Louisville Arena Authority may seek changes to tax support - WDRB 41 Louisville News

Louisville Arena Authority may seek changes to tax support

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LOUISVILLE, Ky. (WDRB) – Seeking to improve its financial standing, the Louisville Arena Authority may ask Kentucky lawmakers to extend tax-funded support for the KFC Yum! Center for at least an additional decade.

Arena authority chairman Scott C. Cox said the board overseeing the building at Second and Main streets also is in talks with the University of Louisville, whose lucrative lease has been cited by Wall Street analysts as an obstacle to more money for bond payments.

Those moves come as the arena’s finances are under fresh scrutiny from legislators and Gov. Matt Bevin, who referenced a series of rising debt obligations during an interview with WDRB News last week.

At Monday’s meeting of the arena authority, Cox said the board is on track to cover its debt for several more years. But the annual payments are set to rise, from $23.1 million this year to more than $30 million starting in 2021.

“We are in very good shape until at least 2020 -- and maybe deep into 2020 -- but after that we are going to have some issues if we don’t change some things,” Cox said. “And that’s what we have started to do.”   

A portion of sales and income taxes generated near the arena was supposed to provide the bulk of revenues for the arena authority. But a tax increment financing, or TIF, district has failed to meet expectations, even as it produced more than $10 million in 2015.

Cox told reporters that the arena authority could ask the Kentucky General Assembly to let the TIF collect revenues for 10 more years than currently scheduled – or until 2039. He said that request could come as early as January, when the legislature convenes for a 30-day session.

He declined to discuss the details of conversations with U of L, including whether university officials are open to amending the lease at the Yum! Center. But speaking of U of L’s athletics director, Cox said: “Tom Jurich is a community-minded person and a team player and he wants the Yum! to succeed and be successful.”

Cox also indicated the arena authority is eying other revenue streams as a way to strengthen its finances, but offered no specifics. “I’ll tell you after we accomplish it in the coming months,” he said.

The arena authority is appointed by Kentucky’s governor and Louisville’s mayor. Bevin, who was elected governor last November, named Cox to the board earlier this year.

Cox said he believes the arena authority was taking the financial issues seriously prior to his appointment. “Everyone’s been alert and planning,” he said.

William Summers V, the arena authority’s vice chairman, deferred questions about the arena’s finances to Cox.

“We need to make some adjustments,” said Larry Bond, a board member who served as chairman before Cox’s appointment. Bond also was former Kentucky Gov. Steve Beshear’s chief of staff.

“We’ve got one of the best arenas in the country, and we’re happy with the operation,” Bond said. “We’ve got a very diligent board. I’m confident that Chairman Cox will make the adjustments necessary we need.”

With less money than forecast to make debt payments, the arena authority asked Metro government to increase its financial contribution to nearly $10 million – the maximum it can pay under a deal negotiated by the Metro Council.

Chris Poynter, spokesman for Louisville Mayor Greg Fischer, declined to say whether the city is open to changes to the U of L lease at the Yum! Center. “The state’s in the lead on that because it’s a state-owned facility,” he said.

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