Renovating Rupp isn't only benefit to entertainment district, chairman says

bfortune@herald-leader.comMarch 23, 2012 

Rupp Arena gets the lion's share of attention when people talk about the economic impact of developing an entertainment district on the west side of downtown Lexington.

But enlarging the Lexington Convention Center also would produce a significant economic effect on the city, in both direct and indirect spending, Brent Rice told members of Commerce Lexington on Friday at a breakfast held on the floor of Rupp Arena.

Rice is chairman of the Arena, Arts and Entertainment District Task Force appointed about one year ago by Mayor Jim Gray to study the future of Rupp Arena and the convention center, plus the feasibility of developing an arts and entertainment district.

The task force made its final report in January. It recommended renovating Rupp, home court for the University of Kentucky men's basketball team; and razing and rebuilding the convention center.

Rice quoted from a study by Conventions, Sports & Leisure, an international planning firm specializing in convention, sports and entertainment industries. CSL recommended expanding exhibition space in Lexington Center from 66,000 square feet to 125,000 square feet, and increasing meeting space from 16,000 square feet to 32,000 square feet.

Rice said the report estimated the annual economic impact after a five-year stabilization period would be:

■ An additional 50 events.

■ A 21 percent increase in convention-visitor days.

■ Direct spending increase from $29 million to $37 million.

■ Overall economic growth in the community — including jobs and taxes — from $42 million to $54 million.

Shifting back to Rupp Arena, Rice on Friday identified a few potential naming rights and sponsorship opportunities, including a center court scoreboard, scoreboard advertising, a digital ribbon band around the interior of the arena and various categories of premium seating that altogether could produce more than $20 million in annual revenues.

"Remember that $1 million in revenue equals $10 million in bonding capacity," he said.

Naming rights would not include replacing the name "Rupp," Rice said.

On Thursday when speaking to the Blue Grass Hospitality Association, Rice said he did not see the name of Rupp Arena ever changing, though he acknowledged that was not his decision to make.

More likely, naming rights would be sold for the arts and entertainment district that includes Rupp Arena and the Lexington Center.

In Louisville, Yum Brands is paying $1.3 million annually for 10 years to have naming rights for the Yum Center.

He speculated that a corporation would pay $2 million a year to have its name on the Lexington district that includes Rupp.

"Who has the stronger brand? We do. It's not even close," Rice said.

At the Commerce Lexington breakfast, Rice said the city has to be creative in coming up with naming and sponsorship ideas. One such idea he pitched involved the 26 premium suites proposed for Rupp.

Rice said, "What if we take one suite, expand it to seat 50 people, then sell stock in that one suite similar to what the Green Bay Packers did when they sold shares for $250 each to expand Lambeau Field Stadium and raised $67 million?"

Selling shares in the Rupp suite could possibly raise as much as $100 million, he said. "That is equity, folks," he said. That means the one-time lump-cash sum could be used to pay down the estimated $250 million to $300 million cost of the project to renovate Rupp and build a new convention center.

An enticement to buy stock might be that every Sunday night there would be a lottery, Rice said, when the names of 25 stockholders would be drawn. Each name drawn would get two tickets to sit in the suite — and a parking pass — to whatever event was coming up that week.

Stan Harvey, whose firm Urban Collage was hired to provide staff support to the task force, said what comes next in this calendar year is to hire consultants to complete schematic drawings for the arena and civic center and finalize costs and sources of revenue. Site work, demolition and construction could begin as early as 2014.

Beverly Fortune: (859) 231-3251. Twitter: @BFortune2010

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