Beshear pushes legislators to fund Rupp project, saying 'Kentucky Wildcats deserve no less'

bmusgrave@herald-leader.comApril 2, 2014 

Gov. Steve Beshear is pressing the General Assembly to fully fund a redesign of Rupp Arena and an attached convention center when legislators return April 14.

Lawmakers left Frankfort on Monday after passing a two-year, $20.3 billion budget that included only $1.5 million for the $310 million Rupp project.

"The approval of this project is a question of both economics and fairness," Beshear said. "From an economic standpoint, Rupp Arena and the convention center will give a significant boost to the Lexington and Central Kentucky economy, just as the Yum Center is providing to Louisville and the surrounding region."

The General Assembly gave $75 million in state money for the KFC Yum Center, home of the University of Louisville men's basketball team. In addition, the General Assembly on Monday approved $56 million for a renovation of Louisville's downtown convention center, which is owned by the state.

"These were and are much-needed projects, and I am proud to have supported them," Beshear said. "But Lexington and the Kentucky Wildcats deserve no less."

Beshear had proposed and the Democratic-House approved $65 million for Rupp, home arena for the Wildcats.

But the Republican-led Senate did not include any money for Rupp in its budget. The $1.5 million for Rupp was a compromise hammered out between the two chambers after several days of budget negotiations.

Beshear confirmed Wednesday that he met Tuesday with House and Senate leaders, University of Kentucky and city officials to discuss the Rupp project.

The designs for the Rupp project — which includes updating Rupp and moving and expanding the current convention center — were unveiled on Feb. 10. But a financing plan has not been revealed.

During the legislative session, legislative leaders were shown copies of the financial plan but had to pledge not to reveal any details. Mayor Jim Gray has repeatedly said that UK did not want the tentative agreement between UK and Rupp publicly released until it was finalized.

But Beshear said Wednesday that the the financial plan will be made public soon.

"It is my understanding that the financial plan will be public in the next few days," Beshear said.

Jay Blanton, a spokesman for UK, said that an agreement has not yet been finalized.

"A lease agreement has not been signed," Blanton said. "It would not be appropriate to comment further."

Gray also declined to say when the financial plan will be released. "Hard work has gone into developing a detailed, conservative business plan, and we want the public to see it," Gray said. "It's consistent with our approach all along, to bring the people in and listen to their ideas."

As part of the compromise budget approved Monday, the city would have to release the financial plan and show legislative leaders a signed agreement between the UK and Rupp before they could get the $65 million for the project. The legislature set aside $6 million in the rainy-day fund for debt payments on the $65 million. Legislative leaders said the city could return as early as 2015 to get the additional money once the conditions were met.

Jodi Whitaker, a spokeswoman for Senate Republicans, said she could not say if they would change their position on Rupp when they return April 14 and 15, the last two days of the legislative session.

"Two members of Senate Majority leadership and one member of our caucus participated in yesterday's meeting, and for the first time, were given a complete briefing on the project with all interested parties in attendance," Whitaker said.

"The remainder of our caucus has not been briefed. I'm certain that we will discuss the project again when our members return from the veto break."

In addition to the $65 million in bond funding, also still pending before the Senate is a bill that would allow the city to increase the hotel and motel tax from 6 to 8.5 percent to generate an additional $3.5 million per year to pay off bonds for the project. The House passed House Bill 544 in March.

Gray has said that roughly 22 percent of the funding for a new Rupp Arena and convention center would come from the increase in the hotel and motel tax.

Senate leaders had questioned why the city wanted the state's support when it has had surpluses the past two years. They also were concerned that the hotel and motel tax bill was filed late in the session. Legislators also said that they heard much from Gray but little from other members of the community about the Rupp project. Some members of the Lexington hospitality industry were against the hotel and motel tax increase.

Gray has countered that the city can't pay for essential city services and also pay for the Rupp redesign. The hotel and motel tax bill was filed late because a tentative agreement between UK and Rupp was not reached until late February.

Legislative leaders are also hesitant about the Rupp redesign because of what happened with the KFC Yum Center. Opened in 2010, the Yum Center has failed to produce the revenue originally projected, leading credit agencies to downgrade its bonds.

Beshear called on UK fans to make the project a reality.

"If the Big Blue Nation wants Lexington and the Wildcats to be treated the same as Louisville and the Cardinals, then it's time for them to speak up."

Beth Musgrave: (859)231-3205. Twitter: @HLCityhall

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