Issue January 25, 2006

What’s Wrong Here?

Nothing much that we can tell. Which means the Arena Authority has some ’splaining to do.

A small group of politicians, bureaucrats and power brokers — meeting mostly in secret — may be stampeding this community toward a hasty decision about a new multipurpose civic arena that could turn out to be one of the biggest disasters in Louisville history.

That’s my feeling after hearing that the estimated cost of building an arena at the so-called “LG&E site” has risen to a whopping $349 million (some analysts believe even that is low-balling it) and that we’re being asked to believe the project will pay for itself off only 113 dates for games and concerts and the like.

As Dick Vitale likes to yell, “Get a timeout, ba-bee!” I want some answers, and I want them now, before we go any farther down this slippery slope. I’ve had it with the smoke and mirrors. I want no more double talk and a lot more plain talk. Apparently some members of the Jefferson County legislative delegation agree. Last week they came out of their coma and said they want to take another look at the financial projections for the LG&E site compared with the “old Water Company site” on Third Street, and the third site still in play, the Kentucky State Fairgrounds on Crittenden Drive.

Good for them.

It’s way past time that some big-shot power insider is forced to step up to the podium and publicly explain exactly what makes the LG&E site such a magic location — one so vastly and inarguably superior to the other two that it will merit spending an extra $100 million or so. Let’s put all the cards — or, in this case, artist renderings and power-point presentations — on the table. Let’s get it out of a downtown lawyer’s office and into the light of day.

The last thing this community needs is another dastardly act of collusion between government, media and the private sector. Surely we haven’t forgotten the lessons of the airport-expansion scandal so soon, have we?

Before going farther, I want to be clear about my role in this endeavor that’s so important to the future of Louisville and the commonwealth. From the time Gov. Ernie Fletcher appointed the Arena Task Force in May until the time I left state government in late July, I was the Task Force spokesman because of my job as executive director of communications for the Commerce Cabinet.

I reported directly to then-Secretary Jim Host, who was vice-chairman of the Task Force and now is chairman of the recently appointed Louisville Arena Authority. (Why, by the way, did the governor get to appoint 10 members to the Authority and Mayor Jerry Abramson only five? Shouldn’t that be reversed?)

Host and I have been friends for more than 40 years. I greatly admire his intelligence, business acumen, work ethic and ability to charm, persuade and promote. I also believe him to be a man of integrity who sincerely wants to do the right thing for all concerned.

But like other charismatic leaders, Host has an overabundance of hubris. He becomes impatient with anybody who doesn’t see things his way. His unofficial mantra is: “Trust me. I know more about this than you do. Don’t make any waves and we’ll succeed.”

During the time I was involved with the Task Force — an absolutely first-class group of prominent political and civic leaders — I was confident that it complied fully with Gov. Fletcher’s demand that it be open and transparent. To my knowledge, all viewpoints and options were given serious consideration.

However, I also should point out that I did not participate in all of the meetings that Host had with community and business leaders, including those with some of the top brass at LG&E, which owns the site, and Humana, which owns buildings on the site.

And I have no knowledge of what has transpired since I left, except that transparency seems to be missing in action. It’s a common practice in state government for committee chairmen to do their business in small groups that fall just short of a quorum of the full committee. This lets them circumvent the Open Meetings law.

Therefore, many official public meetings — such as the one the Arena Authority is scheduled to have on Jan. 30 (10 a.m., Kentucky International Convention Center) — are generally little more than amateur theater productions. The roles have been assigned and rehearsed in private. It’s little more than a dog-and-pony show for the media and the public.

It will be interesting to see if any members of the Arena Authority assume the devil’s advocate role. On the Task Force, John Schnatter, the founder of Papa John’s Pizza, and Rep. Larry Clark (D-Okolona) were the only ones who publicly asked the tough questions. Schnatter did not like the answers he got, so he cast the lone dissenting vote against the LG&E site.

Agree with him or not, Schnatter served a valuable purpose in the process. Every government board or agency needs a devil’s advocate to keep the rubber-stampers honest and alert. Unsurprisingly, he was not appointed to the Arena Authority.

Although I’m almost six months removed from state government and back in the media, I still have enormous interest in the arena project because of my long history as a sports writer in Kentucky and, mainly, because I believe it’s a decision that will have a significant impact in determining whether Louisville will finally solve the identity crisis that has impeded its progress for decades.

On the outside looking in, the view is different. I’m troubled by the lack of transparency that has replaced the openness that characterized the Task Force in its early stages. I fear that the Arena Authority now is doing business like the late, great NBA Pursuit Team — behind closed doors, in other words, and without full disclosure to the public.

You will not find these kind of misgivings printed in The Courier-Journal, because publisher Ed Manassah is one of the power brokers pushing the LG&E site. You may recall that he favored bringing the NBA to Louisville. He also came up with the idea of building the arena at the LG&E site.

