Kentucky Senate changes Louisville arena bill; Fischer opposed - WDRB 41 Louisville News

Kentucky Senate changes Louisville arena bill; Fischer opposed

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LOUISVILLE, Ky. (WDRB) – The Louisville Arena Authority would get additional time to collect a key rebate of tax revenue used to pay off debt on the KFC Yum! Center under a bill headed to the Kentucky Senate.

But the revised version of House Bill 330, approved Tuesday by the Senate’s budget committee, makes significant changes that include a required $3.5 million annual payment toward arena debt by the University of Louisville. Metro Louisville would have to pay $10.8 million a year.

The bill also shortens the amount of time arena officials wanted a tax increment financing, or TIF, district near the arena to last, and it caps how much money the TIF can provide to the arena project. Any amount above a $315 million threshold would go to the state’s pension fund.

Budget panel chairman Chris McDaniel, R-Taylor Mill, said the committee substitute passed on a unanimous vote. The bill could be heard by the Senate on Wednesday -- one of three legislative days remaining in the 30-day session.

“The whole intent is to stabilize the Yum! Center, while at the same time mitigating the risk and exposure of the Commonwealth in allowing this thing to really thrive the way it should have originally,” McDaniel said in an interview.

The office of Mayor Greg Fischer, who appoints the arena authority along with Kentucky's governor, was not consulted about the changes to the original bill and opposes them, Fischer spokesman Chris Poynter said. U of L did not immediately comment.

In December, the Metro Council voted to give Fischer the ability to negotiate new terms for the city’s annual contribution, leaving open the possibility that Metro government could pay less than a maximum of $10.8 million a year.

Arena Authority Chairman Scott Cox said he's pleased the bill has passed the Senate committee and is hopeful that a final version is satisfactory.

The arena authority collects a portion of sales, property and other tax revenues generated in a two-mile area near the arena to help pay off debt. Other sources include an annual payment from Metro government and some arena revenues.

Because the TIF has fallen short of projections, arena officials expect they won’t be able to make a series of ascending debt payments as early as 2020. In order to avoid that scenario, the arena authority is hoping to refinance its overall debt at lower interest rates this year.

To do that, arena officials say they need changes in in 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 are seeking changes to the lease with U of L, the Yum! Center’s main tenant.

The revised version of House Bill 330 would keep the TIF in place for no longer than 38 years. It also sets a cap on TIF revenue, with U of L, the arena authority and the city responsible for repaying the state pension fund any proceeds greater than $315 million.

And it requires the arena authority to use any excess project revenue for debt payments every three years. If doing so “jeopardizes the project,” the arena authority must submit an alternative payment plan to the legislature’s Capital Projects and Bond Oversight Committee.

The committee, which includes McDaniel, would receive an annual report on the arena authority’s financial condition and the payments made by the city, U of L and the arena authority.

The bill also would require that if Louisville voters approve a local option sales tax – an approach favored by Fischer – those revenues would go towards arena debt.

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