Kentucky legislative leaders open to bill aiding Louisville Aren - WDRB 41 Louisville News

Kentucky legislative leaders open to bill aiding Louisville Arena Authority

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LOUISVILLE, Ky. (WDRB) – Kentucky House and Senate leaders indicated Monday that they plan to push for changes to the state’s tax-increment financing program, a move that could aid the Louisville Arena Authority’s plan to improve its struggling finances.

The arena authority is urging the General Assembly to pass a bill that would allow it to amend a district around the KFC Yum! Center that returns a portion of sales, property and other taxes to help pay off construction debt.

The Senate plans to address the tax rebate legislation during the session that ends in March, said John Cox, a spokesman for Senate President Robert Stivers. Through a spokeswoman, House Speaker Jeff Hoover said: “We fully intend to file and pass legislation that would extend tax increment financing to help with future refinancing needs.”

The arena authority – a nonprofit corporation appointed by Louisville’s mayor and Kentucky’s governor – wants the tax increment financing, or TIF, district to be able collect those tax monies for up to 30 years, compared with 20 years under state law. It also wants to lift a current cap on TIF revenue of $265 million.

Scott C. Cox, whom Gov. Matt Bevin appointed as arena authority chair last year, said Monday that the governor’s administration is in favor of a possible TIF measure. (Scott Cox and John Cox are not related.) Bevin is a Republican, and the GOP controls both chambers of the state legislature.

“We’re hopeful that legislation will be initiated in February when they reconvene, so we have our fingers crossed there,” Scott Cox said. “We’re continuing to meet with legislators around the state to explain what our financial situation is and persuade them that now is the time to move on it.”

Arena officials ultimately hope to refinance the arena bonds, which have roughly $700 million in principal and interest remaining, and secure investment-grade ratings on the debt. Currently the bonds are considered “junk.”  

Getting an investment-grade rating could save as much as $80 million in interest costs, said Tom Liston, an adviser to the arena authority.

The arena authority has acknowledged it won’t be able to make debt payments as early as 2020 unless it generates more revenue. The TIF district has lagged behind original projections, although it has climbed in recent years.

In December, the Louisville Metro Council passed a resolution giving Mayor Greg Fischer the power to negotiate new terms for the city’s financial contribution to the arena.

State action could be a “strong incentive” to encourage U of L and the city to amend the terms of the arena deal, Cox said. He said he’s spoken to some legislators who have told him they’d be willing to support a TIF bill if it puts the arena authority on solid, long-term financial footing.

“We’re convinced that the plan that we have would accomplish that,” Cox said.

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