As Kentucky legislature nears end, Louisville arena bill 'not a - WDRB 41 Louisville News

As Kentucky legislature nears end, Louisville arena bill 'not a dead item'

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LOUISVILLE, Ky. (WDRB) – With four working days left in the Kentucky General Assembly, a bill that would aid the Louisville Arena Authority’s finances still has yet to receive a committee hearing.

But Sen. Chris McDaniel, chairman of the Senate budget committee, said there still is hope for the measure extending a tax-increment financing district near the KFC Yum! Center for 25 more years.

“It’s definitely not a dead item at this point, but we still have some issues to work through,” McDaniel said Friday.

Tax-increment financing, or TIF, sets aside a share of the annual increase in sales, income and property tax revenue in a two-square-mile area downtown for debt on the Yum! Center’s construction bonds. The arena authority has warned that it may not be able to make debt payments starting in 2020 without an overhaul of the board’s finances.

Arena officials are pushing for changes to state law allowing the TIF to stay in place for 45 years, up from the current 20-year period that expires in 2029. They also plan to renegotiate the lease with the arena’s main tenant, the University of Louisville, and refinance the overall debt at lower interest rates.

Among McDaniel’s biggest concerns is that while House Bill 330 extends the TIF – funneling tax revenue to the arena board and away from government coffers – it doesn’t restrict how much money could be diverted. The current cap is $265 million.

The measure, whose main sponsor is House Speaker Pro Tem David Osborne, R-Prospect, cleared the House of Representatives February 27 on a vote of 79 to 14.

“Right now as the bill is written, it really opens up almost an unlimited checkbook in terms of the TIF position of the Commonwealth,” said McDaniel, a Republican from Taylor Mill in northern Kentucky.

He said he also would like to see assurances from other parties in the arena deal. In December, Louisville’s Metro Council approved allowing Mayor Greg Fischer to negotiate new terms for the city’s financial contribution, which can be as high as $10.8 million in some years.  

If changes are made to the bill, McDaniel said it could receive a committee hearing as early as Tuesday.

Scott C. Cox, the arena authority’s chairman, said negotiations with U of L are “ongoing.”

Arena officials prefer not having a cap on the amount of TIF money that can be returned to the arena authority, Cox said. The board’s approach would be to use any excess revenue to retire other debt early.

“I think that everyone recognizes that we need to extend this TIF in order to right the arena’s finances,” Cox said.

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