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Metro Newsroom


Majority Caucus raises concerns over arena financing ordinance

Thursday April 19, 2007

Louisville Metro Council
For More Information Contact:
Tony Hyatt: 574-4137/ 526-3622
For Immediate release:
 

In a letter to Louisville Arena Authority, the Majority Caucus of the Louisville Metro Council is expressing concern that the city’s commitment to finance the construction of a downtown arena be used for that purpose.

“The essence of our concern is the basic principle that Metro Louisville funds should be used only for construction of the arena and related debt service, not for its operation” said Majority Leader Jim King (D) 10 in a letter to Authority Chairman Jim Host.

The city’s existing agreement is to fund 30 percent of the arena’s construction cost. But wording in the proposed ordinance for the bond issue appeared to allow the Authority to deduct operating expenses first before the Authority commits to its’ obligations in debt service.

“Clearly, if the Metro’s money is to be used for arena operating expenses, Metro should govern the operations of the arena,” King said in the letter.

The City’s obligation is roughly $6,800,000 for its share of the debt service over 30 years. The city is also obligated to approximately as a contingency payment of $3,500,000 if the Authority’s revenues from all sources are inadequate to make a debt service payment in a particular year.

“If you deduct operating expenses before transferring the revenue to the (Bond) Trustee and there by creating a deficit in the Trust that triggers such a contingent payment,” said King.

The Caucus reviewed the situation at it Thursday meeting.

The Authority has agreed to review the document and make the necessary refinements in accordance with the original agreement.

Spsonor:
Jim King (D) 10
Judith Green (D) 1
Barbara Shanklin (D) 2
Mary C. Woolridge (D) 3
David Tandy (D) 4
Cheri Bryant Hamilton (D) 5
George Unseld (D) 6
Tom Owen (D) 8
Tina Ward-Pugh (D) 9
Rick Blackwell (D) 12
Vicki Aubrey Welch (D) 13
Bob Henderson (D) 14
Marianne Butler (D) 15
Dan Johnson (D) 21
Madonna Flood (D) 24