Kentucky Kingdom bonds in limbo: Developer might pursue tax credits
Louisville metro government may not sell as much as $17.5 million in bonds toward financing the reopening of the Kentucky Kingdom amusement park, as Mayor Greg Fischer proposed in early May.
Instead, developer Ed Hart, whose investment group has been granted rights to try to reopen the park at the Kentucky Exposition Center that Six Flags abandoned in early 2010, may pursue state tourism tax credits as the crux of a government-incentive package to help finance the reopening, said Steve Rowland, Fischer's
chieffinancialofficer.
Hart didn't return calls seeking comment and his representatives declined to comment on any of the Kentucky Kingdom negotiations.
But, Rowland said, if the tourism
taxcredits are used, the procedures would require Hart's group to secure the debt, rather than having the city issue general-obligation bonds.
Rowland acknowledged that “we assume that Hart is pursuing other investment options” and, although time is growing short, expressed hope of still getting the park open next spring.
Tax credits, an incentive package that was used to help lure the Noah's Ark Encounter Park and numerous other projects to Kentucky, allow investors to forgo paying a negotiated amount of state sales taxes over an extended period, usually at least 10 years.
If the tax credits are used for Kentucky Kingdom, the city would guarantee some percentage of the debt, Rowland said. “There may not be any bonds,” he said. “Kentucky Kingdom (Hart) is identifying what financial structure it will use.”
The city would apparently negotiate what share of the debt it would guarantee and have to find a source for the money. “It's all still up in the air,” Rowland said.
Fischer proposed in May that the city's $17.5 million in general-obligation bonds for the park would be backed primarily by occupational taxes and parking fees generated by the park.
Under the proposal, the annual debt on the bond issue would be about $1.5 million over 20 years, with the tax proceeds and parking fees providing about $1 million a year toward the bond debt and the other $500,000 coming from the park's operating expenses. Fischer also wanted the city to get a 30 percent share of the net profits, if the park is ever sold. He additionally proposed that the city get 10 percent of any gross revenues generated by the park in excess of $20 million in any year.
Fischer acknowledged at the time that he had not fully discussed the proposal with Hart, and Hart apparently walked away from the arrangement because of the relatively heavy debt responsibility of the park operators.Hart didn't return phone calls, and his spokeswoman, Susan McNeese Lynch, declined to comment on the status of reopening the park.
Amanda Storment, Kentucky State Fair Board spokeswoman, referred questions to fair board President Harold Workman, but he didn't return several phone calls.
Gil Lawson, spokesman for the Kentucky Tourism Arts and Heritage Cabinet, said the Kentucky Kingdom group has not filed an application for the tourism tax credits. “I can't speculate on what might happen, if they were to apply,” he said.
Chris Poynter, a spokesman for Fischer, said the administration will “continue to work with the fair board to help craft a financing plan to get Kentucky Kingdom reopened as soon as possible.”
“We are still very hopeful that we can get it open next spring,” Poynter said.
Rowland said, “We have not heard anything that would lead us to believe that we cannot open the park next summer.” He said he believes “what's on the table” for Hart from the city is still basically consistent with what Fischer proposed in early May, adding that the city is waiting to hear from Hart.
Hart's initial intent was to get the park open with a couple of new rides and largely with city financial help in 2012, then seek additional help from the 2012 General Assembly to get a much expanded park operating in 2013. The optimum expansion of the park, including greatly enhanced water features, would cost about $50 million and make it a regional tourist attraction, Hart has said.
Hart has already invested more than $3 million in the park, some of which went to acquire land owned by Six Flags. Hart has said he is spending an additional $100,000 a month in maintaining and securing the park's facilities.
The park, when it was open, usually provided jobs for about 1,000 youths during the summer.
bleibt zu hoffen, dass der Stadtrat auch noch überzeugt werden kann, dann steht einer baldigen Wiedereröffnung nichts mehr im Wege