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Pacers, Indianapolis Officials Ink Deal For Arena Overhaul

Pacers stadium rendering

The final phase of the project, which will include the outdoor plaza, is expected to be completed in 2022. (Courtesy Pacers Sports And Entertainment)

The Indiana Pacers will stay in Indianapolis for 25 more years in a deal approved Friday that includes $295 million in public subsidies for a renovation and expansion of Bankers Lief Fieldhouse, the NBA team's downtown arena.

The Marion County Capital Improvement Board's vote in favor of the agreement comes as state legislators are negotiating a plan diverting state and local income and sales tax revenue generated by several downtown hotels toward the arena project.

The deal calls for the Pacers to provide $65 million toward the renovations, which will feature construction of a year-round outdoor plaza in place of an existing parking garage next to the arena and interior updates. It commits the board to spending up to $120 million on technology upgrades at the fieldhouse, which opened in 1999.

Herbert Simon, the team's 84-year-old owner, has said he wants to keep the Pacers in Indiana and has designated his son, Steve Simon, to eventually take over the franchise that has been in the family since 1983.

"The Simon family has always desired for the Pacers to stay in Indiana for the long term," Herbert Simon said in a statement. "The new agreement ensures that the Pacers will be here and that the fieldhouse will continue to be the best facility for generations of fans and guests."

Plans are for the outdoor plaza to host concerts and other public events, along with a public ice skating rink in the winter and a public basketball court in the summer.

"It becomes a year-round entertainment opportunity," said Rick Fuson, the team's president and chief operating officer.

Construction is expected to begin next year after the Pacers season ends, but work will be suspended ahead of the team hosting the NBA All-Star Game in February 2021. The final phase of the project, which will include the outdoor plaza, is expected to be completed in 2022. The WNBA's Indiana Fever will have to play home games elsewhere for the 2020, 2021 and 2022 seasons.

A long-term agreement with the Pacers has been a condition of the state Legislature's bill making the subsidies available for the arena project. No new taxes will be imposed, but the tax revenue related to the hotels will be diverted from the state, city and local schools.

Under the new deal, the Capital Improvement Board will continue paying toward the arena's operating costs, growing from the current $12.5 million a year to about $16 million in the later years before the agreement expires in 2044. That would amount to about $362 million over the deal's lifespan.

The Legislature is also poised to extend the city's admissions, auto-rental and hotel taxes through 2040 that generate about $77 million a year for the board, which also oversees Lucas Oil Stadium, the Indiana Convention Center and the Victory Field minor league baseball stadium.

Board President Melina Kennedy said the deal with the Pacers will enhance an arena used for events throughout the year.

"It's really important that we have a world-class facility that continues to attract fans," Kennedy said.

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