LOUISVILLE, Ky. (WDRB) – The University of Louisville’s athletics board plans to vote Thursday morning on a new lease governing the school’s use of the KFC Yum! Center.

University officials and the Louisville Arena Authority have been hashing out a new agreement for months. Interim university President Greg Postel, who took over negotiations for U of L in May, previously pledged an additional $2.5 million a year for the arena agency, which has struggled to pay off construction debt and faces steep annual increases in debt payments in the years ahead.

The deal set to be ratified includes $2.42 million to be paid annually to the arena authority and an $80,000 annual credit, a source close to the negotiations said. The credit, the source said, is a result of the U of L women's volleyball team moving to a renovating campus building, opening up 15 to 20 dates per year.

In addition, according to the source, U of L plans to cede control of all dates in October -- when the men's basketball team typically holds exhibition games -- to arena officials. The Courier-Journal first reported that the October dates are part of the deal.

The annual payments are in addition to revenue the arena authority gets each year from U of L as part of a revenue-sharing deal. Most recently, U of L paid the arena board $1.36 million from October 2016 through April of this year.

The arena authority, appointed by Louisville’s mayor and Kentucky’s governor, sought a revised lease as part of sweeping changes to its finances that include a planned bond refinancing this year. Without those steps, officials have warned they may default on the bonds as early as 2020.

Wall Street analysts now consider the bonds to be below investment grade – commonly known as “junk” status.

Scott C. Cox, the arena authority chairman appointed last year by Kentucky Gov. Matt Bevin, has said the $2.5 million figure is a “bare minimum number” that investment bankers, the arena’s financial advisers and city and state officials believe could get the arena bonds an investment-grade rating and save as much as $60 million in total interest costs.

Cox, an attorney, has led negotiations for the arena authority.

In March, the General Assembly approved giving the arena board 25 more years to collect sales, property and other tax revenue from a tax increment financing, or TIF, district near the KFC Yum! Center.

The U of L athletic association meets at 8 a.m. Thursday to discuss the lease; the arena authority has scheduled a special 1:30 p.m. meeting to “approve” the amended lease, according to the meeting agenda.

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Reach reporter Marcus Green at 502-585-0825, mgreen@wdrb.com, on Twitter or on Facebook. Copyright 2017 WDRB News. All rights reserved.