Wednesday July 26, 2006
Metro Government Approves Financing Agreement
Louisville’s riverfront arena is one step closer to reality following Louisville Metro Government’s approval of an agreement to pay for about 30 percent of the project’s cost.
The Louisville Metro Council last night ratified the memorandum of agreement that Mayor Jerry Abramson and Arena Authority Chairman Jim Host reached last Friday. The mayor will sign the council’s resolution and forward it to the Arena Authority.
“The time for arena dreaming and debating is over,” Abramson said. “It’s time to start building.”
The memorandum of agreement formalizes a funding commitment made last year by Abramson and supported by Metro Council members in the 2006 General Assembly. Gov. Ernie Fletcher led the effort to build a downtown Louisville arena and secured legislative approval for $75 million in state funds to begin construction.
“We are very pleased that perseverance and hard work has paid off, and now we can begin the work of building the arena,” Fletcher said. “It's a great day for Louisville and great day for the commonwealth.”
The Commonwealth of Kentucky, the Arena Authority and the business community are guaranteeing funding for 70 percent of the arena’s cost. Louisville Metro Government will provide 30 percent, an average of $10.3 million a year, from revenue generated from increased economic activity from the arena and downtown parking receipts. Louisville’s payments will begin in 2010 when the arena is expected to open.
Louisville’s funding commitment hit a snag two weeks ago when the Louisville Metro Council passed an agreement that included construction hiring restrictions, known as a project labor agreement, which drew opposition from the project’s funding partners. Those changes, made without consultation with and consensus of the funding partners, led Abramson to veto the council’s resolution last Tuesday.
Abramson developed a new arena financing plan, which does not include the project labor agreement but does incorporate other changes made by the council that were supported by the other financial partners including:
- Guaranteeing prevailing wage (market-rate pay) for each trade involved in the project;
- Establishing a goal of at least 20 percent minority participation and 5 percent women participation for employees and contractors;
- Providing opportunities for both union and non-union employees and contractors;
- Establishing a goal of 75 percent of arena construction jobs for Kentucky and Indiana residents, and a goal of at least 60 percent reserved for residents of the Louisville Metropolitan Statistical Area; and
- Giving unions and minorities a seat at the table by establishing a committee that will include representatives of the Louisville Urban League, the Justice Resource Center and labor unions “to represent minority and union contractors; to assist with recruitment of Project minorities and women; to assist in training those individuals thereby recruited; to provide verification and concurrent monitoring of the level of participation of minorities and women in the Project; and to monitor the payment of prevailing wages.”
Abramson thanked the Metro Council members for passing the revised agreement by a 23-1 vote and praised Council President Kevin Kramer for his leadership in securing the near-unanimous approval.
The mayor also thanked Fletcher, Host and the Louisville business community led by Greater Louisville Inc. for their resolve and patience.
“It’s time for us to look forward, not backward,” Abramson said. “And we certainly have a lot to look forward in the next few years here in Louisville, Kentucky.”