Ark park fails to make money for local shops
Shem’s Snack Shack sits about a mile away from the Ark Encounter on a road that turns into Williamstown’s Main Street. In case you missed the reference to Shem, Noah’s son, it’s also the “Home of the Ark Dog” — two-thirds of a Biblical cubit long — and has swirly blue linoleum floors meant to mimic the ocean and a camel mascot named Humphrey, who declares that the gourmet hot dogs are flooded with flavor.
The snack shack is owned by Charleston, W.Va., doctor Brian Plants, a longtime donor to the Answers in Genesis ministry of Australian Ken Ham, whose vision has brought the Creation Museum in Petersburg and Ark Encounter, which opened last July. Plants thought it would be a good idea to capitalize on the hordes of hungry tourists who would be descending on Williamstown after touring what’s touted as the world’s largest timber-frame building in the shape of a boat.
Plants’ partner, Matt Griffith, moved to Williamstown from West Virginia last September, when he opened the restaurant, and he readily admits that those hordes have not yet appeared. In fact, he closed it down for three months over the winter.
“No one really knows it’s here,” he said. “Signage is our biggest issue,” partly because the restaurant sits on one side of Interstate 75 and the Ark is on the other. “But I like to be optimistic. We’ve been here a year and it’s going to grow.”
Stormey Vanover is less hopeful.
She has operated Country Heart Crafts on Williamstown’s Main Street for the past nine years, sometimes with a profit, sometimes at a loss.
“We do get a few people from the Ark, but they don’t really know we’re here,” she said amid the Kentucky-made soaps, candles and ornaments featured in her store, which is surrounded by empty storefronts. “It’s just not impacting us the way we thought it would.”
It has been almost a year since Ark Encounter opened, promising a surge of economic development in the county of 24,000 people in return for generous state and local tax breaks.
Ark co-founder Mike Zovath said the attraction will attract its 1 millionth visitor by July, but there is no way to independently verify that number. He says all of Answers in Genesis, including the Creation Museum, will employ about 900 people this summer.
Locals do see cars and tour buses full of tourists eager to see the life-size wooden boat, filled with exhibits of young-Earth creationism, an animatronic Noah and friendly dinosaurs. What they don’t see is those tourists crossing over I-75 to drive the mile or two into downtown Williamstown to eat, drink and shop.
Main Street has been in decline since the 1970s, when I-75 replaced KY-25 as a major north-south artery that was filled with cars and people, locals say. The Ark was the first ray of hope the city had seen in years.
In his office at the old county courthouse, Grant County Judge-Executive Steve Wood has heard all the complaints. Dry Ridge, about five miles north on I-75, has seen an uptick in hotel and restaurant business, but Williamstown, which sits farther off the interstate, hasn’t appeared to share in the bounty.
Wood knows that tourism revenue is up based on hotel tax receipts, but as the anniversary of Ark Encounter approaches, he doesn’t think the benefits are yet outweighing what Grant County and the state gave away.
“It’s a really bad deal for taxpayers,” Wood said of the Ark Encounter’s agreements with the county and city, which were made before he took office last year. The biggest property tax break will be in place for 30 years. “It was a shock for me because I didn’t really know all the details. Maybe I should have.”
‘Give and take’
Answers in Genesis received a generous combination of state and local incentives, acknowledging in numerous documents that without them, the $100 million attraction would not be built in Grant County.
Former Gov. Steve Beshear’s administration awarded the project a sales tax rebate under the state’s Tourism Development Incentive Program for as much as $18 million over 10 years. It was later canceled after state officials found out that the attraction would require declarations of Christian faith from potential employees. Ark officials sued and won in federal court. Gov. Matt Bevin’s administration then reappproved the initial request.
The company will report its first-year sales to the Tourism Development Finance Authority in August, officials said.
The state also agreed to expand the I-75 interchange at costs that ranged between $9 million and $11 million. State transportation officials recently decided to rebuild the exit ramps at a cost of $2.4 million, making them wider so traffic doesn’t back up onto I-75. That project is scheduled to start this fall.
Grant County and Williamstown officials also offered a series of incentives, none of which have accountability measures, such as requiring the company to maintain a certain number of jobs.
▪ To help finance the project, the city of Williamstown issued $62 million in junk bonds, which means they aren’t guaranteed by either the city or Ark Encounter, but by the bond’s buyers.
▪ The city and county also created a tax increment financing district. The deal means Ark Encounter gets back 75 percent of the increase in property taxes within the TIF district, encompassed by the Ark’s 800 acres, for 30 years. The property started with an assessment of $1.3 million in 2011 but is now assessed at $55 million.
This fall, Mayor Rick Skinner said, the total city and county tax bill will be about $250,000. Williamstown and Grant County will keep roughly $63,000 of that bill, and the rest will be returned to Ark Encounter.
