- Associated Press - Wednesday, October 19, 2016

LOUISVILLE, Ky. (AP) - A legislative panel has asked State Auditor Mike Harmon to audit the Louisville Arena Authority, which oversees the KFC Yum! Center.

The General Assembly’s Capital Projects and Bond Oversight Committee requested the audit due to concerns about the facility’s finances, The Courier-Journal (https://cjky.it/2e5A30A) reported. The request won unanimous support from committee members Tuesday.

Sen. Julian Carroll, D-Frankfort, said he worries about the Yum! Center’s ability to cover its future debt payments.

“Our primary concern is the financial future of the Yum! Center, and within the next couple of years we’re going to have a financial crisis on our hands,” said Carroll, a committee member.

Scott Cox, the Arena Authority’s chairman, said the Yum! Center doesn’t have any immediate financial problems. There are some issues they’re addressing right now, but there’s no reason to panic, he said.

“The Yum! Center will never go under,” he said. “It will never be bankrupt. We will always service the debt.”

The authority will likely have new plans in place in a matter of weeks regarding how to strengthen the arena’s financial position, Cox said.

As for an audit, Cox said he’s “truly indifferent” about the idea. He expressed confidence in the Arena Authority’s transparency about its oversight of the Yum! Center and said they’re willing to work with the state if legislators think an audit is a good idea.

The authority’s board members are appointed by the governor and by Louisville’s mayor.

Sen. Chris McDaniel, R-Taylor Mill, said the arena’s arrangement with the University of Louisville, whose basketball teams play at the downtown arena, is another concern. The university’s athletics programs reap a “tremendous profit” from their partnership with the Yum! Center, he said, and it’s a deal that “ultimately might strangle” the arena itself.

Rep. Jim Wayne, D-Louisville, said the committee will approve a letter formally requesting an audit at an upcoming meeting that will then be sent to Harmon’s office.

Over $340 million in bonds were used to pay for the arena, and some of that debt is meant to be covered through a tax increment financing district that was redrawn after early returns were lower than expected. The bond payments are slated to increase over time and are expected to hit about $37 million in 2029.


Information from: The Courier-Journal, https://www.courier-journal.com

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