A view of downtown Indianapolis and the new professional sports development area. Photo provided
A city commission on Wednesday gave the go-ahead for a new taxing district in Indianapolis driven by Mayor Joe Hogsett’s administration intended to help fund a proposed soccer stadium a couple of blocks east of Gainbridge Fieldhouse.
Members of the Indianapolis Metropolitan Development Commission voted 6-1 to create a new professional sports development area, or PSDA, which is a key financing component of Hogsett’s effort to lure Major League Soccer to the city.
The commission didn’t immediately reveal how individual members voted.
The approval follows months of discussion about the plan that calls for the closure and demolition of the Indianapolis Downtown Heliport and adjacent parking lots for the development of a soccer-specific stadium at 355 E. Pearl St.
Hogsett’s PSDA proposal specifies more than 110 non-contiguous addresses throughout the downtown area. Taxes from the properties would provide a majority of the funding for the stadium, to be developed on land east of Gainbridge Fieldhouse that includes 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.
The MDC’s vote was the final step in the local legislative approval process ahead of a July 1 state deadline. The commission had previously given preliminary approval, followed by a 16-8 vote in favor of the district by the City-County Council.
The confirmation of the taxing district now allows the Hogsett administration to request authorization from the State Budget Committee—a step required because the funding plan relies on up to $9.5 million per year in state taxes.
Hogsett said Wednesday he expects the committee and the State Budget Agency to consider the matter as soon as August, after the city formally submits the plan alongside a feasibility study for the site—and, potentially, identities of the investors involved in trying to win a top-tier soccer club for the city.
“When I flew to New York City to meet with Major League Soccer Commissioner Don Garber in April, he made clear the City’s role in securing an expansion club was creating the financing framework for a soccer-specific stadium on an appropriate site,” Hogsett said in a media release after the commission’s vote.
“Today, I was proud to see the Metropolitan Development Commission vote overwhelmingly to confirm a stadium development district at the Downtown Heliport, marking the final step in the local legislative process ahead of the July 1 deadline outlined by state law,” he said.
Dan Parker, chief deputy mayor, said the administration anticipates the feasibility study from Chicago-based Hunden Partners will indicate whether the city has sufficient revenue within the taxing district to cover debt on a stadium, although it is still unclear what the city has generally budgeted to construct the venue.
Approval of the PSDA comes six months after both the City-County Council and the commission approved a separate PSDA put forth by the city and Indianapolis-based developer Keystone Group.
That plan called for a $1.5 billion mixed-use project anchored by a soccer stadium to be called Eleven Park at the former Diamond Chain Manufacturing site on downtown’s southwest side. But the administration walked away from negotiations on that project earlier this year, alleging the project didn’t make financial sense.
The city pivoted to the heliport site amid continued concerns about the viability of developing Diamond Chain, which sits on a tract that was home to multiple burial grounds in the early days of Indianapolis.
The city said earlier this month that had the City-County Council or MDC voted down its new PSDA, it would not submit the formerly approved Eleven Park PSDA to the state for approval.
So far, little is known about the group that would be investing in an Indianapolis bid for an MLS club, as participants have refused to reveal themselves. But ahead of the vote, Hogsett said he expects those individuals will make themselves known before the city provides its request to the state.
He also said he is confident there will be a strong local component to the group—an element he said Major League Soccer executives have said is key to a successful bid. And while he did not answer directly whether Indiana Pacers owner Herb Simon is involved, Hogsett indicated he would support Simon as an investor.
IBJ reported in May that a company affiliated with the Simon family, owners of Pacers Sports & Entertainment, had paid $10.5 million to acquire a 5.2-acre surface lot at 101 S. Alabama St.—which sits west of the Indianapolis Downtown Heliport and east of the Virginia Avenue parking garage.
A representative for the Simon family told IBJ at the time that the family’s interest in the lot “predated soccer” and that the acquisition was entirely separate from the city’s plans.
The investor group is being organized by Charlotte-based soccer executive Tom Glick, who has experience working for numerous domestic and international teams, including New York City FC and Charlotte FC.
Dan Parker told reporters Wednesday that while the city doesn’t know specific identities, Glick has shared that minority investors in other MLS clubs and at least two European soccer teams have expressed interest in joining the Indianapolis group.
It will be up to the investor group to submit an application for an expansion club to Major League Soccer, a move that is expected to come later this year.
Hogsett and his lieutenants have emphasized that the city would not build a stadium until Major League Soccer officially awards the ownership group an expansion club.
The council, and to a lesser extent the Metropolitan Development Commission, will also have extensive oversight on the stadium development process, including the issuance of debt to pay for the facility and its design. The bodies would also have oversight for any purchase of land by the city that might be used for the project.
The Department of Metropolitan Development has a memorandum of understanding with the Indianapolis Airport Authority that creates a path for the city to acquire the heliport property, at fair market value.
By Mickey Shuey, Indianapolis Business Journal