The tax break doesn’t affect property taxes paid to the county school district. Those taxes are expected to increase from $99,000 this year to $157,000 next year.
“In the past few years we have not had growth, so the Ark has been a benefit to us,” Grant County Superintendent Matt Morgan said.
▪ The Grant County Industrial Authority gave Ark Encounter $175,000 to help buy a property that Ark officials deemed too expensive, and it handed them an an additional 100 acres that the authority already held for $1.
▪ Williamstown levied a 2 percent payroll tax on all Ark employees but agreed to give the revenue back to Ark Encounter, which sits mostly within city boundaries.
The deals were negotiated by Williamstown Mayor Rick Skinner and Darrell Link, who was the county judge-executive at the time.
“I never thought it would add much to the revenue stream for the county or city,” said Link, who is now executive director of the Kentucky Council of Area Development Districts. “I know many people tried to tie those together. But I think it’s good for the county. I think lots of people are coming to see it.”
The first year of the Ark park has coincided with the near-bankruptcy of Grant County, troubles that stem from inefficiencies and overspending at the county jail. Wood and the fiscal court recently implemented a 2 percent payroll tax, which will infuse a much-needed $3 million into county coffers. That tax will drop to 1.5 percent in the second year and 1 percent in the third.
In addition, Williamstown just passed another tax, one that left Ark officials proclaiming themselves “blindsided.” The 50-cent tax on every ticket sold at Ark Encounter is earmarked to upgrade the city’s emergency services, which respond to any accidents or problems at the attraction. In addition to tours of the boat, there is now a zipline tour, a petting zoo and camel rides.
“At the end of the day, if something happens at the Ark, they’re going to call 911, and the city will be responsible,” Skinner said.
He remains both philosophical and diplomatic about Ark Encounter, even though he’s well aware of the city’s dismal business climate: He recently announced that his family business, Skinner Furniture, which has been open on Main Street since 1953, will close.
“The city is a business, and so is the Ark, and there’s been a lot of give and take,” he said.
He acknowledges that Williamstown lacks hotels and other infrastructure, so visitors go up the interstate to Dry Ridge and Florence, or south to Georgetown and Lexington.
“There hasn’t been any commercial development here,” Skinner said. “The smart money waits and the smart money is waiting to see if things hold.”
Another problem is a lack of signs that direct people from the Ark to Williamstown. A 1950s-era ordinance prohibits off-premise signs in city limits. The Ark has posted signs for some local businesses at its exit, including Country Heart Crafts and Shem’s, which has helped somewhat, Griffith said.
Jamie Baker counsels patience. The former publisher of the Grant County News is now the director of the Industrial Development Authority and Grant County Tourism.
“I think in the long term, it’s going to be great, but people are focused on the short term,” Baker said. “The area around King’s Island has become a mecca for sight-seeing, but it didn’t happen in a year. It’s going to take time.”
She said Grant Countians need a mind-shift, away from the small-business mentality of closing at 5 p.m. and more toward catering to tourists.
“If you close at 6 p.m. and the Ark closes at 8, how will you capitalize on that?” she asked. “It’s hard to criticize you’re not getting business when you don’t know what your business is. People’s expectations are somewhat skewed.”
Ed Clemons does know the business. He operates Edwardo’s, a pizza restaurant on a lonely stretch of Ky. 25 between Williamstown and Dry Ridge, but thanks to good reviews on Yelp, along with a karaoke machine, a covered patio and a full liquor license, he estimates that business is up about 20 percent.
“It’s been great for us. I would say we average three to five people a day from the Ark,” he said. “When they’re done with the Ark, they still want something to drink.”
But, he said, both Williamstown and Dry Ridge need more hotels — “more beds for all those heads.”
Dry Ridge Mayor Jim Wells said he’s working on two local TIF projects that will bring two more hotels and some restaurants.
The Ark “has been great for us,” Wells said.
Meanwhile, the tourist attraction continues to expand. Zovath said the second phase of Ark Encounter will begin this fall with the addition of a 2,500-seat auditorium. That will be followed with a Walled City retail space based on a Middle Eastern souk, or bazaar, that includes small restaurants. Plans also call for expanding the zoo, which has red kangaroos, ostriches and Tibetan yaks.
“The first year of operation has been excellent,” Zovath said. “The nationwide tour bus industry has fallen in love with the Ark/Creation Museum as a destination and we are experiencing large crowds daily. Families from every state in the country and most of the Canadian provinces have spent a day at the Ark so far.”
To capitalize on that success, “Williamstown simply needs more businesses that serve tourists,” said Mark Looy, Ark Encounter’s chief compliance officer.
But Bren Murphy, owner of the Gallery Coffee Shop on Main Street, said tourists like coffee and pastries just as much as anyone else. They just don’t get to her shop.
“The Ark’s growth is great for their success,” Murphy said. “But until we see some of that here, it’s really not done as well as we hoped.”