I’d urge Manassah to hold a press conference. Has he been participating in meetings with Host and/or the powers-that-be at Humana and LG&E? Any others? If so, what was discussed?

The C-J news staff has totally ignored the boss’s involvement, and the editorial staff is leading cheers for the LG& E site. (And, please, spare me the threadbare argument that the publisher has no influence on the editorial product. If you believe that, I will have a Nigerian lottery prize waiting in your e-mail box first thing tomorrow morning.)

Surely, considering the C-J’s oft-stated opposition to secrecy involving anything to do with the public’s business, Manassah should be in favor of transparency. Surely he would not want the C-J to be involved in another collusion debacle like the one involving airport expansion. Surely he’d be willing to release a list of the meetings he has attended or e-mails he has exchanged with Host, Humana, LG&E and others.

Not to be cynical, but does anybody besides me wonder if there’s any connection between the state’s support of the LG&E site and the state’s decision to award Humana a huge contract to oversee the state employee health program — a decision that has caused two competitors for the health program contract to file a complaint?

Exactly what will Humana and LG&E get for giving up the property for an arena. Is Humana one of the bidders for naming rights to the new arena? Is Gannett, parent company of the C-J? Why are the identities of those bidders being kept secret?

So far U of L has been relatively quiet on the subject, mainly because U of L President Jim Ramsey or athletics director Tom Jurich know it’s difficult to make the case, intellectually, that a downtown arena is better for their basketball programs, their students or their faculty than an on-campus arena.

To the contrary, playing in an arena downtown will be another step down the road to having a college team achieve full professional status, and it will be an even greater imposition on U of L students and ticket-holders than Freedom Hall is now.

Yet after opposing the movement to bring an NBA franchise to town, U of L needs to play nice with the downtown business community. It needs to show that it’s a “team player” and not an obstructionist. So it has agreed to be the primary tenant in an arena at the LG&E site, but not in one at the old Water Company site.

What’s that all about? What is it about the old Water Company site that U of L finds so objectionable? Doesn’t the Arena Authority — and the university’s supporters — have the right to know?

Host has been U of L’s No. 1 supporter throughout the process, mainly because of his long-standing business relationship with the NCAA, various conferences and many universities. To underline his commitment to U of L, Host says he recently blew off two NBA teams that contacted him about playing in the new arena. (However, taking a page from the NBA Pursuit Team playbook, he refused to identify them.)

Who gave him the authority to unilaterally deal with them? Shouldn’t he have invited them to appear before the Arena Authority?

Much as I’m opposed to an NBA team in Louisville, I also believe that no potential revenue stream can be ignored. Maybe an NBA team would be willing to help fund an on-campus arena for U of L in exchange for primary-tenant status in a downtown arena.

Finally, we need to know more about the revenue streams that Host ticked off in his impressive presentation to a joint meeting of the U of L Board of Trustees and Athletics Board. I may be dense, but I just can’t make them work — especially if there will be only 113 events a year in the new arena, the figure used by Host.

It’s my understanding that for an arena to even have a chance to break even, it must have at least 175 events a year. How can only 113 get the job done, especially when several of them — U of L women’s games, for example — will not bring large crowds into the proposed new tax district around the arena?

Ah, taxes. There will be more of them, and we need to know exactly what they will be. We know that a new taxing district will be established around the arena, which will mean surcharges for tickets, meals, parking, rental cars, hotel rooms and so on. That’s a new tax on the disposable income of anyone who spends money within the district. So when Mayor Abramson insists that the arena will be built without tax money, he must mean there will be no new payroll or property taxes.

But as a matter of conscience, the mayor also should demand that the Arena Authority provide affordable good seating for all arena events so that even the lowest-income taxpayers can enjoy it. If the new arena is to be a playpen for the corporate community and the East End elite, then it will do nothing to help bring the community together and promote diversity.

The mayor has preferred the old Water Company site from day one, and maybe he should have stuck to his guns instead of supporting — publicly, at least — the LG&E site. (During the question and answer period following his state of the city address at Downtown Rotary last week, the mayor essentially acknowledged that he favors the Water Company site but no one else does, and he’d much rather see it downtown than fight about the exact location.)

The rush to build the arena at the Main Street/LG&E site certainly has made strange bedfellows: The C-J, our Democratic mayor, our Republican administration, Humana, LG&E and heaven knows who else.

If any or all of these entities don’t voluntarily buy into the concept of full public disclosure right now, a legislative committee should conduct hearings as soon as possible in the current session. Unlike the meetings of government agencies and commissions, hearings can’t be choreographed in advance.

Oh, yeah. I have one more question. Where’s Papa John when we really need him?

Contact the writer at billyr@leoweekly.com