Out of Control Policy Blog

Indianapolis Seeking Proposals for Convention Center, Sports Stadium Management

Mary Beth Schneider and Bill Ruthhart at the Indianapolis Star report today that Indy Mayor Greg Ballard's administration has issued a Request for Information and Qualifications to gauge potential private sector interest in operating and managing the city's convention center and major sports stadia, which currently face large operating deficits:

Indianapolis is investigating hiring a private firm to handle the financial headache of operating Lucas Oil Stadium and the Indiana Convention Center, and potentially Conseco Fieldhouse.

The city has issued a "request for information and qualifications," shopping for a firm that thinks it can run the facilities cheaper and better than the Capital Improvement Board.

Paul Okeson, chief of staff to Mayor Greg Ballard, said the city doesn't know whether it will, in the end, privatize the management of the facilities. But, he said, there's only one way to find out: Ask.

"We issued the RFI for the sincere and honest purpose of maybe there's something out there we're not thinking of that someone could present to us that would save us a significant amount of money in operating these facilities."

The result, he said, could be private management of the facilities; private-management assistance to continued CIB management; or no change at all.

"It could be anything," he said. "We're obligated on behalf of the taxpayer to see if there's a way to do this and create some efficiencies or gain a significant amount of savings." [...]

Ballard and the CIB went to the General Assembly for help earlier this year when it projected a $47 million deficit for 2010.

The RFI is posted on the city's website here, and more details on the initiative are available in this Indianapolis Business Journal article.

As I told the Star, it's a smart move in a fiscal crunch for policymakers to look at innovative ways to get government out of the business of operating and managing non-core assets (especially when they're not even breaking even while doing it):

The city's request comes at a time when cities have increasingly turned to private firms to operate their large convention centers, arenas and stadiums.

"I'm hearing a lot more about this issue now," said Leonard Gilroy, who as director of government reform at Los Angeles-based Reason Foundation produces an annual report on privatization.

"There's been a renewal, a reinvigoration of privatizing these kinds of facilities because of the obvious fiscal crises going on at the state and local level throughout the country." [...]

Privatizing facilities like Lucas Oil and the convention center certainly isn't a new concept. But what is unusual about Indianapolis' request is that it includes multiple facilities.

"I have not seen the bundling of facilities like this request, but it is very smart because it adds value," said Gilroy, the privatization expert. "Blending them together like this creates more bang for the buck, because there are more savings, economies of scale and cost efficiencies an operator can find."

For more on other recent Indianapolis competition initiatives, see my earlier posts here and here. Mayor Ballard and his administration deserve recognition for really thinking outside the box and driving fundamental reforms in a variety of ways, both on the privatization front and on the larger front of revamping antiquated government systems and business processes. The end result is the same—delivering more efficient and streamlined government services to taxpayers.

» Reason Foundation's Annual Privatization Report 2009
» Reason Foundation's Privatization Research and Commentary

Leonard Gilroy is Director of Government Reform


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