Indy looks to limit 'religious freedom' damage

The reviews are in.

From institutions such as the NCAA to major employers such as Eli Lilly and Co. to the city's Republican mayor, Indiana's new "religious freedom" law is almost universally loathed by Indianapolis' political and economic elite.

But what can the city do about it?

"That's a very good question," said Councilman Zach Adamson, a Democrat.

Signed by Republican Gov. Mike Pence on Thursday, the Religious Freedom Restoration Act in effect sets up a new litmus test for state courts, prohibiting state or local governments from "substantially burdening" a person's ability to exercise religion, unless the government can meet certain criteria.

But opponents fear it will become a license to discriminate because it could allow business owners to refuse service to gays, lesbians and bisexuals based on their religious beliefs.

In Indianapolis, the backlash has been immediate and severe.

Gen Con, the city's largest convention with 56,000 visitors last year and an economic impact of $50 million, initially threatened to relocate. Two others have followed suit, and countless businesses have complained that the bill will make it difficult to recruit young talent to the city.

Now city and business leaders have shifted into damage control and are exploring actions they can take to ensure that residents and visitors alike won't face discrimination under the law.

Joe Whitsett, a principal with TWG Development LLC, on Wednesday began circulating a petition to urge the City-County Council to introduce an ordinance prohibiting discrimination under the new law. He said in an email he plans to present it to the mayor's office Friday.

"While we apparently cannot control what they do in the statehouse, we can make it clear that in Indianapolis we do not tolerate bigotry and discrimination," Whitsett wrote.

Although the City-County Council likely would have the votes to pass such an ordinance — just more than a year ago, it passed a resolution urging the legislature to back off from a proposed same-sex marriage ban — it's not at all clear that the city would have the power to do much of consequence.

"This is the really rotten thing about Indiana," Adamson said. "The state enjoys a great deal of oversight over the municipalities."

Complicating matters further, a provision in the bill says that no local law can be "exempt" from the new "religious freedom" rules unless a state law explicitly exempts it. In other words, the legislature might have to approve any workarounds the city comes up with.

Still, Adamson said he and others are looking into what the city can do. For starters, the council on Monday will consider a resolution denouncing the RFRA and asking the state to address discrimination concerns.

After that, council members will wait to hear back from their legal advisors on potential next steps.

The more pressing question might be whether the new law will override an ordinance already on the books. In 2005, the council added sexual orientation to its anti-discrimination ordinance, making it a protected category alongside race, sex, religion, nationality and other characteristics. State law doesn't contain specific protections for sexual orientation.

"Nobody can really confidently say exactly how the courts are going to apply this language," said Fred Biesecker, the council's attorney.

"I think the people who said this is going to result in a lawyer bonanza or a lot of litigation are probably right."

Under the city's existing ordinance, Biesecker said, a gay couple who are refused service at a restaurant could file an administrative complaint under the human rights ordinance, which then triggers an administrative process.

"With Senate Bill 101, I could certainly see the restaurant owner saying, 'Well, you're substantially burdening my exercise of religion,' " Biesecker said.

"How it would come out? Who knows."

He likened the new "religious freedom" litmus test to that of voting laws, which are frequently subjected to legal challenges.

"And we all know how clear the courts are on that," Biesecker said, tongue in cheek.

With so much uncertainty in how courts will rule, business leaders say it's critical that the city try to do something if the state won't address the discrimination concerns.

"In our February testimony in front of the Senate Judiciary Committee, we warned of the impending negative economic impact this legislation would have on our ability to attract and retain jobs, talent and investment," Indy Chamber President and CEO Michael Huber said in a statement. "Within moments of this legislation being signed, this warning became a stark reality."

Although that message fell on deaf ears at the Statehouse, there are signs that it's resonating nationally.

Gen Con on Thursday sent a letter to its attendees, saying that conversations this week with local officials have assuaged the convention's concerns.

"For as long as we stay in Indianapolis, we will stand shoulder-to-shoulder with this community, expand our efforts to bring more diversity to Gen Con, and welcome all," convention CEO Adrian Swartout wrote.

Meanwhile, Huber promised that the Chamber would work with state and local policymakers to strengthen nondiscrimination policies in response to the new law.

Legal experts differ on the exact effect the law will have, but many agree that it won't do nearly as much as the rhetoric on either side suggests. But at this point, it might not matter from an economic development perspective; the damage to Indiana's image has been done.

"This is clearly not how we want to be perceived and is not reflective of how we do business in Indianapolis," Huber said.

Call Star reporter Brian Eason at (317) 444-6129. Follow him on Twitter: @brianeason.