The final cost of a new downtown arena is going to be millions less than expected. That good news is making it easier to sell construction bonds as the Arena Authority tries again to raise the money needed to build.
Last month, the arena project was in jeopardy as the sale of bonds fell through the day before it was to be finalized. Thursday, there was new optimism construction money will be in the bank by the middle of next week.
Demolition of LG&E's old substation is progressing. Next door, debris from the imploded Humana Building has largely been removed. While the arena site will soon be cleared, construction can't start until money is raised to build.
Chairman Jim Host told Arena Authority members Thursday a new effort to sell construction bonds is underway and investors are more willing to buy this time around. "There are very few projects getting done around the country, and I think we've found a way to get it done."
Mortenson Construction, the contractor which will oversee the build, has guaranteed a maximum arena cost of just $227 million. That is a surprise since the first estimate in late 2005 was $25-million more -- before inflation, foreclosures, and other economic problems.
Authority Member Dan Ulmer explains, "The economy is, of course, unfortunately hurting people, but it's helped us. The bids are clearly better than we anticipated."
It turns out subcontractors hungry for new jobs have lowered arena costs by offering rock-bottom bids. A lower guaranteed arena cost is creating new interest in the construction bond offering.