City Strobe

May 23, 2007 at 11:27 pm

Arena alarm bells getting louder
The proposed new arena’s security alarm system has been set off. Can’t you hear it? It’s driving me crazy. I sure hope our Mayor for Life or the Metro Council turns it off so we can all sit back and quietly take stock of where we are and what we have to consider.

The alarm system was set off for a third time Monday when the Arena Authority voted to abandon plans to include a privately owned, 475-room luxury hotel as a part of the project. From day one, the hotel was supposed to anchor the retail-shopping portion of the complex — just as it does with Rupp Arena at the Lexington Civic Center — and to share a common lobby with the arena.

By granting a ground lease to the hotel developer, the Arena Authority expected to bring in more than $1 million a year to help defray the arena’s $252 million construction cost. In addition, the hotel was expected to generate around 200 new jobs, be an integral part of the new Tax Increment Financing district, and help draw conventions and other events to the arena.

But now that’s gone because the Arena Authority finally had to acknowledge what many of us have been saying all along: Downtown Louisville doesn’t need a new hotel. Existing hotel occupancy is running at around 55 percent. A hotel at the arena became even more unnecessary when the Museum Plaza developers announced that a new Westin Hotel would be a part of their complex a few blocks from the arena.

So with a hotel out of the equation, how is the arena financing plan affected? Not a bit, said Arena Authority vice-chairman Dal Ulmer. The Authority’s consultants, bless their little butt-kissing hearts, now are projecting that the loss of hotel revenue will be more than made up by extra revenue from events held at the arena.

Nevermind that, other than University of Louisville men’s basketball, nobody has a clue about where to find enough other events to fill the new arena another 95 times a year. The Arena Authority has assured the Metro Council — and the General Assembly — that it will be able to bring in a vague hodge-podge of concerts, conventions, NCAA championship events and “family shows” to generate the revenue necessary to make Host’s numbers work.

But before we go farther down this road to perdition, shouldn’t we at least be given a list of specific events that we know we can get and, more importantly, that we know will fill the arena to near its 22,000-seat capacity? Why hasn’t the Metro Council, the Mayor and The Courier-Journal asked Host to produce projections for that?
The alarm system was first set off a few weeks ago when the Arena Authority voted to hire an outside agency to sell the arena naming rights because chairman Host, super-salesman that he is, couldn’t do it himself. In pushing his complicated arena-financing scheme, of course, Host acted as if there would be so many competitors for naming rights that the Authority would have to use Louisville Sluggers to keep them away.
It didn’t work out that way.

The second alarm came when Host told the Metro Council that the Authority wanted to renegotiate that part of the funding plan that limited the city’s liability in case of operating losses. In other words, Host wanted the city to assume more of the burden in case his pie-in-the-sky figures proved to have the substance of cotton candy. This raised a red flag in the minds of Councilmen Jim King and Dan Johnson, among others.
That remains to be resolved.

Now there will be no hotel. Does that also mean there won’t be any retail shopping? How does all this impact the projected revenue from the new TIF district?

The unsettling thing is that, from day one, Host has used the Rupp Arena/Hyatt Regency/Lexington Civic Center project as his model. He was just as instrumental in that project as he has been in this one. Every year the Hyatt gives 6 percent of its gross revenue to the Civic Center board. But the director of the Civic Center has testified that even with that money, the Civic Center rarely comes close to breaking even, much less making a profit.

But even as we speak, LG&E and its parent company, E.ON U.S., are preparing to begin moving its power equipment 30 yards across the street in order to clear the arena site. The $63 million cost of the move will be picked up by the taxpayers, as will the $14.5 million cost of acquiring the property.
Our Mayor for Life and the Metro Council will ignore the alarms at their own risk. The prudent and responsible thing to do is put a stop on everything and call in the Arena Authority to explain the new deal, which, frankly, smells even worse than the old deal.

Once construction begins, it will be too late to turn back. And if, at some point, the Authority decides it can’t make ends meet without bringing an NBA team to town to fill up those dates, it will force U of L to renegotiate with the same Authority that gave it a sweetheart deal that, at the time, looked too good to be true. —Billy Reed (This piece originally appeared at

Putting the park back in Park Hill
Last week, Louisville scored a $1 million grant from the Environmental Protection Agency to begin cleanup and re-development of the Park Hill neighborhood just west of downtown. The area has long been home to industrial plants, many of which have dribbled petroleum into the soil for decades. Like most older, neglected neighborhoods, Park Hill has a rich history that includes the circa-1800s farming community known as the Cabbage Patch and the original Sts. Mary & Elizabeth Hospital, which catered to, among others, the numerous injured victims in the area’s early industrial plants. (The neighborhood inspired Louise Marshall’s bestselling children’s novel and subsequent movie “Mrs. Wiggs of the Cabbage Patch,” which includes this prescient rhyme: In the mud and scum of things/Something always, always sings!)

In the wake of the successful rehab of other near-downtown neighborhoods, the impending $4-gas price, and sprawl’s godforsaken O’Charleysification, Park Hill seems like a natural for inner-city revitalization. But how much cleanup can $1 million — roughly the amount a McMansion owner might spend to polish the palladium faucets in his 11 bathrooms — buy? Instead of funding actual cleanup, Louisville will use the money to establish a revolving loan fund to assess properties for environmental damage. These “brownfields” are being cleaned up nationwide and are the target of innovative environmental scientists and vulture capitalists alike, thanks to the conditions mentioned above. —Jim Welp

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