Lottery defends luxurious new offices

The Hoosier Lottery moved into a new headquarters building on North Meridian.
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INDIANAPOLIS - 13 Investigates has uncovered big questions about a multi-million dollar contract signed by the Hoosier Lottery.

The lottery claimed its new headquarters would save taxpayers money, but a look inside reveals what some are calling extravagant expenses. The accommodations are very nice and when it comes to the numbers, 13 Investigates found they don't add up.

The director of the Hoosier Lottery recently took Eyewitness News on a tour of the Lottery's new headquarters and what we saw inside made us ask a lot of questions.

Nine conference rooms - most decked out with brand new furniture - a massive break room and multiple coffee bars and lounges with new custom artwork, six microwaves, five refrigerators, three dishwashers, four flat screen TVs, even a workout room with brand new state-of-the-art equipment. It contains more than 35,000 square feet of office space - all for 83 employees.

"I mean, this building is beautiful," said Director Kathryn Densborn.

Densborn said the lottery was running out of space at its old headquarters at the Pan Am Building downtown, so she decided to move out to a historic building on Meridian Street, where everything has been custom designed by the lottery.

"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. So we could have our gatherings there," Densborn said. "I didn't expect to be moving, actually, so it kind of took on a life of its own once we started crunching the numbers and looking at everything, so here we are."

The numbers, according to Densborn, provide a big savings to taxpayers, especially since the old downtown headquarters did not include parking, which was a big extra cost.

"For a lot of reasons, it just made incredible sense," she said. "$105,000 a year just in parking. That was my parking bill."

It sounds like a great deal - but not so fast.

13 Investigates obtained both the new rental contract and the old one. Rent and parking used to cost $467,484 per year. Now, it costs $630,030 per year and that number will be going up to almost $700,000 during the life of the contract. Bottom line, over the next ten years, that would amount to an extra two million dollars.

The lottery's public relations director, Al Larsen, tells 13 Investigates utility and real estate taxes at the old headquarters added up to a lot, and that offsets some of the extra rent at the new headquarters, but it appears the new lottery offices are still more expensive than the old ones.

The lottery director says the 83 employees who work at the new headquarters love their new space and it's more convenient for the public. But is all this really necessary - especially since the rent is so much more expensive? Densborn stands by her decision and told us she didn't feel like she had any choice.

"I never expected to do this and then all of a sudden, I had to do this and so we dug in," she said.

Eyewitness News asked her to explain why she said she had to do it.

"From a financial standpoint, it's hard to walk away from those numbers, so we dug in and said, 'Okay, we've gotta do what's best'," Densborn said.

What's best for the lottery may not be best for Hoosier taxpayers. Lottery proceeds go directly into your pocket in the form of lower vehicle excise tax - and millions more are set aside for the pension plans of Indiana teachers, firefighters and police officers.