Dive Brief:

Indiana Gov. Eric Holcomb has signed off on two major subsidies totaling $390 million for Indiana sports facility construction, the Associated Press reported.

The state will pay $270 million for renovations at Bankers Life Fieldhouse, the Indiana Pacers’ NBA arena, and $120 million toward professional soccer team Indy Eleven’s new $150 million stadium with revenue from tax subsidy districts.

The deal, which will divert money from the state, city of Indianapolis and local schools, will keep the Pacers in Indianapolis for the next 25 years. The team's portion of the subsidy, according to CBS4 WTTV, will round out a $360 million arena renovation plan that will see the city spend $25 million on infrastructure improvements and the team contribute $65 million toward construction.

Dive Insight:

State and local governments are willing to sometimes make these kinds of contributions to sports stadiums and arena projects, especially if a team is being courted by another city or state that is ready to offer a new facility or other financial support.

In late 2016, Atlanta struck a similar deal with the Hawks to keep them playing at Philips Arena through 2046. The city agreed to pay more than $142 million toward a $192.5 million renovation using the proceeds of a rental car tax valued at $110 million, the $12.5 million sale of Turner Field and other property sales worth $20 million. If the team leaves before 2046, it will pay a penalty of $200 million.

There is sometimes pushback from taxpayers when officials want to help pay for these projects using public funds, but the alternative can mean the loss of a professional team plus the economic payoff of a large-scale construction project, including plenty of construction-related jobs.

Before Los Angeles Rams owner Stan Kroenke moved the team back to Los Angeles, St. Louis did its best to keep the Rams there with a financing plan for a new $1.1 billion stadium after much debate about how much the city should contribute. The plan demanded high levels of minority participation and included a union concession that would have seen three-shift, round-the-clock construction with no overtime. However, once the NFL approved the Rams’ move to Los Angeles, there was probably no deal that could have kept Kroenke from pursuing his vision for a massive stadium complex there.

Recent sports project announcements, however, have included more private financing with relatively minor or no contributions from taxpayers. Precourt Sports Ventures, for instance, announced in March that it would invest approximately $475 million in a new stadium project in Austin, Texas. The undertaking includes a $240 million, 20,500-seat stadium, a training facility and various public amenities around the stadium. Construction is expected to create 1,500 jobs and $163 million of local economic benefits.