Kentucky Attorney General: Arena officials don't have to pay Fai - WDRB 41 Louisville News

Kentucky Attorney General: Arena officials don't have to pay Fair Board for lost business from Freedom Hall

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LOUISVILLE, Ky. (WDRB) – The Kentucky State Fair Board isn't entitled to millions of dollars it lost when the University of Louisville basketball teams moved from Freedom Hall to the KFC Yum! Center, according to Attorney General Jack Conway.

The fair board long has contended the Louisville Arena Authority owed $7.5 million it had promised to pay under an agreement struck prior to the building at Second and Main streets opening in 2010. At the time, the fair board was the arena's manager.

With the lucrative U of L men's program moving downtown, the arena authority pledged to pay the fair board for the lost business – a so-called “Freedom Hall reimbursement” -- in an amount of $750,000 per year.

Both parties ended the agreement in 2012, and in 2013 the arena authority agreed to pay the fair board $1.5 million to settle costs related to the fair board's management of the arena.

In an informal opinion issued Friday, Conway's office acknowledged that other loan and bond-related documents involved in the arena deal mention the payments to the fair board, but “there are no contractual provisions in place” that require them.

“Accordingly, (the Louisville Arena Authority) is not required to pay the negative impact reimbursement,” Assistant Attorney General Matt James wrote.

READ CONWAY'S LETTER

The fair board had argued that it believes the money is owed under its reading of arena financing documents. Board president Clifford "Rip" Rippetoe and spokeswoman Amanda Storment did not immediately return phone messages seeking comment Friday.

The two agencies -- both with members appointed by Kentucky's governor and tied to state government – had fought for years over the lost revenue from Freedom Hall.

The Yum! Center, home to U of L's men's and women's basketball teams, is a lightning rod for critics who claim the rent agreement provides overwhelmingly favorable terms to the university, while the taxpayer-funded project has struggled at times to make debt payments.

Last July, the state legislature's capital projects and bond oversight committee asked Conway for an opinion on three matters.

Besides resolving the payment dispute, the panel asked Conway to decide whether any current or past arena authority members had conflicts of interest under Kentucky or federal tax and securities laws; and whether the September 2013 reduction of a tax increment financing district, or TIF, near the arena was legal.

Conway's office declined to issue an opinion on the conflict-of-interest issue, saying “we are not presented with any specific information as to the persons who may have had the conflicts or the laws such persons may have violated.”

(Most notably, the arena board over the years has included members with ties to the university, including James Patterson, for whom the U of L baseball stadium is named; Ulysses “Junior” Bridgeman, a Louisville businessman and former U of L star; and Jim King, the late President of the Louisville Metro Council who also served on the U of L athletic association board.)

In addition, the Attorney General's office said in the informal opinion that Metro Government was “acting within its authority” when it altered the size of the TIF.

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