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Councilman Johnson asks Mayor for thorough review of Arena Authority's agreement with U of L

Wednesday May 9, 2007

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

In a letter to Mayor Jerry Abramson, Councilman Dan Johnson (D) 21 is encouraging a thorough review of all agreements the Louisville Arena Authority is involved with including one for the University of Louisville.

“Mayor, we are too far along on this project to let it fall apart, but we are not too far along to take corrective action on language and agreements that could negatively affect this city for decades,” Johnson says in the letter.

He is asking the Mayor to step in and address some concerns that U of L has too much control over the arena to make it profitable and the city may end up spending more tax dollars because it will be harder to book a wider variety of shows and events.

Johnson is concerned the present arrangement the Authority is working on with U of L would limit any chance of a pro sport team becoming interested in Louisville as a home.

“Young people in this community have been clamoring for entertainment options that go beyond bars and night clubs,” said the letter. “Professional sports should be one of those options.”

Johnson, who has advocated a downtown arena for more than 10 years, says arenas are more successful if a pro sports team is anchored there.

The letter calls for a review of how the agreement is structured with the Kentucky Fair and Exposition Center and the University of Louisville. Johnson is concerned that the University has too much control of booking dates for the Men’s and Women’s Basketball team. He is also raising concerns that the University has too much control over luxury suites in the new facility.

“If a pro team and U of L both play in the arena that books the arena for about 85 nights and attracts 1.4 million people downtown,” said Johnson in the letter. “This gives not only the arena but surrounding businesses a much better chance of success.”

Recently, there have been indications the Arena Authority would like for Metro Government to be responsible for more risk in guaranteeing the construction bonds. No formal version of the ordinance has been introduced.

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.

The language may change asking the city to be responsible for covering a portion of operating expenses although the Authority has indicated that will not happen.

The Metro Council Budget Committee will review any ordinance before final approval.

“As long as there are legitimate issues I will continue to raise them, “said Johnson. “ I call on you as the leader of this Metro Government to make sure that all agreements receive due diligence and are worded in a fashion that allows us to grow as a community, not crumble under the weight of a bad deal.”

Sponsor:
Dan Johnson (D) 21