CIB expects to top pre-pandemic revenue numbers with $156 million budget for 2023

The Indiana Convention Center is operated by the Capital Improvement Board. (Photo IIB/Wes Mills)

The organization that oversees the Indiana Convention Center, Lucas Oil Stadium and other sports venues in Indianapolis expects tourism industry operations to return to pre-pandemic levels next year as part of its budgeting process.

The Capital Improvement Board on Friday approved a budget of $155.6 million for 2023, up from about $149.5 million in revenue CIB earned in 2019, the year before the pandemic. It also projected a net deficit of $2.4 million in 2023 which would be covered by reserve funds.

Although the council’s projected revenue for 2023 is higher than 2019, the amount is actually a decrease from the 2022 budget of $180 million. However, the 2023 budget does not include the $30 million from federal pandemic relief funds that were rolled into this year’s budget.

The 2023 budget calls for a decrease in operating expenses of 25% compared to this year, to approximately $134.7 million. The projected figure marks a substantial decrease (approximately $32.1 million) in planned capital expenditures, primarily due to lower pass-through revenues.

Tax revenue, which accounts for about two-thirds of the CIB’s budget, is expected to be about $126 million, nearly 14% higher than this year’s figure. It’s also about 12% higher than 2019’s $111 million figure, with revenue from hotel, admission, and food and beverage taxes matching or exceeding revenue this year.

CIB’s operating revenue is still about $9 million lower than 2019 figures. In that year, CIB had about $38.45 million in operating revenue, but in 2023 that should be closer to $29.6 million. Rental revenue is still about $2 million below pre-pandemic levels, at about $8.5 million.

The budget says the CIB expects tourism and hospitality spending to be nearly recovered from the pandemic.

“As far as revenue goes, that’s really what we’re looking for,” CIB executive director Andy Mallon told IBJ of a return to pre-pandemic levels.

“We always try to keep the brakes on so we don’t add a whole bunch of favorite projects, but we try to use the resources available to CIB in the most impactful way to serve the hospitality industry and the continued success and sustainability of our facilities.

This does not mean that other costs do not increase. Wages and salaries have increased from 2022 figures, and there has been a spike in the cost of health insurance, as well as other insurance policies that cover the facilities themselves. Other expenses like contract labor and payments for public safety are also increasing.

Visit Indy is also set to receive its full contracted amount for the first time since the pandemic began, around $13.5 million, after taking a 20% cut over the past two budgets to help CIB cut costs. .

Mallon said Visit Indy is an integral part of what has kept the doors open at the convention center, and the return of a full budget to the organization is “well deserved.”

“They haven’t stopped doing all the wonderful and important things they do for the tourism industry and to sell our buildings,” he said. “So rather than relying on them to spend their limited reserves, we are restoring them to full funding. We should pay them that way…the proof of their value is in our full schedule.

The council’s projected debt service for 2023 is $23 million, about the same as this year. The CIB is expected to have about $106 million in unrestricted reserves by the end of this year.

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