KFC Yum! Center manager AEG Facilities gets five-year extension - WDRB 41 Louisville News

KFC Yum! Center manager AEG Facilities gets five-year extension

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Larry Hayes plans to resign from the Louisville Arena Authority given his new role on the University of Louisville Board of Trustees Larry Hayes plans to resign from the Louisville Arena Authority given his new role on the University of Louisville Board of Trustees

LOUISVILLE, Ky. (WDRB) – AEG Facilities, the Los Angeles-based company that manages the KFC Yum! Center, has agreed to a five-year contract extension that runs until 2027 and will set aside money for arena upgrades.

The deal was approved at Monday’s meeting of the Louisville Arena Authority, the board that oversees the downtown arena where the University of Louisville’s basketball teams play home games.

AEG was chosen in 2012 to replace the Kentucky State Fair Board as the arena’s operator under a 10-year contract. As part of the extension, the company will make two payments totaling $1.5 million for building improvements.    

But AEG also will get more to manage the arena -- $700,000 per year, up from its current management fee of $480,000. The payments increase each year to keep up with inflation.

“In this case, it’s a good marriage,” Larry Hayes, the arena authority’s chairman, said at Monday’s meeting.

AEG also will continue to get an incentive if it helps the arena boost revenues that the authority uses to pay off construction debt. And company also must keep guaranteeing that arena operations generate at least $1.5 million in profits each year or cover the difference.

The arena authority – a body appointed by Louisville’s mayor and Kentucky’s governor -- selected AEG in 2012 from among two other groups that submitted bids. In seeking the extension, the authority was not required to solicit other bids because the contract was amended, said Ed Glasscock, the board’s general counsel.  

“Under these circumstances, you’ve got a unique company and therefore you can go ahead as an authority like this and extend,” Glasscock said in an interview.

Gun ban

The Yum! Center also plans to modify its policy that now bans firearms from the building, giving concert promoters and tenants such as U of L the final say over allowing guns inside.

The issue emerged in September, when Stephen McBride of the Kentucky Concealed Carry Coalition told members of the arena authority that he believed the arena’s gun ban violated Kentucky law.

“As the individual promoters make a decision on firearms, we will then put on a separate sign on the glass” indicating that guns are banned at specific events, said Dennis Petrullo, the arena’s general manager.

A state law passed in 2012 stripped local governments, such as Louisville Metro, from banning firearms in government buildings.

The Yum! Center is a public building, but it’s not a government building – giving the arena authority the discretion to leave decisions on guns to arena tenants, Glasscock said.

Kenny Klein, a U of L athletics spokesman, said the university doesn’t allow firearms at any of its venues and plans to continue that policy at the Yum! Center.

McBride said at Monday’s arena authority meeting that his organization doesn’t object to the U of L policy, noting that the same Rupp Arena has the same rules.

“We’re not asking for anything that the law doesn’t,” he said.

Hayes to resign

Later in the meeting, Hayes announced plans to resign from the arena authority, in part because he now serves on the U of L board of trustees. He acknowledged that serving on both boards could be perceived as a conflict of interest.

“You can’t serve two masters, and I don’t want anyone to think that I am,” Hayes told arena authority members.

Hayes is the state’s outgoing Economic Development Secretary in Gov. Steve Beshear’s administration and has served on the arena board since its inception in 2006. He told reporters after the meeting that he plans to submit his letter of resignation to Beshear this week.

A spokesman for Beshear did not immediately respond to a phone message seeking comment on the pending vacancy on the board.

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