LOUISVILLE, Ky. (WDRB) – A measure that would let the Louisville Arena Authority proceed with an overhaul of its finances is headed to the Kentucky Senate after winning approval in the state House on Monday.

House Bill 330 passed on a 79-14 vote. It gives the arena authority more time to collect tax revenue to aid debt payments for the downtown building that’s home to the University of Louisville basketball teams.  

Extending the tax increment financing district from 20 years to 45 years is one of several changes meant to shore up the arena authority’s ability to pay off construction bonds for the Yum! Center. The arena board, appointed by Louisville’s mayor and Kentucky’s governor, also hopes to extract more revenue from its contract with U of L and refinance the overall debt at lower interest rates.

The effort comes as Mike Harmon, Kentucky’s Auditor of Public Accounts, has launched a review of the arena authority that was requested by the state’s capital projects and bond oversight committee.

Rep. Jim Wayne, D-Louisville and a former member of the bond oversight panel, cautioned the House against rushing the bill, saying he wants to wait until Harmon’s audit is complete. In addition, he warned of additional tax revenue that won’t be available to the state in the decades to come.

“It costs the state an awful lot more in money over time. … It’s a huge subsidy,” he said.

In remarks on the House floor, Wayne and Rep. Mary Lou Marzian, D-Louisville, referenced U of L’s deal at the arena, which gives it an uneven share of some revenues, such as suite sales. The two lawmakers also mentioned the revelation, reported this month, that former President James Ramsey quietly brokered a deal to pay athletics director Tom Jurich an additional $6 million if he remains in his role for another 10 years.

Tax-increment financing earmarks a share of the yearly increase in sales, income and property tax revenue in a two-square-mile area downtown for arena debt. It has failed to meet original projections, causing arena officials to ask Metro government for a larger annual contribution and press U of L to renegotiate its lease.

The arena construction bonds were sold in 2008, shortly before the crisis in the world financial markets in the midst of the Great Recession.

Rep. Jerry Miller, R-Louisville, said that while the original projections for the TIF revenue were incorrect, he called the proposed changes to the arena authority’s finances a “a good faith effort by all parties to make right what happened right before the crash.”

“This deal is sound with these changes,” he said.

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