Andrea Neal is a middle school teacher and adjunct scholar with the Indiana Policy Review Foundation. Contact her at aneal@inpolicy.org.
INDIANAPOLIS, IN -- If you want to know what's happening to tax dollars in Marion County, you may have to file a lawsuit. That's what citizens have had to do in the case of the sale of Pan Am Plaza, a prime piece of Downtown real estate for which taxpayers should have received $6 million.
The operative word is "should." For reasons that are not very clear -- but should be exposed over the course of the litigation -- the powers that be decided that the Indiana Sports Corp. need not honor a 1985 agreement that required it to maintain an 88,000-square-foot plaza as public space or else pay the city $3 million plus inflation for it.
The plaza was part of a block of real estate along Capitol Avenue bought by Indianapolis, then given for investment purposes to the Sports Corp., a nonprofit organization set up by city fathers to attract national and international amateur sporting events. This was one of our earliest public-private partnerships.
Late last year, the Sports Corp. asked the Metropolitan Development Commission to rescind the taxpayer buyout language, which it did on a batch vote with no public input. In April, the Sports Corp. sold the plaza, which includes two ice rinks used by the public, for a reported $3.8 million to private developer KRG/CP. The Sports Corp. pocketed the money. Taxpayers, who ironically are still paying debt service on the land, got nothing.
The transaction is disturbing on so many levels it's hard to know where to begin. For starters, there's the question of accountability. No elected official or elected body played any official role in the decision to rescind the taxpayer-protection language. The idea originated with the Sports Corp., which had an obvious self-interest in keeping the money.
The Metropolitan Development Commission, whose members are appointed by the mayor, City-County Council and county commissioners, approved the resolution on Dec. 19 in a group of routine resolutions on a voice vote. The resolution made no mention of the fact that it would cost taxpayers millions.
The timing is problematic. The vote took place a week before Christmas during the transition time between outgoing Mayor Bart Peterson and incoming Mayor Greg Ballard, who ousted Peterson in part thanks to property tax ire. Why wouldn't something this important to taxpayers have been put on hold for the new mayor's review?
Susan Williams, president of the Sports Corp., said she is certain the Ballard team was briefed on the matter. "I asked for assurance from the Peterson administration that this had been done. I didn't do it personally. But I was assured that that happened."
If Ballard were briefed on the issue, as Williams was told, it's strange that he didn't stand up for taxpayers, especially after campaigning on a pledge for open, transparent government. But Ballard hasn't been open about this topic. "We are not going to comment while there is a pending lawsuit," said his spokesman Marcus Barlow. No comment on a lawsuit that seeks to reimburse taxpayers $6 million? It seems that money could help cover the city's projected $26 million operating deficit.
This is not an argument for letting the Sports Corp. go out of business. Since its founding in 1979, it's done great things for this city, including luring the Pan Am Games in 1987, the 2001 World Police & Fire Games and Men's and Women's NCAA Final Fours, to name just a few. But it's also made poor financial decisions; the fact it had to sell off all its real estate to raise money is evidence of that.
"We need to have more public scrutiny of these public-private partnerships," said Paul Ogden, the lawyer who filed the lawsuit on behalf of citizens Clarke Kahlo and Howard Elder.
Such scrutiny should be automatic when taxpayer money is involved. In its 2006 tax returns, the most recent available, the organization reported $4.8 million in revenues, $429,488 of which came directly from taxpayers and $1.25 million from "program service revenue" including government fees and contracts. Yes, taxpayers deserve to know about its operations and business deals -- and we shouldn't have to go to court to find out.
