Herald-Leader Editorial

Rupp plan must avoid Yum's path

Downgraded bonds not a good example

November 22, 2013 

It's not every day we praise a public project that's moving slowly.

But in the case of plans for financing what Mayor Jim Gray calls the reinvention of Rupp Arena, slow is good.

We're moved to say this by yet another story about the financial woes of the KFC Yum Center down the road in Louisville.

Just last week, the bond rating agency Moody's downgraded $349 million in bonds on the arena, yet again, pushing them, as industry publication The Bond Buyer said, "farther into junk territory."

Moody's noted that the arena has limited reserves and a depleted maintenance fund, and it relies on "volatile" revenues from a tax increment financing district.

There have been actions to improve the arena's finances, including redrawing the TIF district and getting in new management. But that's not the picture that was projected when it opened three years ago.

Last year, the city of Louisville upped its contribution to the arena $3.3 million to a total of $9.8 million.

"Ours is not like theirs," said Frank Butler, the seasoned University of Kentucky administrator who is project manager for the Rupp redo.

Work is continuing on the financing plan for Rupp's reinvention, Butler said. A national firm is exploring interest in naming rights, luxury boxes and special fan clubs as it crunches the numbers for a financing plan.

Butler said it will be two to three months before that number crunching is ready for public inspection.

Take your time, crunch long and hard.

Gray's vision is exciting and inspiring, and if it becomes reality, it could be transformational.

But a mutli-hundred-million dollar public project based on wishful numbers will serve no one. "Junk" is not a term that will add value to Lexington's downtown.

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