Kentucky Auditor Mike Harmon says overly rosy tax revenue projections for Louisville’s KFC Yum! Center have left taxpayers on the hook.
Harmon told lawmakers on the Capital Projects and Bond Oversight Committee the tax increment financing, or TIF, picture submitted at the outset of the Yum Center project hasn’t materialized as promised.
Under TIF agreements, a fraction of the sales and property taxes generated within a specific area are funneled back into the project. But the financial watchdog says Yum expectations were skewed by the inclusion of 16 years’ worth of sales tax data going back to a sales tax increase in 1990. Currently, three-fourths of the venue’s operating dollars come from either the TIF or a yearly Louisville Metro Government contribution to the tune of nearly $10 million, according to Louisville Business First.
The venue’s money woes coincide with a big revenue boost for the University of Louisville Athletic Association, which is in the process of negotiating a new lease deal with the center to host the school’s men’s and women’s basketball games.
The numbers prompted a sharp critique from Republican Sen. Chris McDaniel.
"You open an arena and the athletic association sees an annual increase of $15 million dollars in revenue. The taxpayers are being fleeced. Period," he told the panel.
The auditor declined to speculate on the intentions of the deal’s architects, but he is urging all those connected to the Yum Center to renew their commitments to the venue.
"I can't speak to the intentions of those that put it together originally," he said. "I know they definitely, obviously, wanted this arena built, but I can't speak to their intentions. We just know, based on our review of it, it does appear that it was flawed."
The Louisville Arena Authority is seeking $2.5 million more from U of L to support the venue.
