The University of Kentucky men’s basketball team will remain at Rupp Arena until 2033 under a new 15-year lease signed Thursday.
The deal is expected to generate about $100 million over the life of the contract for Lexington Center Corp., which controls Rupp Arena and the attached convention center.
The agreement requires the university to pay Lexington Center Corp. a minimum of $1.9 million a year for 28 games or events, well above its current payment of nearly $1 million. In addition, the lease agreement says UK will pay $4.75 million annually for media rights in Rupp Arena, bringing the total annual payment to at least $6.6 million by 2020.
The current lease expires at the end of the 2017-2018 season.
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UK has played at Rupp Arena since the downtown Lexington arena opened in 1976.
Lexington Center has agreed to add four clubs and club spaces within the arena for UK’s use during games. The agency also agreed to switch the seating in the upper bowl from benches to chair-backed seats.
The new clubs and seats are part of a proposed renovation and expansion of the attached convention center. UK will pay Lexington Center the full $1.9 million once the four club areas are completed. It will only pay portions of the $1.9 million until the club areas are completed, likely by the end of the 2019-2020 season.
“Reaching an agreement keeping Rupp Arena home for Kentucky basketball for another 15 years is a milestone event for Lexington Center Corporation,” said Bill Owen, president and CEO of Lexington Center. “It is a compliment to the high level of event support provided by our facilities and its entire staff for the past 42 years. We are all looking forward to the next era of our partnership.”
The two groups had originally announced the deal and a letter of intent in December 2016.
The agreement also gives UK control of all souvenir sales during the games and allows UK to secure and market naming rights for the entire complex.
If those naming rights are sold, UK would pay Lexington Center an additional $750,000. Lexington Center officials have previously said Rupp Arena’s name will not change.
The jump in UK’s lease payments will help finance the expansion and renovation of the attached convention center, Lexington Center officials have said.
Craig Turner, president of the Lexington Center board, said officials think the total price tag for the renovation and expansion will be around $230 million. A final number will be released once construction bids are returned. That will likely be sometime in the spring, Turner said Thursday.
UK said the improvements to Rupp Arena will generate additional revenue for UK’s basketball program.
“We are excited that Rupp Arena will be the home of the Wildcats for another 15 years. It already has been the home of so much history and shared pride for our university and our community,” said UK Athletics Director Mitch Barnhart. “We are gratified by the commitment the Lexington Center has made to continuing to improve the fan experience through upgrades to technology and other amenities.”
Eric N. Monday, UK’s executive vice president for finance and administration, said the futures of UK and Lexington are inextricably linked.
“The signed agreement underscores not only our commitment to Rupp Arena for the next 15 years, but to a healthy and vibrant future for the city and community we call home,” he said.