Fischer: Not 'realistic' to expect city can lower maximum KFC Yu - WDRB 41 Louisville News

Fischer: Not 'realistic' to expect city can lower maximum KFC Yum! Center payment

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LOUISVILLE, Ky. (WDRB) – Despite an apparent pledge by the University of Louisville to contribute more money for the KFC Yum! Center’s debt, Mayor Greg Fischer said it’s unlikely the city will end up lowering its maximum annual arena payment.

The Metro Council passed a resolution in December that authorizes Fischer to negotiate a new agreement between the city and the Louisville Arena Authority as part of the arena board’s plan to reorganize its finances. The council would have final approval.

The resolution gives the mayor the flexibility to lock in a new payment from Metro government, which now sets aside $9.8 million a year for arena debt. However, the city has agreed to pay up to $10.8 million annually over much of the next decade.

A new arena deal would be contingent on U of L paying more to the arena authority, the mayor- and governor-appointed board that oversees the Yum! Center’s finances. Gov. Matt Bevin’s administration says the university has agreed to pay $2.5 million more per year above its current contribution; U of L and arena authority officials have declined to comment on whether that figure is accurate.

Speaking to reporters on Tuesday, Fischer downplayed the possibility that a higher U of L contribution could lead to a lower payment from Metro government.

“I would like to think that we could lower the maximum (annual payment) of $10.8 (million), but I don’t think that’s really real realistic at this point in time when you take a look at what the bonding agencies are going to be requiring for this,” he said.

Fischer said the city’s contribution, which is budgeted each year, is the “the most relied upon payment of this kind of mix that comes together.”

Besides funds from the city and U of L, state property and sales taxes make up the bulk of the revenues the arena authority uses to pay off debt. Because a tax increment financing district near the arena has failed to meet expectations, the agency has warned it may not be able to make payments on more than $600 million in outstanding construction bonds by 2020.

The arena authority plans to refund its bonds this year, seeking better interest rates and more affordable annual payments. Earlier this month, Bevin signed into law a bill giving the arena board 25 more years to collect sales, property and other tax revenue from the tax increment financing, or TIF, district. The extension would last until 2054 at the latest.

The arena authority continues to negotiate with U of L on a new lease for the Yum! Center, chairman Scott C. Cox said last week. A university spokesman, John Karman, said in an email Tuesday that no agreement has been reached.

Fischer said that he expects it could take months for all of the new arena agreements to be finalized.

“It’s not days away or anything like that,” he said, “but certainly I hope it could be done in the next several months.”

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