There’s some new data on how Louisville’s annual subsidies are propping up the KFC Yum! Center, courtesy of the Louisville Courier-Journal:
The report doesn’t explicitly show how the arena authority pulled together the money to make its two debt payments last year totaling more than $20 million. Some of the money included more than $3 million borrowed from a renovation fund and an increase in Metro Government’s annual contribution to $9.8 million, from $6.5 million.
According to the report, the authority had $26.2 million in operating revenues and other support last year, up from $24.9 million the year before. That is largely [the] result of the additional city money, which made up the biggest chunk of arena revenues.
For those without access to a calculator, that’s fully 37% of the arena’s revenues that came via a check from the city government. And that’s not including the kicked-back property and sales taxes that are costing the city about $2 million a year — which is on the one hand good considering that this tax increment financing was supposed to provide about triple that amount, but on the other hand not so good since the city has to pay the arena bonds regardless, hence the need for the growing operating subsidy.
There’s still hope that AEG, which took over operations of the arena last year, will somehow work some magic that will reduce the building’s losses, but given their work elsewhere, don’t hold your breath. It seems likeliest that Louisville will simply have to learn an expensive lesson: If you’re spending $349 million in taxpayer money on a new arena whose only anchor tenant is a college basketball team, you probably have no hope of ever making your money back. Also: When the vampire squid talks, don’t listen.