Bloomington’s initial convention center pitch: County transfers property, city pays debt, gets hotel tax

The initial potential term sheet that has been floated by the city of Bloomington for the acquisition of the Monroe County convention center is now public.

The key points of the proposal include the transfer of the convention center at 3rd Street and College Avenue to the city of Bloomington—as well as other property that has been purchased by the county government with proceeds from the innkeeper’s tax.

The city wants to acquire the convention center, in order to purse an expansion of the facility independent of the county, because the joint venture between the two governments was stalled even before the COVID-19 pandemic hit.

Under the terms, the county would also have to support an annual transfer from the county to Bloomington, or its property manager, the proceeds from the county’s 5-percent innkeeper’s tax. The tax is overseen by a five-member convention and visitors commission, which is appointed by county government. It’s the innkeeper’s tax that is used by the county to make the payments on the existing debt on the convention center.

As part of the term sheet, Bloomington would pay off the existing debt, which is about $2.5 million. The only other direct compensation for any real estate would be for property that the county has acquired using “non-convention center-dedicated funds.” That appears to be synonymous with “funds other than innkeeper’s tax revenue.”

Other property that has been acquired by the county for the convention center expansion, like the former NAPA auto parts store at 3rd and Walnut Streets, would simply be transferred to the city, without cash compensation.

There are two items among the initially proposed terms that do not appear to have a direct connection to tourism or a related property transfer.

Under the terms, Bloomington would transfer to the county health department the city’s share of the statewide opioid settlement, which amounts to a total of about $1.9 million. Under a separate item on the term sheet, Bloomington would agree to operate public bus service outside city limits to Ivy Tech, charging the county the actual extra cost to provide the service.

Also included in the term sheet is the county’s retention of receipts from the food and beverage tax that are collected outside the city limits. But that’s already how receipts from the tax have to be distributed under state law. [IC 6-9-41-13]

The Friday release of the initial term sheet came after a Wednesday pitch made by Greater Bloomington Chamber of Commerce president Eric Spoonmore and Bloomington deputy mayor Don Griffin to county commissioners. Their pitch came during public commentary at the regular Wednesday meeting of the commissioners.

At that meeting, Spoonmore told commissioners he had a spot on next Tuesday’s regular county council meeting. The initial term sheet was included in the information packet released in mid-afternoon on Friday for the county council’s Tuesday meeting.

Spoonmore has been conducting a kind of shuttle diplomacy between the county and the city on the convention center expansion.

Responding to a B Square question on Friday afternoon, Spoonmore stressed that the initial term sheet is supposed to be just the start of a conversation. “My goal going into this is for everyone to have an open mind—that this is just a starting point,” Spoonmore said. He added, “ Based on my conversations with the city administration, …they’re willing to consider any reasonable response.”

County commissioners did not respond on Wednesday, saying they had not been given any details of the proposal.

It will be the county council that has the first public venue to discuss the issue. Responding to a B Square question on Friday, county councilor Geoff McKim said, “I support in principle the idea of transferring the convention center to the city. I see the offer that is being made as a good opening to the conversation.”

Responding to a B Square question on Friday, county councilor Marty Hawk said she wanted the county legal department to outline the legal steps that would be required for any such deal.

Hawk noted that the innkeeper’s tax is enabled under a state statute, and she wants to make sure that no deal the county might strike would wind up being a way to try to circumvent the state statute. [IC 6-9-4]

Analysis of initial term sheet

Running buses outside the city limits to serve Ivy Tech has long been a topic of conversation. The legal questions that need to be answered are supposed to be included as part of Bloomington Transit’s strategic plan, that is currently being developed.

An arrangement to provide public transportation for Bloomington residents who travel just outside city limits to Ivy Tech could be negotiated outside any convention center land deal.

The roughly $1.9 million that Bloomington anticipates receiving from the opioid settlements are supposed to be paid out by drug companies over a period of 18 years. In addition, 70 percent of the local government settlement share has to be used for treatment, prevention, and care.

A county health department, more than any city government, would be in a better position to expend those funds under the requirements of the settlement. A case could be made that the city should look at transferring its opioid settlement money to the county health department, independent of a convention center deal.

Bloomington is proposing to pay off the existing debt on the convention center. But Bloomington would get the receipts from the innkeeper’s tax under the proposed deal. So the idea that Bloomington would pay off the existing debt would follow from the fact that the innkeeper’s tax is the source of funding for the convention center’s existing debt service.

