The Indiana Pacers and Indianapolis have agreed to a 25-year deal that commits roughly $800 million in public spending to keep the team in town.

The Marion County Capital Improvement Board, which owns or manages the city's professional sports stadiums, voted unanimously in favor of the 157-page agreement at a Friday morning meeting.

It will add amenities such as a big outdoor plaza, suite upgrades and an indoor fan deck and keep the Pacers in town through the 2043-44 NBA season, with options to extend it another three years.

The terms include $295 million in public money announced at the meeting to upgrade Bankers Life Fieldhouse and roughly $362 million — described by the CIB later in the day as averaging $14.5 million a year over 25 years — to operate it over that time. The CIB would spend another $120 million on technology upgrades over 10 years, after which the board and the Pacers would renegotiate those terms to keep up with new tech.

It also includes $17.6 million on maintenance and $4.6 million for the video and sound system that the CIB had previously agreed to pay.

Taxes that pay for the deal are a source of debate

That $800 million total would come from a mix of local and state sales and income taxes that are collected on auto rentals, hotels and other amenities in some proximity to the fieldhouse.

Supporters of the project defend this type of public spending and note the team's impact on jobs and the local economy, though that tax money would otherwise flow to the state, city, townships, schools and city-county library.

Little research exists to suggest such deals pay off from a fiscal standpoint, said Ball State University economist Michael Hicks. And, he said, that can raise questions in a city like Indianapolis that has substantial infrastructure, schools and public safety needs.

“I think that’s a big ask for a relatively small number of jobs that are associated with the Pacers,” he said.

The terms are still contingent on the Indiana General Assembly creating a way to pay for most of that deal.

State legislation creates a framework for Pacers deal

That's the purpose of Senate Bill 7, which the Indiana House advanced on a 78-13 vote late Thursday. The intricate legislation would do the same for a proposed $150 million soccer stadium for the Indy Eleven. It now heads to the Senate.

The CIB, funded through that legislation, would provide $270 million toward upgrades of Bankers Life Fieldhouse over the course of the 25-year extension. The city would contribute the remaining $25 million for public infrastructure, contingent on the City-County Council's approval.

For operating expenses, the CIB will provide $12.5 million per year in the first six years, $13 million annually for the following six years, then rising to $16 million a year for the remainder of the deal, city officials said.

City officials say that's a savings because the Pacers currently receive about $13 million per year with an annual bump of 3 percent.

In a statement Friday through a spokesperson, Mayor Joe Hogsett said of the agreement: "Over the coming weeks, it is my hope that the spirit of collaboration exhibited today will carry forward into bipartisan support for this agreement at the state and local level."

Under the terms, the city and Pacers will spend $360 million to upgrade Bankers Life Fieldhouse and to create a sprawling public plaza along Pennsylvania Avenueover the next three years. That amount includes $65 million from the Pacers.

Melina Kennedy, the president of the CIB board, said the Pacers are vital to Downtown. She thinks the deal will support $13 billion in economic impact over 25 years.

She said the team alone supports 4,000 tourism, event and hospitality jobs with $152 million in annual wages and accounts for $15 million in annual taxes.

The fieldhouse itself, which opened in 1999, hosts 550 events annually and attracts 1.7 million people to Indy.

The contract includes clauses to protect the city to ensure the Pacers stay the full 25 years, perhaps most notably a fee — as much as $750 million — the team would have to pay if it leaves town early.

Upgrades include new plaza, observation deck, suite enhancements

Inside the stadium, there will be more public areas where people can congregate. The top eight rows of seats will be removed on the east and west ends to create horseshoe-shaped gathering places. The team also will add observation decks and enhance the suite areas.

The Pacers are fronting $38 million from their share of the deal to purchase land for the public plaza, including the private parking garage north of the stadium. The team and the city will tear down that parking garage, likely in 2022, to build the plaza, with a front along Pennsylvania Street. Under the terms, the Pacers also will pay to operate the plaza.

The area can host concerts and other events and will include a public ice skating rink in the winter and a public basketball court in the summer.

Home of Indiana Pacers:How Bankers Life Fieldhouse will get a new name

"It's really important that we have a world-class facility that continues to attract fans," Kennedy said.

The city's share of the revenue will go toward the public plaza and other improvements outside the stadium, not for work on the fieldhouse itself.

"In our minds, the plaza is where the vast majority of that money will go," said Thomas Cook, the mayor's chief of staff. "There is no real precedent for city dollars going into the building itself and it is only frankly because of the exterior improvements that there is even city money in this, and it's because we've got Georgia Street and the Cultural Trail colliding with a major public investment."

Team president Rick Fuson said the Pacers want to be at the NBA's forefront in terms of having a state-of-the-art stadium.

"As we look at the future we will be competitive," he said, "we believe we have a good start on what will be the fieldhouse of the future."

The Pacers, state and the CIB have been negotiating a new deal for months. Pacers owner Herb Simon, who is 84, has been motivated to cement the Pacers' legacy as Indianapolis' home team.

"They love Indiana," Pacers executive Jim Morris said of Simon and his family. "Indiana has been so good to them. Over the past 35 years they have become the most respected owner in the NBA and they operate a franchise that we can put up to compete, in terms of the quality of the operation and the integrity of the place, with any professional sports franchise anywhere in the country."

The Pacers have been floating the idea of signing an extension in return for publicly funding upgrades to Bankers Life Fieldhouse for two years. IndyStar previously reported the Pacers would sign a 25-year deal, the minimum allowable in Senate Bill 7, but the cost of the deal had been unknown.

The new deal will supersede the Pacers' current one, $160 million in public money over 10 years, which essentially was a 5-year lease extension set to expire in 2024. The team uses public cash for operations and improvements at Bankers Life FIeldhouse.

Indianapolis also is considering a $120 million expansion of the Indiana Convention Center that's become politically intertwined with the bill. Under terms being discussed, the city would pay for that expansion with property taxes collected from two massive Hilton hotels proposed to open in 2023 on Pan Am Plaza.

Local hoteliers have been opposing that deal. They say there's not enough business for the new hotels, which total 1,400 new rooms. They also say the proposed 80,000-square foot Convention Center expansion is too small for so large a project.

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