Chairman says Arena Authority is on track to pay off KFC Yum! Center debts
The chairman of the Louisville Arena Authority assured Louisville Forum members the Authority is on track to paying its debts off for the KFC Yum! Center.
LOUISVILLE, Ky. (WDRB) – The chairman of the Louisville Arena Authority assured Louisville Forum members Wednesday that the Authority is on track to paying its debts off for the KFC Yum! Center.
According to the Authority’s financial statements, the arena was nearly $350 million in debt by the end of 2016, more than what was initially expected.
"Unfortunately, we're $35 million in the hole from what the initial projections were, even though this year for the very first time, we brought in $10.3 million," chairman Scott Cox said. "We were projected to bring in $14.6 million."
The luncheon provided Cox the opportunity to explain what the arena’s plans are and reassured everyone that there is no intention to ever default. The arena is in the process of refinancing its bonds. Scott said three things must happen in order to make that happen for the Yum! Center to be successful.
First, the state lawmakers granted the arena more time. The Arena Authority can now collect sales and property taxes for 35 more years from the TIF district, which includes businesses located near the arena. The hope is with more time to pay the debt back, the arena can get a lower interest rate. And that is expected to impact taxpayers’ pockets.
“By all accounts, it will save the taxpayers somewhere between $60 million to 80 million over the life of the bonds,” said Rep. David Osborne, (R) House District 29.
Second, this all hinges on finalizing the lease agreement with U of L. Cox said the bottom line is the arena needs $2.5 million more each from the university for 30 more basketball seasons.
“So that we can do two things,” Cox said. “Service the debt on these municipal bonds and also fully fund our capital account so we can keep the arena state of the art for the university.”
Finally, once the deal with U of L is complete, the Authority will finalize the city’s end of the bargain. The arena is asking for the max of $10.8 million every year for the next 30 years.
Ultimately, Cox and Osborne said local and state leaders are doing everything to pay the debt off, because the success of the Yum! Center reflects strongly on Louisville and the Commonwealth.
“The long-term viability of the arena is directly tied to the continued growth and vibrancy of downtown Louisville,” Osborne said.
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