More bad debt news for the KFC Yum Center

There is no doubt that the KFC Yum Center is one of the nation’s nicest arenas, but the riverfront facility in Louisville is struggling to make its debt payments, according to the Courier-Journal.

Marcus Green reports that a tax that was supposed to help pay for arena construction has generated less than one-third of the amount originally projected.

Arena officials have scraped together cash to deal with the shortfalls, nearly emptying a building renovation fund and notifying Louisville metro government that more city money may be needed as early as next spring.

The troubles have captured the attention of the bond market, with rating agency Standard & Poor’s lowering its confidence in the authority’s ability to repay the project’s debt to “negative” from “stable” over concerns about the sales tax revenue from the arena neighborhood.

City officials are hoping that economic growth will come to the rescue. That seems a risky bet given the economies in most cities these days.

It’s also a cautionary tale for Lexington, which has hopes of doing something grand and creative with Rupp Arena.

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Comments

  1. Fairness says:

    U of L hoops should NOT have that sweetheart deal they have. If the Cards were paying appropiate rate (equal to what any concert would pay) to rent the place what would that do to the deficit?

    Otherwise what you have is a large tax transfer from the citizens of Jefferson County to the university and its highest paid employees: Rick Pitino, Charlie Strong, Tom Jurich, etc.

  2. John Clay says:

    The KFC Yum Center needed a major, consistent tenant and really U of L was the only option.

  3. Mark Liptak says:

    The answer is pretty simple…can you say the “Louisville Kings?”

    Mark Liptak

  4. Fairness says:

    If U of L was the only major tenant available it should NOT have been built. When will cities learn that building sports arenas/stadiums with tax dollars is LUNACY. Paul Brown Stadium is depriving Cincinati of basic services. The new Marlins stadium is going to be a financial albatross around the neck of Miami for the next 30 years (at least).

    This is going to require massive subsidies from Jefferson County taxpayers. Wait until 10 years from now when they need more $ to upgrade the “outdated” facility.

    If UK wants a new arena (full disclosure: I’m a huge fan) they should build it without any taxpayer money. That would mean an on-campus arena but that would deprive Fayette Co. Gov. a nice little honey pot of jobs, perks and misc. spending accounts. City govt and the arena disctrict would freak out.

  5. FIGUREITOUT says:

    The issues is this, that the university of lousiville will end up owning this arena, thats how it was set up and its going to happen…. Duh to the people of louisville for allowing this to be built and allowing them to do this to the tax payers….