SUNDAY EDITION | Waterfront Park seeks added Louisville funding as state aid vanishes
Waterfront officials are seeking a 30 percent increase in city money for the coming year, raising Metro government's annual contribution to roughly $1.3 million.
LOUISVILLE, Ky. (WDRB) – The board that oversees Waterfront Park had voted to start charging visitors for parking when a group of prominent Louisville civic and business leaders intervened last fall.
By committing $255,000 of their own money a year for two years, the donors helped fill a shortfall in the park agency’s budget and allowed parking to remain free.
But their actions illustrated a new financial reality of the award-winning park that draws an estimated 2.2 million people a year: It is still trying to make up for the loss of state support, which vanished in 2014 and hasn’t returned.
Park officials point to added events and attractions – such as a giant Ferris wheel near the Big Four Bridge this spring -- and higher rental fees that have created new revenue. Budget documents show the park has more than tripled event and other revenue since the state funds went away.
Yet, at a time of increased scrutiny over park operations, other income sources are lagging. A riverfront restaurant building, for instance, remains vacant after Doc’s Cantina abruptly closed in October 2016, but park leaders claim talks are underway to bring in a new tenant.
As Louisville Mayor Greg Fischer prepares to unveil his annual budget later this month, kicking off weeks of hearings before the Metro Council, waterfront officials are seeking a 30 percent increase in city money for the coming year, raising Metro government's annual contribution to roughly $1.3 million.
“We are obligated from a fiscal responsibility point of view to continue to say to the Metro Council, ‘This is what is appropriate for the operation of the park,’” said David Karem, executive director of the Waterfront Development Corp.
It will be the first Metro government budget since the park’s board of directors agreed to levy $3 parking fees last summer – a move meant to provide a reliable revenue stream with no new state funds and city pledges remaining flat.
They backed off that plan after public outcry and opposition from Fischer, among others.
But the parking debate raised new questions about how best to operate the park, and it came after the Metro Council pulled $210,000 meant for the westward expansion of Waterfront Park and transferred it to the park for operations.
Since its creation in 1986 to oversee the revitalization of Louisville’s once-industrial riverfront, the Waterfront Development Corp. had relied on public funds – two-thirds from local government and one-third from the state. Indeed, Louisville’s mayor appoints nine board members, while six are named by Kentucky’s governor.
The legislature surprised waterfront officials by failing to include its contribution in 2014. Lawmakers returned the annual funding, about $420,000, in its next two-year budget in 2016, but Gov. Matt Bevin vetoed it.
There was no state funding in the two-year budget the governor put forth this year or the spending plan lawmakers approved. Bevin’s office did not respond to a request for comment.
Karem credited Scott Brinkman, Bevin’s executive cabinet secretary and a parks agency board member, with helping to secure a $376,000 state grant last year to replace lights on the Great Lawn, renovate playground areas and replace mowing equipment.
Even though the state funding has stopped, Karem said he is optimistic it may someday return.
“Hope springs eternal that we will always have an opportunity to get money back in,” Karem said.
State Sen. Morgan McGarvey, a Democrat from Louisville, said the state’s financial difficulties may explain why lawmakers haven’t set aside money for the park. But, like Karem, he believes those funds may someday return – especially because the park is an “economic generator” near hotels and other attractions.
“This is still a pinched budget, and things are tough,” McGarvey said. “And so this year it didn’t get it but it’s something we’ll still keep on the radar.”
New park revenue
Without the state dollars, the agency has maintained an annual budget of about $2.2 million by trimming expenses and trying to add new events and fees.
The fees charged to the Kentucky Derby Festival, which uses the park for its “Chow Wagons,” have doubled in recent years. Waterfront officials say the Ferris wheel operator paid $25,000 to use space by the Big Four Bridge this spring.
The park also has added “one-off” events such as a concert by country singer Chris Stapleton and the Red Bull-sponsored Flugtag in 2016, said Cordell Lawrence, the agency’s finance director.
“We get those periodic events to help fill in some of the gaps, but across the board we increased fees to all events,” he said.
Meanwhile, after negotiating a new contract with Louisville Public Media two years ago, the park agency’s revenue from the warm-weather “Waterfront Wednesday” concert series has climbed steadily, documents show. Last year, the park pulled in $175,000 from the concerts – up from $100,000 in 2014.
But the two biggest sources of park revenue have been the city’s direct aid and rent.
Metro government has been providing $987,000 annually in recent years. During the current fiscal year, that accounts for about 42 percent of park operations.
By comparison, the city directly funded about 70 percent of Louisville Metro Parks’ operations this year.
The waterfront agency should look at “all options for funding,” said Metro Council member Bill Hollander, a Democrat whose district abuts the park.
“We may need an increased Metro appropriation, particularly if we don’t get any money from the state,” he said, but added that it’s too early to say if his colleagues might support spending more money on park operations.
Metro Council member Angela Leet, a Republican who is running for Louisville mayor, said she doesn’t yet know if she favors a larger allocation for the waterfront agency. She said she looks forward to finding out more during budget hearings about the park’s revenues, such as how much it’s charging in rental fees.
“I do believe when we have a good asset we have to take care of the asset,” she said.
The park was expected to generate $360,000 in rental revenue during the fiscal year that ends in June from lease agreements, including with Joe’s Crab Shack. But that amount was down from $420,000 the year before, records show.
The waterfront agency once was able to count on rent and revenue-sharing deals with Joe’s and the now-vacant Doc’s Cantina each generating $150,000 a year, officials say. The annual rent alone from Doc’s Cantina is $102,000 per year.
While the restaurant no longer is open, its developers have committed to pay the full rent and are making some payments, Karem said. In all, about $53,000 is owed, according to park figures.
“We are getting revenue,” Karem said. “It is not what it’s supposed to be, but I do think it’s important to say there is some revenue coming in.”
He said his agency still is working with the restaurant’s developer, Falls City Hospitality Group, to bring in a group affiliated with Quaff On! Brewing Company of Nashville, Ind., but there is no timeframe for that to happen.
Through a spokeswoman, Chip Hamm of Falls City said there was nothing new to say about the project and declined to answer questions about when the money owed would be paid.
The donations to the park last fall came from an influential group that included, among others, Humana co-founder David Jones Sr., and his wife, Betty; developer Gill Holland and his wife, Augusta Brown Holland; and Waterfront Development Corp. board member and Thornton’s CEO Matt Thornton.
Karem said the waterfront agency typically raises $100,000 each year and earmarks that money towards capital projects such as new park furniture. But before the philanthropists stepped in, donations were a scant part of the operating budget -- $3,000 in the 2017 fiscal year and $2,500 each in 2015 and 2016, for example.
Meanwhile, there is a master plan – but no money yet in place – to embark on the fourth phase of the park’s growth: adding 22 acres to the west.
Karem said that would require three additional workers to maintain. “It will be 100 percent maintained by the Waterfront Development Corp.,” he added, “and so we will need additional resources.”
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