A planned amusement park in Grant County featuring a life-size Noah's Ark is two years and millions of dollars behind schedule, but now it's getting more civic help: a $62 million bond issue being offered by the city of Williamstown.
The city, which has already granted the project a 75 percent break in property taxes over 30 years, won't have to repay the bonds, according to the bond-offering documents. That's good, experts say, because the bonds are not rated, which makes them speculative, or "junk" bonds, said Gene Gard of Dupree Mutual Funds in Lexington.
The taxable bonds are backed by future revenues from the project, which organizers believe will attract more than 1 million visitors in the first year.
The offering is not something that would be considered for purchase by a firm like Dupree, Gard said, because of the risk.
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"It might be people who are looking to allocate some money to a more speculative issue, or it might be people who would really like to see this project built," he said. "Or you could look at it almost as a loan to a family member and not be as concerned about being paid back."
If the park can't produce enough revenue, the people who buy the bonds will lose their money, but it shouldn't have any lasting effect on Williamstown.
"They're not on the hook for the bonds, so it wouldn't affect their actual credit rating," Gard said.
Mayor Rick Skinner did not return repeated calls for comment about the bond issue, but in past news reports he has been an enthusiastic supporter of the project which he believes will bring as many as 400 jobs to Grant County. Other city council members referred all requests for comment to Skinner.
While there appears to be little risk for Williamstown, there's more for investors. The preliminary bond offering documents for the Ark Encounter project list 39 risks for those who buy the bonds, from animals getting sick to possible lawsuits over the constitutionality of a religious project receiving federal and state money.
Still, Ark Encounter officials think the bonds will be a success.
"We are currently in the early days of the marketing period with respect to the bonds and are thus far pleased with the reception they have received in the market," said Mark Looy, chief communication officer for Answers in Genesis, the ministry based in Northern Kentucky that built the Creation Museum in Petersburg and is now building the Ark Encounter. Looy said the bond closing will be Dec. 19.
As an added inducement, anyone who buys $100,000 or more of the bonds will receive a lifetime boarding pass to the Ark Encounter, which includes free admission to the Ark Encounter and the Creation Museum, with discounts on food and merchandise.
Before the bond offer, the Ark Encounter had raised $14 million out of $73 million needed for the first phase of construction. The project's total cost has been estimated at about $150 million.
Fundraising has been slow because of the recession, said Mike Zovath, who is heading up the project for Answers In Genesis. Originally, the park was scheduled to be finished by 2014. Now organizers think they'll start construction in the spring.
"The recession has affected projects all over the country," Zovath said. "We've still raised close to $15 million in private donations."
Zovath said site work for the project is finished and the design work is 85 percent complete.
The 800-acre amusement park is supposed to feature a life-size Noah's Ark built by Amish craftsmen, a walled city, a zoo featuring Noah's animals, a Ten Plagues Ride, a Tower of Babel, a first-century village, an aviary and a children's area.
An initial feasibility report, written by Britt Beemer, a friend of Answers in Genesis founder Ken Ham, predicted the Ark Encounter would attract more than 1.2 million visitors in its first year. However, the bond offering documents note that "there is no assurance that the Borrower will be able to successfully market its themed attraction ... in numbers that provide significant, consistent cash flow."
Attendance at the Creation Museum has declined each year since it opened in 2007, from 394,185 that year to 236,583 in 2012, according to the bond documents.
The documents also note that state economic incentives for the project could be challenged by a group concerned about the separation of church and state. The state of Kentucky has promised up to $43 million in tourism tax credits. That agreement requires the park to begin generating revenue from sales in 2014. If that doesn't happen, Answers in Genesis would have to reapply for the incentive and produce a new feasibility report.
The state also agreed to an $11 million interchange upgrade at the KY-36 Williamstown exit off I-75; about $200,000 has been spent on design so far, according to Transportation Department officials.
The city of Williamstown agreed to give the project a property tax discount of 75 percent over the next 30 years, and the Grant County Industrial Development Authority gave them almost $200,000 to keep the project located there, along with 100 acres of reduced-price land.
Alex Luchenitser, legal counsel for in Washington, D.C., said his group has been following the Ark Encounter project closely, but has not made any legal moves because it's not clear the project will happen.
"We're not interested in filing a lawsuit where you might not need one in the first place," he said. "But we think it raises serious constitutional issues, both on the federal church-state requirement and under the Kentucky Constitution," which has language prohibiting government aid to religious institutions.
That government aid troubles others as well.
Dan Phelps, president of the Kentucky Paleontological Society, said he first became interested in the Ark Encounter project because he was concerned about the science that would be presented.
"The government has supposedly been trying to improve Kentucky's image and education level, but at the same time they're supporting a project that says all of modern science is a big lie," he said. "They claim that Noah led dinosaurs on the Ark, but that's just nonsense, there's no other way to describe it."
In a radio ad posted on YouTube titled "What Really Happened to the Dinosaurs?" Ken Ham disputes the fossil record of dinosaurs.
"Evolution has used dinosaurs more than almost anything else to indoctrinate children into millions of years of evolutionary ideas," Ham says. "But the Bible gives a different history. God tells us he created all land animals the same day he created man about 6,000 years ago and what's more there were even dinosaurs on Noah's Ark because God told Noah to take pairs of every kind of land animal. You see, dinosaurs are no mystery at all if you accept the Bible's account of creation."