Hoosier Lottery's costly move a "whim?"


INDIANAPOLIS - The Hoosier Lottery's new Meridian Street headquarters may not look like much from the outside, but inside, it's impressive.

The 35,000-square-foot office is visually stunning with lots of new artwork and furniture, and the lottery's director says the new offices are also practical, as well.

"We have a lot more meeting rooms. We have small meeting rooms. We have large meeting rooms. We have made the employee break room very, very large," explained Kathryn Densborn last week as she gave WTHR a tour of the new headquarters. "I never expected to do this, and then all of a sudden I had to do this so we dug in.

It appears the lottery "dug in" to their checkbook, and 13 Investigates has the numbers.

Furniture for gigantic break room cost more than $28,000 – that does not include thousands more for new artwork and appliances.

New furniture to fill nine conference rooms totals almost $50,000.

The lottery spent more than a quarter million dollars in new employee work spaces, even though 13 Investigates discovered many of them sit empty more than six months after the lottery moved into its new offices.

13 Investigates found invoices for $200 clocks, $319 mirrors, $553 chairs, $800 bar stools, $11,500 work tables, and state-of-the-art exercise equipment in the lottery's brand new workout gym that totals more than $25,000.

Densborn says a new headquarters was badly needed.

"For a lot of reasons it just made incredible sense," she said last week. "We needed to so some upgrading and we were running out of space."

But that is not true, according to some current and former lottery employees who talked to 13 Investigates.

"I don't think we were using space very efficiently at the old headquarters, but I wouldn't say we weren't running out of space," said one former employee who asked not to be identified for fear of retaliation. "No, we had open offices still available, plenty of open spaces on some of the floors."

The employee told 13 Investigates the multi-million dollar move from the Hoosier Lottery's old headquarters in the Pan American Plaza in downtown Indianapolis to its new offices on Meridian Street were unnecessary.

"We were all a bit stunned when we learned we were moving," she said.

"Moving was not required," said another longtime lottery employee. "It seemed just a whim to get a nicer office."

None of the current and former lottery employees who spoke to WTHR said they wanted to leave the old headquarters and its prime downtown location. They said they were surprised to see how much time and expense was dedicated to decorating the new headquarters.

"That really rubbed a lot of us the wrong way. It just seems to have gone overboard. It looks like a shopping spree gone awry," a former lottery worker said.

Densborn claims the new headquarters is actually saving money for taxpayers because, according to the director, the new office costs less than the old one.

"It's cheaper and I'm saving $105,000 a year in parking so that's hard to walk away from," Densborn explained.

At the new headquarters, the lottery is saving lots of money on parking because its included. At the old headquarters it was not.

But what the lottery director did not mention is the agency's new rent has skyrocketed - from $376,000 a year at the old headquarters to more than $660,000 at the new one. That's an extra quarter million dollars a year.

According to lottery PR director Al Larsen, the Hoosier Lottery's new office saves a bundle in reduced parking, utility bills and real estate taxes.

But even all that does not offset the extra cost of the new rent payment.

Since WTHR began reviewing the lottery's expenses and reviewing its contracts, Densborn has declined repeated requests to meet with WTHR to answer questions regarding millions in costs related to its new headquarters.

In the meantime, the lottery continues to build and decorate within its news offices, and the costs continue to rise. This month, Hoosier Lottery workers learned they will not receive their full annual bonuses because lottery revenues did not meet goals.

Hoosier Lottery proceeds go directly to your wallet in the form of lower excise taxes. They also fund teacher, firefighter and police officer pension plans.

Note: Following our report, 13 Investigates saw officials from the governor's office visit the Hoosier Lottery's new headquarters this afternoon. A spokeswoman from the governor's office did not respond to any of WTHR's questions about the visit.