1 / 8

Capital Improvement Board Pacers Basketball, LLC & Bankers Life Fieldhouse Agreement

Capital Improvement Board Pacers Basketball, LLC & Bankers Life Fieldhouse Agreement April 14, 2014. Why Extend the Current Agreement?.

hall
Download Presentation

Capital Improvement Board Pacers Basketball, LLC & Bankers Life Fieldhouse Agreement

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Capital Improvement Board Pacers Basketball, LLC & Bankers Life Fieldhouse Agreement April 14, 2014

  2. Why Extend the Current Agreement? • The extension locks in the premier tenants of Bankers Life Fieldhouse (“the Fieldhouse”) - The Indiana Pacers and Fever - for up to 13 years; that term coincides with final debt service payments due on the Fieldhouse in 2027. • The extension also removes the ability of the teams to leave Indiana due to economic losses. • A study by Indiana University Public Policy Institute in September 2013 demonstrates the teams are critical to continued vibrancy of the downtown and its continued economic development. • Specifically, the Fieldhouse and the teams contribute at least $208 million in annual economic impact and support more than 2,000 jobs. 1

  3. Overview of the Extended Agreement • Term: The term is for 10 years (through the 2023/2024 basketball season) with three 1-year options through the end of the 2026-2027 basketball season. • Reimbursement of the Fieldhouse Facility Operating Expenses: • Pacers Basketball LLC will create a separate entity, Fieldhouse Management LLC (“the Manager”), that will manage and operate the Fieldhouse complex. The CIB will • assume and pay certain Fieldhouse operating expenses directly, including for off-site storage, general liability insurance, daily security, and utilities, at a total cost of approximately $3.7 million annually; and • provide an operating reimbursement payment to the Manager of approximately $7.1 million each year with a 3% escalator. • All such reimbursement revenues from the CIB to the Manager will be utilized for the explicit purpose of operating the building. • The Manager will provide quarterly revenue and expense information related to Fieldhouse operations at CIB meetings. 2

  4. Overview of the Extended Agreement • Other Fieldhouse Capital Improvements & Replacement Items: • During the term of the extended agreement, the CIB will provide $26.5 million in “refresh” dollars for capital improvements to the Fieldhouse outside of Major Systems. • At least $20 million of the $26.5 million must be spent on the listing of items in Schedule J.These would include, e.g., improvements to the locker rooms, concession stands, seating, painting, LED boards, etc. • Additional items from the remaining $6.5 million would be mutually agreed to during the term. • The CIB will provide approximately $7 million in capital replacement items for Major Systems that need to be replaced (including carpet). It is anticipated that $3 million of these expenses (all budgeted) will be completed in 2014. • All capital dollars are subject to public procurement laws and MBE/WBE/VBE participation recommendations. 3

  5. Overview of the Extended Agreement • The Scoreboard and Sound System: The scoreboard and sound system is considered a Major System under the Agreement. • The CIB will license the Fieldhouse scoreboard and sound system for 50% of the cost net of sales tax. These fees will be spread evenly across the term of the extended agreement. • The CIB will take title to the scoreboard and sound system at the end of the lease term. • Other provisions: • The previously agreed Market Square Arena advance amount and the operating loans under the bridge agreements will be amortized over the initial ten (10) year term of the extended agreement. • With limited exceptions, all home basketball games must be played in the Fieldhouse. 4

  6. Overview of the Extended Agreement • Termination Rights and Payments: Herb Simon • Under the current agreement there is no provision for a process upon Herb Simon’s death. Under the extended agreement, • We understand that Mr. Simon’s heirs will take control of the team per his will and trust agreements. • If, following Mr. Simon’s death, the Pacers’ lender calls their current loans or those loans otherwise mature, the Pacers must try (for at least 60 days) to obtain replacement non-recourse financing and, if necessary, ask the CIB for assistance in doing so. • The CIB will have approximately fifteen (15) months to help the Pacers obtain such financing. • If such financing is not obtained, and the Pacers decide to sell the team, the City is entitled to a Right of First Offer. 5

  7. Overview of the Extended Agreement • Termination Rights and Payments: Financial Losses • Under the current agreement the Pacers may terminate in the event of certain operating losses. • In that event, the CIB would be forced to subsidize these losses or trigger an early termination right where a complicated Termination Fee would be calculated based on the sales price of the team less many allowable deductions plus the last four operating loans that have not yet been amortized. • Under the extended agreement • The agreement cannot be terminated due to Net Cash Flow Losses and the CIB is not required to subsidize such losses. • The Pacers have agreed to specific performance, which means if the CIB honors the extended agreement, the teams will continue to play in the Fieldhouse. 6

  8. Questions from the Board Motions 7

More Related