natatorium, which is not only home to IUPUI’s swimming and diving teams but also hosts national and world championships and Olympic trials. In that case, the city owns the property, but the building is managed by IUPUI’s facilities team.

The arena is expected to sit on a portion of a 7-acre green space at the northwest corner of Blackford and Wabash streets, between the Herron School of Art and Design, the NCAA and National Federation of State High School Associations headquarters complex, and Military Park.

A portion of the site was home to the Indianapolis Tennis Center, a 10,000-seat venue that was demolished in 2010 following years of declining use. Even at that time, there were considerations for a new multi-purpose athletic venue that could accommodate basketball, volleyball and other sports, as well as university events.

IUPUI officials declined requests for comment about the arena, deferring questions to the Indiana Sports Corp.

“This is about building a community asset—a venue that will continue to enhance the [school’s] athletic program and … is great for the city’s sport strategy overall,” said Patrick Talty, president of the Indiana Sports Corp.

Talty said he hopes the project is completed in time to host practices for the NCAA Men’s Basketball Final Four in 2026. But he confirmed the city isn’t relying on the arena to accommodate teams.

The soonest construction could start is the middle of next year.

‘Not just for IUPUI’

The project was green-lit during the 2021 budget session at a cost of $77 million, following lobbying efforts from Hogsett, Indiana Pacers Vice Chairman Jim Morris, the Indiana Sports Corp., the NCAA and others, said Sen. Ryan Mishler, R-Bremen, who heads the Senate Appropriations Committee.

IUPUI officials weren’t directly involved in those conversations, but observers say Tom Morrison—the school’s vice president of capital planning and facilities—was engaged throughout the process.

The development was delayed due to problems securing a lease with a permanent tenant, Mishler said. In April, the Legislature reauthorized the project in the state’s 2024-2025 budget—to be paid for in cash, not through bonding.

That’s not typically how athletic facilities are funded in Indiana. Typically, lawmakers require universities to raise money to pay for non-classroom projects, especially sports facilities.

But Mishler said he views the arena as an economic development tool that could allow Indianapolis to expand its event tourism offerings while also helping jump-start the IU Indianapolis athletics program.

“IUPUI didn’t come and ask for it,” he said. Other advocates “felt like that [site] would be the best place for it.”

Luke Kenley, a Republican who retired from the Legislature in 2017, said that while the move is unusual, it’s in some ways parallel to when the Legislature provided money for the split of the Indiana-Purdue Fort Wayne campus in 2018.

The state at that time funded construction of multiple buildings for each university. But Kenley said the state is unlikely to approve such funding often.

“I would not expect to see this as a prototype for a recurring budget request” from other schools, he said. “I think it’s an unusual situation.”

Open to other users

The idea of a new arena for IUPUI has been floated since the school joined the NCAA’s Division I in 2000. The men’s basketball team at the time played in a 1,215-seat facility on the main floor of the Natatorium called The Jungle. Ron Hunter, men’s basketball head coach then, heavily advocated for the team to have a larger venue to help it raise its profile, but neither the school nor the state ever made money available for the project.

Then in 2019, a study focused on IUPUI’s role in the city’s evolving sports strategy determined a 3,000- to 5,000-seat venue could result in $8.5 million to $23 million in economic impact for the city every year. That sparked renewed interest in the project.

Still, Mishler said the project won’t go forward unless a non-IU organization contracts to use the space. Observers say that could be a team, a sports association or another type of organization.

“That’s one reason it didn’t happen [after the last budget session], because there was never a contractual agreement,” Mishler said. “Then there were the cost overruns. But the same will hold true this time—we won’t do it if there’s no agreement with one of these tenants.”

The senator said Indiana Sports Corp. is in conversations with at least two prospective users, neither of which has offices in Indiana. But he said there’s no deal yet.

Mishler wouldn’t share what organizations have considered the space, but he said neither the Indy Fuel nor the Fort Wayne Mad Ants franchises—which are getting new facilities in Fishers and Noblesville, respectively—were part of the conversations in 2019 or now.

Talty also declined to disclose the identities of the groups with whom Indiana Sports Corp. has had conversations, but he said the Sports Corp. is continuing to work hard to find potential users.

“Obviously, we’d love to have some folks make some commitments to the facility in order to keep moving forward,” he said.

A fresh start?

Mishler said while IUPUI “wasn’t the reason” for building the arena, the university certainly stands to benefit, especially in helping IU Indianapolis build its profile.

Sports business experts told IBJ they think a new arena could help with marketing IU Indianapolis sports but won’t be enough to elevate the profile of teams on its own. It could help the school attract athletes, though.

“Just [constructing] a building will not … take them to the next level, because it’s purely based on finances,” said Al Kidd, president and CEO of the Sports Events and Tourism Association. “There’s certainly interest at the university to grow and upgrade their athletic teams, so this becomes a significantly competitive situation for recruiting.”

Since 2014, the IUPUI men’s basketball team has played its home games at the 6,800-seat Indiana Farmers Coliseum at the Indiana State Fairgrounds. The move from campus followed a 22-month, $53 million renovation of the facility and coincided with Indy Fuel’s move to the same venue.

But IUPUI has had limited success in filling seats at the Coliseum. In 112 games at the facility, it has drawn an average attendance of just under 1,050. Its peak came in the program’s first year there, when it drew 1,527 fans per game.

Struggles on the court are similar. The team hasn’t had a winning record since the 2010-2011 season, when it went 19-10. That was the end of nearly 10 years without a losing record.

The women’s basketball team and the volleyball team—both of which play home games at The Jungle—would also use the new arena.

Kidd said he’s confident that plenty of uses can be found for the venue outside of campus athletic programs. He said the NCAA is constantly looking for smaller facilities to host Division II and Division III championships, and with the venue just steps from its front door, the arena would likely be a top contender.

“There’s a really strong chance that the more facilities there are in Indianapolis, the better chance there is to be the place for these events. The city will be able to be more aggressive on different types of events,” he said. “But that’s going to really hinge on the relationship that they have with the university and how willing it is to lease the space out. [IU] can make some pretty good money if that happens.”

Already, the Indiana Sports Corp. partners with IUPUI and the Horizon League to host multiple events in Indianapolis every year, including the Horizon League men’s and women’s basketball championships. They also partner on major events like the NCAA men’s and women’s basketball tournament and other championships.

Talty, with the Indiana Sports Corp., said he expects the relationship will only grow stronger with the construction of a new arena.

“As we think about the next 25 years for the city’s sport strategy, sports education and sports leadership [are] very important, and we have a great urban university right here in Indianapolis,” he said. “And it’s important that that continues to grow—and grow in prominence. One of those ways that happens is through [collegiate] athletics.”•