Chris Sikich | IndyStar

Matt Kryger, IndyStar

Update: The Indiana House voted 78-13 late Thursday to approve legislation that would find ways to pay for a 25-year extension for the Indiana Pacers and a $150 million soccer stadium for the Indy Eleven.

The Senate passed its own version of the bill in February. A House-Senate committee will negotiate a final version before the session ends later this month.

The Marion County Capital Improvement Board will consider the Pacers lease extension at 8:30 a.m. Friday morning, at which point the cost to keep the team in Indy will be publicly available.

Earlier: A bid to keep the Indiana Pacers in town another 25 years would no longer rely on tax money from a towering hotel proposal on Pan Am Plaza, a project that's drawn protests from Downtown lodging interests.

The move by the Ways and Means Committee essentially kicked the ball to Indianapolis of whether to move forward with the Hilton hotels and a project its taxes would help pay for, a $120 million expansion of the Indiana Convention Center. Indianapolis would fund the expansion as part of Kite Development's proposal to build a 38-floor, 800-room Hilton Signia tower and an adjacent 600-room sister hotel on Pan Am Plaza.

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Pacers to kick in $63M: As part of deal to keep team in Indianapolis

"We are out of whatever discussions there are regarding local hotels," committee Chairman Todd Huston said. "We will use existing hotel revenue."

Hotel owners who are worried there's not enough business to support the Hilton project have emerged as the most significant resistance to Senate Bill 7, intricate legislation being negotiated between Indianapolis and state officials.

The bill has involved three big items: the proposed 25-year lease extension for the Indiana Pacers, the $120 million expansion of the Indiana Convention Center and a $150 million soccer stadium.

The committee unanimously passed the bill, which now heads to the House floor and possible additional changes.

Lawmakers have heard mostly support for the Pacers deal and the soccer stadium.

Hotel owners, though, have launched an advertising campaign against the Hilton project and have been intensely lobbying state lawmakers and city officials to stop the project.

They say Downtown can't support so many new rooms and have questioned whether taxpayers should pay for "luxury" hotel towers, despite the fact many have received the same types of benefits.

Their opposition has clouded the $120 million expansion of the Convention Center, which relies on property taxes that would be generated by the Hilton hotels.

The state washed its hands of the issue by finding a different way to pay for the Pacers extension, which also had relied upon funding from the Hilton hotels.

The city, at this point, still supports building the Hilton hotels and funding the Convention Center expansion. The size and scope of the Hilton project, though, seems likely to be a point of negotiation as the city moves forward. Hotel owners say the HIlton project includes too many rooms and not enough convention space.

As it stands now, the state will be out of those talks.

"Today's display of unanimous support for Senate Bill 7 is another productive step forward toward a taxpayer-friendly vision for the long-term funding of some of our state's most critical assets," said city spokeswoman Taylor Schaffer. "These facilities serve as an economic engine for Indiana and I applaud the continued work of the General Assembly as we move closer to preserving the progress we've made over the last five decades without a single tax or fee increase for Hoosier taxpayers.”

Terms of the Pacers' lease extension have yet to be disclosed. The Pacers are kicking in about $63 million for improvements to Bankers Life Fieldhouse and related facilities, such as the parking garage.

Revenue for any deal for the Pacers would come from a mix of existing income, sales, innkeepers, admissions and auto rental taxes collected mostly from within tax districts located Downtown. None of them would go up, but without these districts, that money would otherwise flow to the state, city, townships, schools and city-county library.

The Capital Improvement Board would manage that money, using it to ink the deal with the Pacers and to provide other upgrades to facilities it manages, including Victory Field and Lucas Oil Stadium.

After Monday's changes to the legislation, the CIB would now rely on existing taxes generated from the new Hyatt hotels near Bankers Life Fieldhouse, as well as the Crowne Plaza, the Omni, the Embassy Suites, the Conrad, the Hilton, the Sheraton and the Alexander.

Huston said he was more comfortable using tax money generated by existing hotels, rather than proposed hotels like the Hiltons, to fund the CIB and the Pacers extension.

"Besides all of the interesting discussions we've had," he said, referring to certain hotel owners' opposition to the Hilton hotels, "...it was our position that we would use existing revenue. It's very easy to see. We know from those eight hotels how much revenue they would provide. It provides certainty."

Hotel owners took the changes to the legislation as a win, though they will have to continue to lobby the city for the changes they want.

"The Downtown hotel owners coalition continues to work with members of the General Assembly to ensure the economic health of the downtown Indianapolis hospitality industry," said Jim Dora, president of General Hotels. "Senate Bill 7, as amended today, is a step forward and helps safeguard tax dollars from subsidizing a reckless flood of new downtown hotel rooms – without substantial and meaningful increased demand – in less than five years."