As noted briefly last month, Louisville is in the process of refinancing its debt on the KFC Yum! Center, which has been hemorrhaging city money since it was built for the University of Louisville in 2010. Now the numbers are in on how much the city will save in annual debt payments, and it turns out it’ll be paying … wait, more?
Even after refinancing a burdensome debt load, the Louisville Arena Authority would pay more per year to retire new bonds for the KFC Yum! Center than under its current plan, according to a WDRB News analysis of documents made public last week.
Arena officials would be on the hook for annual payments averaging $29.3 million through 2045, compared with $25.8 million under current obligations that end in 2042.
What’s actually going on here is simple: In exchange for lots of big payments soon, Louisville has pushed back a bunch of its payments to 2030 and later, by which time surely that whole “wait for tax receipts from new development around the arena to soar” plan will be working out great! Or, at the very least, the people currently running Louisville will be long since retired. It’s a win-win!
(Tl;dr version: Tax increment financing is for suckers.)
I wonder how the economics differ for a modern arena built primarily for a pro team vs a modern arena built for a college team (although a very professional one). I would guess with fewer home dates, and a younger, less wealthy audience, there’s going to be less spending per cap. If they’re anything like I was, the college kids will get their buzz on before the game, then again at a party after the game. Spending very little at the venue, or the flood of new developments theoretically sprouting up around it.
If someone was to look at the best case scenario for a stadium situation where public money is involved, it would have to involve a setup where the stadium is used in major revenue generating events for (as a guess) 200 days per year, but I think the best two examples of this (Staples in LA and formerly titled Verizon in DC) were both privately financed. With two NBA teams (41 regular season games each or 41 and 15 with Georgetown in DC) and an NHL team (41 regular season games) plus concerts and the odd college tournament weekend, it is possible the city wouldn’t take a complete bath on the deal. Louisville built a stadium for about 15 men’s college basketball games per year. The women also play there, but to lower revenue. It has five events on its calendar for September. If you don’t include the Kentuckiana job fair (a worthy event I’m sure, but not one that will help pay down the debt on the building), it has four in October. A mostly empty building is really an awful setup for paying for a stadium.
And they left the state owned Freedom Hall standing. So they still compete for dates. Yep, this is not going to end well. Unless maybe National Indoor Lacrosse takes the world by storm and expands in a huge way.
Won’t the need a new arena before 2030? I’m more inclined to think they will than they won’t.
How many years since KFC made you say “Yum”? We gave up on them a few years back when honey and butter both got replaced by some horrific all-chemical concoctions.
They made me say “Yum!” right here in this post, but incorporating it into their company name! (The mandatory exclamation point is my favorite bit.)
Now, Seattle’s arena situation is just getting bizarre.
BREAKING: Potential gamechanger in arena battle with new KeyArena proposal from Hansen’s SODO group
http://q13fox.com/2017/09/07/breaking-potential-gamechanger-in-arena-battle-with-new-keyarena-proposal-from-hansens-sodo-group/
And, the Mayor of Seattle seems to have completely ignored Hansen’s proposal.
STATEMENT RE: KeyArena Proposal from SODO Arena Group
http://bottomline.seattle.gov/2017/09/07/statement-re-keyarena-proposal-from-sodo-arena-group/