$633M still owed on Lucas Oil Stadium; pandemic has hurt its revenues
INDIANAPOLIS (WISH) — When Lucas Oil Stadium opened to the public in August 2008, taxpayers were told it would be paid for with a combination of user taxes from food and beverages, hotels and rental cars and with cigarette taxes — along with an income tax increase.
Last year, revenue collections were way off, though, due to the coronavirus pandemic. The stadium is hosting the NCAA men’s basketball Final Four games Saturday and Monday.
After close to 13 years, $633 million is still owed on Lucas Oil Stadium, meaning that, after 13 years, less than $100 million of the original construction cost has been paid. The building will be 30 years old when it’s scheduled to be paid off in 2037.
Matt Will, is an associate professor of finance and the director of external relations for the School of Business at the University of Indianapolis. He explained to News 8 how the financing for Lucas Oil Stadium works.
“The current stadium is financed with a 1% tax on nine of the 10 doughnut counties, and Marion County has an additional 1% on top of the 1% that still exists from the RCA/Hoosier Dome,” Will said.
The RCA Dome was demolished on Dec. 20, 2008. The arena was not paid off fully until 12 years later.
Andy Mallon is executive director of the Marion County Capital Improvement Board, which operates Lucas Oil Stadium and other major downtown sports venues. Sports, conventions and concerts are the primary drivers of revenue for those buildings, and the COVID-19 pandemic continues to threaten events at those facilities.
“So, our revenue last year fell about $41 million short of our costs and obligations, so that was our losses were last year and it is difficult to predict what they would be this year,” Mallon said.
A clause in Indianapolis Colts lease agreement with the city for use of Lucas Oil Stadium states if the team is not one of the top five most valuable teams in the league by 2030, it can opt out of the lease.
UIndy’s Will said, “I can tell you that, right now, the latest Forbes research shows the Colts are the 20th most valuable team in the NFL, so the chance of them getting into the top five by the end of the decade is very slim. So, my forecast is the Colts will probably use that as leverage to renegotiate a deal with the city.”
Will the Colts ask for a new building or a better deal? That remains to be seen.
The Capital Improvement Board says Lucas Oil Stadium is here for the long run, but, to put this into perspective, Market Square Arena lasted 25 years and the RCA Dome, 24 years.