State

Tourism officials suspend $18 million incentive for Noah’s Ark site over property transfer

People walked to the entrance on the Ark Encounter’s opening day. The site near Williamstown features a full-size Noah's Ark, built according to the dimensions given in the Bible.
People walked to the entrance on the Ark Encounter’s opening day. The site near Williamstown features a full-size Noah's Ark, built according to the dimensions given in the Bible. cbertram@herald-leader.com

The Kentucky Tourism Arts and Heritage Cabinet has suspended an incentive agreement worth up to $18 million with a Noah’s Ark-themed attraction in Grant County because the park transferred its main property to a non-profit affiliate.

The July 18 cabinet letter to Ark Encounter attorney James Parsons said the ark park’s recent actions put it in breach of the agreement with the state to refund a portion of sales tax collected at the site, which opened last July with a large-scale replica of Noah’s Ark.

The Herald-Leader first reported that on June 28, Ark Encounter transferred a $48 million parcel of land to a non-profit entity, Crosswater Canyon, which is also affiliated with the Creation Museum in Petersburg.

Answers in Genesis, the group behind the Ark Encounter and the Creation Museum, disputed that the transfer of the property “created a default.”

But Genesis co-founder Mark Looy pledged Friday in his prepared statement to “comply with concerns that the Tourism Department may have related to the transfer.”

The letter from Tourism’s general counsel B. Leigh Powers said the ark had several violations of the state agreement, including a failure to tell the agency of any change in ownership or get prior written consent to transfer assets. In addition, the agreement stipulated that the tax incentive, approved by the Tourism Development Finance Authority, was made for Ark Encounter. Non-profits can qualify for the tax incentive, but in this case the agreement was with Ark Encounter, not its non-profit affiliate, Crosswater Canyon.

This raw footage is from the third floor of the Ark, a replica of Noah's Ark, that opened Thursday in Grant County. We were allowed in about 20 minutes before the first guests were let in.

The tourism letter also cites a statement on the Ark Encounter website that says: “The for-profit LLC structure also allows the Ark Encounter to be eligible for various economic development incentives that would not have been available with a non-profit structure.”

The letter asks Ark Encounter to comply with the existing agreement in 30 days, or request an extension in order to qualify again for the rebate. State officials said the sales tax rebate accrued before June 28 would depend on what the Ark does in response to the state’s concerns.

Parsons would not comment on the matter. Answers in Genesis did not provide details about what it would do to “comply” with the cabinet’s concerns.

The Freedom from Religion Foundation, which has protested the state and local incentives to Ark Encounter for several years, had also asked the state to rescind the tourism agreement.

“Ark Encounter and Crosswater Canyon must stop their dishonest shell game,” said Ed Hensley, a FFRF coordinator in Kentucky. “They cannot claim to be for-profit in order to get tax incentives and then claim to be non-profit in order to avoid taxes.”

Ark Encounter is also in a dispute with the city of Williamstown, which issued another tax incentive program. Ark officials are resisting a new safety assessment tax that would add 50 cents to every ticket sold in order to improve emergency services that respond to Ark calls.

Group protests the anniversary of the opening of the Ark Encounter park in Williamstown.

Linda Blackford: 859-231-1359, @lbblackford

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