Louisville ordinance proposes 30-year tax break for Churchill Downs

LOUISVILLE, Ky. (WDRB) -- City legislators will consider extending a unique and controversial deal that lets Churchill Downs avoid paying property taxes.

Metro government has held title to the racetrack and surrounding parcels since the early 2000s as part of a plan to help Churchill finance a series of improvements to the Central Avenue track.

Under that arrangement, the city technically owns the land and leases it back to Churchill until 2032. The Louisville-based racetrack and gambling company gets a reprieve on property taxes, although it does pay Jefferson County Public Schools an amount meant to equal the taxes it otherwise would get.

But with city approval once again needed for Churchill's new $920 million expansion plan, Metro leaders want to amend that earlier compact and make two major changes.

First, the city would retain ownership of the land for 30 more years, or until roughly 2055. Second, Churchill's "payment in lieu of taxes" would go to Metro government coffers and not JCPS, as it has since 2002.

The ordinance — sponsored by Council members Kevin Kramer, R-11, and Markus Winkler, D-17, was introduced Monday after it was negotiated between Louisville Mayor Craig Greenberg's administration and Churchill, Winkler said.

It says the Churchill project "will result in economic development and the creation of new job opportunities" in Louisville.

Officials with the mayor's office, JCPS and Churchill did not immediately comment.

In an interview, Winkler acknowledged that the track operator stands to continue its tax exemption at a time when the company is flourishing. Across all its business segments, Churchill Downs Inc. reported "record" financial results in 2024, including net revenue of $2.7 billion — up 11% from the year before.

But Winkler noted that the new deal seeks to help Churchill at a time when other homegrown companies like KFC and Papa John's have migrated their headquarters from Louisville.

"Making sure that we're bringing people here and attracting businesses is of the utmost importance," Winkler said. He called the projected payments to Metro government a "step in the direction" of reimbursing the city for its track-related public safety and other costs.

The measure is needed for Churchill to receive up to $1.2 billion in bond proceeds for new development projects planned for the iconic racetrack home to the Kentucky Derby. The city must approve the industrial revenue bonds, although it isn't responsible for paying off the debt.

The work includes rebuilding the Skye Terrance and adding a new five-story entertainment complex, along with permanent infield seating.

The "payments in lieu of taxes" to JCPS have increased in recent years after WDRB News found that the track had not been reassessed for tax purposes despite new additions and construction.

For more than a decade, former Jefferson County Property Valuation Administrator Tony Lindauer's office kept Churchill's value at $20 million as homeowners in all parts of Louisville faced increases in their assessments at least every four years to keep up with the real estate market.

Following WDRB's reporting, current PVA Colleen Younger corrected the mistake in 2019 by raising the track's assessment to $117 million — a move Churchill Downs officials said was unfair at the time.

Since 2019, the more realistic tax treatment of the racetrack has generated nearly $4 million of additional funding for Jefferson County Public Schools, according to school district records obtained by WDRB.

This story may be updated.

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