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Pacers Could Owe Indianapolis Up To $150M If They Leave City
Published April 20, 2010
|Pacers Must Be Sold In
Order To Break Lease
The Pacers could face "serious financial hardship" if they elect to move from Conseco Fieldhouse to another city, according to Anthony Schoettle of the INDIANAPOLIS BUSINESS JOURNAL. The Pacers are asking Indianapolis for more than $15M annually to operate the arena, and have threatened to move if the city does not agree to renegotiate terms of the Conseco Fieldhouse lease. The team "began asking for the money almost two years ago, but city officials -- dealing with their own fiscal crisis -- have been slow to comply." Sources indicated that Indianapolis Mayor Greg Ballard "seeks more control of Conseco Fieldhouse operations, and is resisting merely writing a check to the Pacers and letting the team continue to manage the facility on its own." Schoettle notes the lease for the city-owned arena stipulates that the Pacers "would have to pay at least" $50M to Indianapolis if it vacates Conseco. But local attorney Paul Ogden, who has "written about the subject extensively," believes that the franchise could owe more than $150M "if it decides to break the lease before it expires" in '19. Ogden noted that terms of the lease stipulate that the Pacers "must sell the team to break the lease, and the penalty to break that lease is tied to the sale price." He said that the lease stipulates that "an 'application termination percentage' will be multiplied by the net sale proceeds to come up with the biggest chunk of the penalty." Paul Okeson, who is handling Indianapolis' negotiations as a member of the city's Capital Improvement Board, said, "When you peel it all back, the penalty isn’t as substantial as you might think." But Ogden "disputes that," and Ballard's administration concedes that the "penalty will be in the 'tens of millions of dollars' range" (INDIANAPOLIS BUSINESS JOURNAL, 4/19 issue).