Briefing at governor's mansion could revive Rupp financing, governor says
04/03/2014 04:18 PM
Gov. Steve Beshear said Thursday he’s making a full-court press for legislators to sign off on major components of financing for a $310 million renovation of the Lexington Center and Rupp Arena.
Beshear told reporters Thursday afternoon that he held a two-to-three hour briefing at the governor’s mansion Tuesday for several Senate Republicans, who have raised concerns about the stability and transparency of a financing plan for the project.
For instance, Lexington and the University of Kentucky have kept confidential their proposed lease agreement for a newly-renovated arena. That’s a major part of the financing.
The project, which officials hope to begin early next year, also is counting on $65 million in bonds covered by the state. But state money to make those bond payments wasn’t tagged specifically for that project, and, instead was shifted to the state’s rainy day fund in the $20 billion state budget lawmakers passed Monday.
In addition, Lexington has asked for the General Assembly’s permission to raise the city’s tax on hotel rooms to 8.5 percent from 6 percent. That would generate $3 million a year to help cover the project’s construction costs. But that bill has been stranded in the Senate, where Republican Senate President Robert Stivers said the GOP majority had no plans to move on it.
Beshear hinted that could change.
Beshear said lawmakers have time April 14 to attach the permission for Lexington to raise the tax to another measure awaiting approval.
Jodi Whitaker, spokeswoman for the Senate Republicans, confirmed that Senate President Robert Stivers and two other senators attended the briefing. She left open the possibility that Senate Republicans could revisit the hotel tax issue when the General Assembly reconvenes after the veto break for lawmakers’ final day of work on April 14.
“I’m sure they’ll have a conversation about that with the caucus,” Whitaker said.
In terms of an economic development project, Beshear called it a “no-brainer.” But he also said it has a fairness component to it. He referred to the $75 million in bonds the state put up for the Yum! Center that the University of Louisville basketball team plays home games.
“We’ve given the Louisville Cardinals a world-class facility to play in. And they deserve it,” Beshear said. “The Wildcats deserve the same thing.”
However, the Yum! Center’s financing has been a source of heartburn in Louisville, especially as it relied on tax increment financing to pay off part of the bonds. That financing mechanism banks on making payment with whatever new property and sales tax revenue flows into as a result of the development.
Gray, the Lexington mayor, told Pure Politics over the weekend that the Yum! Center’s problems with that is one of the reasons the Rupp project won’t rely on tax increment financing.
But the financing plan does count on getting at least $3 million from an increase in the tax the city places on hotel rooms — the measure that’s pending in the Senate.
University of Kentucky President Eli Capilouto said he won’t be lobbying lawmakers for that when they come back to Frankfort April 14:
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