Louisville arena TIF windfall fails to materialize for third straight year

And finally in today’s onslaught of holiday reporting, we have the news item that isn’t really news:

It was supposed to be a reliable way to help cover the cost of a new downtown arena: The building’s events would bring throngs of people downtown who would eat, drink and shop nearby. Their sales taxes would be captured to help pay for the KFC Yum! Center.

But the arena hasn’t added as much to tax revenues as expected during its first three years — producing less than one-third of the amount originally projected.

Yep, the KFC Yum! Center TIF district isn’t generating as much incremental tax revenue as expected — just as was the case 11 months ago, and a year and change before that. At least tax receipts are finally up from before the arena was built, but only slightly: a total of $6.4 million over the past three years, a drop in the bucket compared to the city’s $19 million in annual arena debt payments, let alone the $30 million a year that that will rise to in coming years.

The city is now expected to be asked to bail out the arena district as early as next spring. (The Louisville Courier-Journal also speculates that this could increase the pressure to lure an NBA franchise in order to add arena events, which would be a great idea if NBA franchises actually paid significant rent.) Meanwhile, arena authority financial adviser Alexander Rorke told the Courier-Journal that nobody should be hung up on the fact that the TIF was expected to bring in a ton of money and now needs a bailout: “With the feasibility study — that was all great for that time period for what people knew. But I think it’s important that we just realize that was then.” Yeah, that’s what they all say.

4 comments on “Louisville arena TIF windfall fails to materialize for third straight year

  1. And again I’ll mention that Goldman Sacs touted the arena as being a great success in a national ad campaign. I’m heartened to know that they’re involved with the Santa Clara stadium also!

  2. And after reading this can you even believe more cities want to build arena’s to lure teams INSANE!!!!!!!

  3. Looks like Neil has been busy. Well, that makes one of us.

    What cities need to understand is that this is the typical experience. If your city performed much different than what Louisville has experienced, that’s the exception to the rule.

    The only places this seems to have a chance of success is the very large cities. So, LA, NY, SF, Chicago… Your chances are better than, say, Louisville.

    It needs to be a top 10 market to have half a chance.

  4. I’m not surprised it’s a failure- any numbers Mr. Rorke used to support the project and get it through no doubt came from (wait for it)… Fantasy Island!.