Clarification: Under terms of the deal the state and city are discussing in Senate Bill 7, the city would direct $120 million from special taxing districts to an expansion of the Indiana Convention Center at Pan Am Plaza and $18 million toward infrastructure at two hotels near Bankers Life Fieldhouse.

The Indiana Convention Center would receive $120 million in renovations as part of a larger project in the works since last fall that would give Downtown Indianapolis one of the nation's largest ballrooms, a 38-story tower and 1,400 additional hotel rooms.

The key to the proposed expansion is securing a way to pay for it through legislation, specifically Senate Bill 7, which also involves a long-term deal to keep the Indiana Pacers in Indianapolis.

Here's more about the project and state lawmakers' efforts to bring it to fruition:

An upper-echelon convention city

The Convention Center expansion — which would include a 50,000-square-foot ballroom — would launch Indy into the upper echelon of convention towns, city officials say.

Under the terms being discussed, the city would direct $120 million from special taxing districts for a 300,000-square-foot expansion of the center on Pan Am Plaza, including the ballroom. A covered walkway over Capitol Avenue would connect that space to the main convention center.

The city also will direct $18 million from taxing districts to two other hotels under construction near Bankers Life Fieldhouse.

That would mark the first time the city has directly funded an expansion of the convention center.

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The highlight would be the ballroom, which would be among the largest in the nation. Tourism officials say having that kind of facility is a top priority for the biggest conventions.

The project has been in the works since at least October. Kite Realty Group proposed last fall to build two Hilton-brand hotels connected to the convention space with a total of 1,400 rooms, including a 38-story tower that would be a rare addition to the skyline.

The Convention Center's capacity is around 70,000 event attendees. The expansion could add space for another 20,000, Visit Indy Vice President Chris Gahl told lawmakers.

Where the expansion stands in the legislature

Senate Bill 7, which would help find a funding mechanism for the expansion, was the focus of a Feb. 14 hearing in the Senate Appropriations Committee that also involved a prospective Pacers deal. The measure faces a vote by the panel Feb. 21. The bill would then go to the full Senate.

Visit Indy's Gahl, who spoke Thursday before lawmakers on the committee, said the tourism bureau has conducted research that shows the city needs more convention and hotel space and is at risk of losing conventions if action isn't taken soon.

"Over the last two years we’ve heard from a growing number of the city's largest conventions who said they are literally outgrowing our city," he said.

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In 'zero-sum game': Indianapolis goes for win with expanded convention center, hotels

The new convention and hotel space would allow Indianapolis to retain $287.7 million in annual convention business and bring into play more than 200 other groups that have looked at Indianapolis but want more room than is available, according to Visit Indy.

The project already is paying dividends. Gen Con and the FFA both announced they would extend their deals with the city because of Kite's development plan, according to Visit Indy.

The Indiana Convention Center's last expansion, a $275 million overhaul in January 2011, doubled its size to 1.2 million square feet, which gives the city the 17th-largest convention center in the nation.

Call IndyStar reporter Chris Sikich at 317-444-6036. Follow him on Twitter: @ChrisSikich.