2. 1
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.
Why Extend the Current Agreement?
3. 2
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.
Overview of the Extended Agreement
4. 3
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.
Overview of the Extended Agreement
5. 4
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.
Overview of the Extended Agreement
6. 5
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.
Overview of the Extended Agreement
7. 6
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.
Overview of the Extended Agreement
