May 15 (Bloomberg) -- The Indiana agency that supervised February’s Super Bowl lost $1.1 million hosting the National Football League championship game, about 38 percent more than it predicted.
The Capital Improvement Board of Marion County, which runs Lucas Oil Stadium and the Indiana Convention Center in Indianapolis, said earlier that it expected to have a loss of about $800,000 for the Feb. 5 game, the first Super Bowl the city hosted.
The authority paid $349,718 in insurance, legal fees and snow-removal equipment costs it thought would be reimbursed by the NFL and wasn’t, spokesman Robert Vane said. At the same time, the board collected $2.9 million more in taxes than in the previous January and February, he said.
“The economic impact to the city more than offsets any shortfall,” Vane said in a telephone interview from Indianapolis. “When you’re talking about marketing the city to the world, it was well worth it.”
The shortfall will be covered from the Capital Improvement Board’s cash reserves, Vane said. The board had to prepare its budget before the NFL determined what expenses it would reimburse, he said.
NFL owners voted in 2008 to hold the 2012 Super Bowl in Indianapolis. The state’s website describes a potential economic impact of $286 million. A study from Ball State University in Muncie, Indiana, said the game may be worth $365 million in economic activity, noting that figure didn’t account for public-sector spending.
The city prepared for the game with measures including $4 million in public-safety spending and $12 million to turn a four-lane street into a three-block pedestrian plaza that housed a week-long Super Bowl village, including what organizers said was the nation’s longest temporary zipline.
Marc Lotter, communications director for Mayor Greg Ballard, said at the time the game was “putting us in front of corporate decision-makers, convention planners, event planners that can have an impact on the city for a long time to come.”
Those numbers may be about three to 10 times higher than the game’s actual value, however, based on data such as employment, tax receipts and personal income, according to Victor Matheson, an economist at the College of the Holy Cross in Worcester, Massachusetts, who has studied the impact of large sporting events.
“The budget for the Super Bowl is a fairly small component of the expenditures of the Super Bowl,” he said in a telephone interview. “The big expenditure component is the fact that Indianapolis had to build a brand new, almost entirely taxpayer-financed stadium to have any chance to attract the Super Bowl in the first place.”
Paying for the $720 million home of the Indianapolis Colts, where the New York Giants beat the New England Patriots 21-17 for the NFL title, forced local officials to raise hotel, restaurant and rental-car taxes. Public debt for the stadium, which opened in 2008, eventually rose to $666.5 million, while the Colts financed about two-thirds of their $100 million share through local-government issuers.
The board collects about $120.6 million in fees and other payments to cover running the stadium and other venues, more than double the $58 million it would have received from taxes in place before work on the stadium began, according to financial statements.
Indiana increased efforts to attract sports organizations and events in 1979 with the creation of the private, not-for-profit Indiana Sports Corp. The home of the Indianapolis 500 auto race attracted the Pan Am Games in 1987. In 1999, the National Collegiate Athletic Association moved its headquarters to the city.
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