Louisville Mayor Greg Fischer has unveiled a plan under which the Kentucky Kingdom amusement park would reopen in 2012. It calls for the city to issue 17-and-a-half million dollars in bonds, and would bring in a third-party investor. The bonds would be backed by parking revenues, occupational taxes, and the new partner. Louisville businessman Ed Hart has an agreement with the Kentucky State Fair Board that would allow him to redevelop the park.
As Hart previously proposed, he would initially put up $7 million to reopen the park and more later for expansion.
City officials presented it today to Hart’s company and Fair Board President Harold Workman, who are studying it.
Fischer says it would be a safe investment by the city.
“I treat these deals as if it was my own money. So I would enter a deal like this personally. If we can’t meet that threshold with any investment that we make as a city, we shouldn’t do it,” he said.
The bond issue would be subject to Metro Council approval.
Budget Committee Vice-Chair Kelly Downard says he thinks the proposal “looks good.”
Details of the plan are below:
LOUISVILLE (May 4, 2011) – Mayor Greg Fischer today unveiled a plan that would reopen Kentucky Kingdom by issuing $17.5 million in city bonds backed by parking fees, a third-party investor and taxes collected from the jobs created at the amusement park.
The plan, presented this morning to Kentucky Kingdom investor Ed Hart and Kentucky State Fair Board President Harold Workman, would allow the park to open in 2012.
“It’s always been my goal to reopen Kentucky Kingdom because it’s a valuable tourist attraction and it will create jobs, but it needs to be a deal that is good for the city,” Fischer said.
The latest proposal involves much less risk to taxpayers than previous deals proposed by Hart, Fischer said, while at the same time providing an opportunity to re-open the park.
“The deal we have presented is fair to the city, to taxpayers and to Mr. Hart,” Fischer said.
The plan calls for the city to issue $17.5 million in general obligation bonds, pending Metro Council approval, with an annual debt payment of $1.5 million over 20 years.
The city would commit its portion of the occupational tax revenues collected at Kentucky Kingdom toward the bond payment, up to $1 million, and the park’s operators would commit parking fees generated by the park toward any difference between the taxes collected and the $1 million.
If the park generated $200,000 in occupational taxes its first year, for example, Kentucky Kingdom would contribute $800,000 from parking fees to close the gap.
The remaining $500,000 of the $1.5 million annual installment would be paid by a third-party investor with a financial interest in Kentucky Kingdom, said Steve Rowland, the city’s chief financial officer, who structured the deal with Fischer and a team of financial advisors.
“We have had discussions with several people and believe there are interested potential partners who want to see Kentucky Kingdom open and operating,” Rowland said.
The new deal also includes a provision that allows the city to share in profits if Kentucky Kingdom is ever sold. Metro Government would receive 30 percent of the net profits of any sale.