Public and private sentiment about the proposed Rupp Arena Arts and Entertainment District has been on a roller coaster these last few months, roaring to highs when a futuristic design was showcased in January and sinking this month under confusion and disappointment as the Kentucky Senate — bothered by the University of Kentucky's silence and other uncertainties — passed on appropriating a critical $80 million for the project.
We continue to support Mayor Jim Gray's aspirational and inspirational vision to transform a blank box with acres of nearby parking into a vibrant urban center. Yet it is past time for a full public vetting of the financing of this complex and expensive project. Fortunately, the Urban County Council is preparing to do just that June 23 at 6 p.m.
Council members scheduled the meeting last week after they were asked to approve $40 million in bonds for the project. Noting that the city has put up most of the money to date, the council felt it was time to get a more complete view before the city antes up again.
So far, discussion has focused on the Rupp Arena portion of the project, and most of the information has come from the mayor's office and project manager Frank Butler. The council should expand the discussion and the sources.
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First, ask UK to participate. Its men's basketball program is the lead, and most visible, tenant at Rupp. The current lease expires at the end of 2017 and a key element in the financial plan is a proposed 30-year lease of the renovated arena for $10.7 million a year.
UK has not acknowledged this figure, there is not a signed contract and many details remain unresolved or undisclosed. In addition, plans call for UK to manage Team Rupp, the initiative to raise $35 million from UK fans for the project. UK Executive Vice President for Finance Eric Monday, or someone else directly involved in these negotiations, should be asked to appear and talk about the university's involvement.
Second, a closer look is in order for plans to spend just over $100 million to demolish the existing convention center, which wraps around Rupp, and build a new one nearby. The total cost also includes paying off $18 million in debt from the last renovation of the convention center in 2004.
Convention centers, as Butler explained, make little money themselves but attract visitors who spend money in town. It would also be closed for at least a year during construction, further cutting into revenue and hurting area businesses. This may be a worthwhile investment but a more complete explanation of the numbers and rationale behind it is in order.
In this regard, the council should ask that a representative of CSL, the consulting firm that developed projections for the convention center, attend the meeting, too.
A lot of the work on the Rupp reinvention has been nuts-and-bolts stuff comprehensible mostly to experts: studies, designs, contract negotiations, number crunching.
The state's being asked to contribute $80 million to this project and the city $40 million. Plus, the city would be on the hook if arena and convention center earnings fall short and don't meet the debt payments.
The time has come for all the key players in this project to appear before the council and explain in terms we can all understand where the money will come from and what this project can do for our community and our state.