Do IMS Events really add $510 Million Annually Into Indiana Economy? UPDATE
Indiana Gov. Mike Pence is thinking out loud, at least, like a true fiscal conservative in questioning a legislative plan to give up to $100 million in state tax dollars to the privately-owned Indianapolis Motor Speedway to make improvements to the track and related facilities. State Sen. Mike Young sprung the legislation in the Senate near the end of action for bills in the first house, leaving virtually no opportunity for public debate, before the Senate rammed the legislation through on a bipartisan, 37-12 vote. The IMS doled out more than $100,000 in campaign contributions in the lead-up to the introduction of the unprecedented public subsidy as the IMS moved to add "rent-a-civic" leaders like Mark Miles to its management team. WTHR has more on Pence's comments:
|Author says IMS moved to add "rent-a-civic" leaders like Mark Miles to its management team|
The state's top political leader is voicing concerns about a plan to offer financial help to the Indianapolis Motor Speedway.
Governor Mike Pence told reporters Wednesday that he has reservations about the way IMS bill is crafted. Pence is concerned that it provides little private investment opportunity.
The state Senate approved the $100 million plan in a 37-12 vote last month. The Speedway already spends $5 to $15 million annually on maintenance and is facing competitive pressure from newer facilities.
Hulman & Co. CEO Mark Miles and IMS President and CEO Jeff Belskus went to the Statehouse to ask for financial help in February.
With $100 million in bonds, the Speedway will add lights to allow night racing at the historic track. It will also renovate the stands, upgrade facilities and install high-tech video boards.
Lighting the track, as well as grandstands and parking lots, could cost as much as $20 million. Building renovations and track upgrades could cost as much as $30 million. Another $10 million would be spent to make the Speedway compliant with the Americans with Disabilities Act.
The money would be essentially taken out as a lump sum loan and paid back over 20 years. A special taxing zone at IMS would provide $5 million a year. Another $2 million annually would be paid by the Speedway.
Let's be clear. There is nothing in the legislation that requires the IMS to contribute $2 million annually; any contribution the IMS makes to these improvements are at its discretion. The only recourse bondholders have for repayment of the bonds issued under the legislation is to capture up to $5 million a year in taxes the IMS pays to the state. If the state revenue contribution is inadequate to cover repayment of the bonds, the bondholders have no recourse against the IMS because the proposed state law bars them from protecting their interest with any lien or mortgage on the IMS.
During a House Ways & Means Committee hearing this morning on the give-away, the IMS' Mark Miles told lawmakers the Hulman-George family has no plans to sell the IMS. “There is absolutely no intention to sell it,” he said. “We're not doing things to get it ready to sell. The family fully expects to keep this business their business.” Yeah, as if he's going to admit their true intentions out loud to lawmakers. I wonder if Miles carefully parsed those words so that a new owner that included Tony George as a successor owner would make his statement true.
IMS officials are once again touting an economic development study it had prepared, which claims the IMS contributed $510 million to the local economy annually and generates 6,200 jobs. The IMS and IndyCar series actually have a relatively small number of full-time employees. As everyone familiar with IMS events knows, the IMS relies heavily on volunteers from not-for-profit groups to provide concession and parking staff on race day. Nonetheless, it claims the IMS and related sports businesses generate annual compensation to employees of over $235 million. It claims 200,000 out-of-state visitors spend $145 million combined at the IMS' three annual races. AdvanceIndiana.com03/21/13 Events and operations at the Indianapolis Motor Speedway and associated motorsports businesses generate more than $510 million annually to the Indiana economy, according to a study by the Indiana University Public Policy Institute.
"This study shows how the Indianapolis Motor Speedway and its associated industries form a powerful engine that helps to drive the Indiana economy," said Mark D. Miles, chief executive officer of Hulman & Company, the parent company of the Indianapolis Motor Speedway and INDYCAR. "The Super Bowl brought a tremendous economic impact to Indianapolis and Indiana in 2012, and this state is very fortunate that IMS, its events and associated industries deliver an even greater economic contribution every single year."
The study addressed the direct and indirect economic contributions made by IMS through its operations, spending by out-of-state visitors to the Indianapolis 500, Kroger Super Weekend at the Brickyard and Red Bull Indianapolis GP annual events, and the presence of nearly all INDYCAR race teams and the Dallara facility in the Indianapolis area, which are attracted to Indiana due to the presence of the Speedway.
Notable statistics from the extensive study, which used data from 2010 through 2012:
•An annual infusion of $510 million to the Indiana economy
•Approximately 6,200 direct and indirect jobs in Indiana created by IMS events and operations, Indiana-based INDYCAR teams and the Dallara facility
•More than $235 million in annual employee compensation at IMS and associated motorsports businesses
•Jobs attributable to IMS comprise nearly 20 percent of all employment at racing industries within Indiana
•Direct spending by IMS and associated motorsports businesses in 65 of 92 Indiana counties
•Approximately 200,000 out-of-state visitors spent more than $145 million combined at the three IMS events in 2012. Visitors to IMS came from all 50 states and more than 50 countries.
"The Indianapolis Motor Speedway continues to play a major economic role throughout Indiana, providing thousands of good jobs for Hoosiers," said Jeff Belskus, president and chief executive officer of the Indianapolis Motor Speedway. "The success of IMS and the growth of the motorsports business go hand-in-hand and combine to provide a potent economic force in our state."
Delivering unbiased research and data-driven, expert analysis, the IU Public Policy Institute is a collaborative research arm within the Indiana University School of Public and Environmental Affairs. The Institute also supports the Indiana Advisory Commission on Intergovernmental Relations (IACIR).
"While racing is a sport that generates an annual Super Bowl of visitors, the analysis proves that it is also a high-tech, advanced manufacturing industry including not just drivers, but engineers, parts manufacturers and a wide range of firms that support the local economy," said John Krauss, director, IU Public Policy Institute.
Note: The complete study on annual IMS economic contributions by the Indiana University Public Policy Institute can be read at www.ims.com/report.