So the city’s proposed deal suggests that the city sees the proposed transaction simply as a shift in the governmental stewardship of a tourism facility, which is funded by tourism dollars—not really a real estate deal.

That’s consistent with McKim’s commentary: “The county neither pays anything from general funds into the convention center nor takes anything out. It is funded by tourism dollars, which by statute the county controls.”

16 thoughts on “Bloomington’s initial convention center pitch: County transfers property, city pays debt, gets hotel tax

  1. For those of us who support the expansion of the convention center, this is a genius proposal.

  2. A constituent pointed out to me that the article makes it sound like the City would receive all of the hotel tax under this proposal — however, per the terms sheet, they would receive the “share of annual innkeepers’ tax received by the County currently used in maintaining and operating the Convention Center”, which is less than 50% of the total hotel tax revenues received by the County. The majority goes towards Visit Bloomington, which I don’t believe would be affected by this proposal.

  3. Or we could just elect a new mayor who knows how to work with other agencies.

    1. Or elect new county officials who care about the convention center

  4. Its noted that this proposal is being breathlessly delivered a few months before the election. It should not be deliberated before then.

    1. On several initiatives, like annexation, the mayor chose an adversarial relationship with the county, rather than being a trusted and fair partner. This is more of the same.

      In my opinion this is an insincere proposal, being used for reelection politics. For example, what else could the city do with the settlement funds received by the City from the distributor and J&J opioid litigation? Start their own public health department? Give a break.

      The mayor was a bully on raising taxes and now the money is burning a hole in his pocket. How does this help the county? Where is the equity? Give us a break.

      County Council should respectfully listen to the scheduled dog and pony show and try not to snicker when it finishes. After all, there is tradition: The Gentry Brothers invented the World-famous Dog and Pony show right here in Monroe county.

      I have some hope that the next mayor will be a true and faithful partner with the county. Our entire community deserves that.

  5. I bet the The Man with the Hat could sort this out. He seems to understand real estate value in that neighborhood.

  6. The city is the only entity trying to move thus forward. In terms of annexation, the city followed the procedures and the county wasn’t happy, so they whined and ginned up state legislation to stop it which was eventually found to be unconstitutional. It’s the county that doesn’t want to cooperate

    1. The annexation clown car was last seen veering off the road through tall weeds. DUI was suspected, but not proven. I’m not sure we will see it back on the road again.

      There is very good reason that county residents don’t want to be part of the city. For example, the mayor substantially raised taxes on everyone in the county, because he had spent the city into a multi-million dollar hole. (Disclosure: the tax increase is estimated to cost me $1,000 extra per year, after year.)

      Time after time, the mayor created ill-will both in and out of the city. He has shown that he can’t be trusted.

      I predict that the Hail Mary move on the convention center will just another failure, in a long string of failures.

  7. “Follow the money.”

    Who would economically benefit from the mayor’s mega convention center? The owners of hotels, restaurants, and bars. All the hotel profits leave our community. Local restaurants and bars are being bought up and consolidated. Jobs? How much will mopping the convention floors pay?

    “Build it and they will come.” Only in the movies. Remind me, what is the market segment? Who will want to convene here?

    How stable is the tax base? What happens if the bar tax is rescinded? Thank Buddha that this project did not launch before the pandemic. That would have been a double disaster.

  8. What is the food & beverage tax rate? 1.5% ? Should Locals be nipped on every beer and burger to fund a convention center serving non-locals and largely profiting out of state actors? How does the community benefit? At what cost?

  9. Given that the city raised income taxes over the entire county, it would be appropriate for the county to rescind the food and beverage tax to partially off-set that whopper income tax increase.

  10. It might be a better investment to build a casino on that property. Convention centers are too 20th century. Technology is making them obsolete.

  11. I was thinking about conventions in 2050. By then, Meta technology (virtual reality) will be so established that every industry and product will have a virtual showroom, that can be linked as a convention. Likewise for convening fields of science. Here is a YouTube video of Rockwell technologies in a 2050 convention.

  12. Over many years, the county invested wisely in choice real estate. Look how much they own near the center of the city. I predict in a decade, the justice center property will be evolving too. It enjoins the county parking garage as a whole city block.

  13. The GOP wants to plunder Social Security. The mayor wants to plunder the county. How should we handle these people?

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