Arena Consultant's Report: Project Will Generate $1 Billion, Hundreds of Jobs Over 30 Years
FRANKFORT, Ky. – A sports and entertainment complex in downtown Louisville will generate more than $1 billion over 30 years and should create hundreds of new jobs in Kentucky, according to two new consultants’ reports given to Gov. Ernie Fletcher.
“The facts are clear – a sports and entertainment complex in downtown Louisville is a slam dunk for the entire commonwealth,” said Governor Fletcher. “An investment in this facility is an investment in the future economic prosperity of Kentucky, and these reports prove just that. It’s time to move forward with this project.”
The Leib Group was contracted to analyze the economic feasibility of the proposed arena complex. Their report shows the project will produce $1.1 billion in revenue over the life of the bonds – enough new money to cover the cost of the project and pay off all of the bonds.
A team of consultants comprised of GBBN Architects, 360 Architecture and Robert Pass and Associates report the cost of the arena structure itself will be $252 million, based on a first quarter 2010 completion date (inflation adjusted).
“The investment in a downtown Louisville arena is an economic catalyst for our community and our commonwealth,” said Louisville Mayor Jerry Abramson. “As our shared partnership in visionary projects like Slugger Field and Waterfront Park has proven, smart investments can pay big dividends in many ways. I applaud the governor’s leadership on this issue and his dedication to getting the facts – facts that will make believers out of those who have raised doubts.”
The Parking Authority of River City will pay for the cost of, and receive the revenue from, a 975-space parking garage that will be used by the arena, a proposed privately developed hotel and other downtown businesses and events. The cost of the garage will be approximately $26 million, including $4 million for the cost of the roof, which will be shared by the hotel developer.
In addition, the Metropolitan Sewer District will bond a floodwall. The debt will be paid for by the revenue generated from the arena complex. The floodwall will protect the arena, the parking garage, the LG&E site and the rest of that area. The cost of the floodwall will be $6 million.
“With all of the public and private money we’ve invested in downtown Louisville, we need to bring more people downtown and have them spend more money,” said Rep. Scott Brinkman (R-Louisville). “This project makes that happen. I wholeheartedly support the construction of a multi-purpose arena in downtown Louisville.”
“This is economic development for the entire state of Kentucky,” said Rep. Bob DeWeese (R) Louisville. “If we want to move this state forward, we can’t let this opportunity pass us by.”
“The business community is excited to see the arena project moving forward,” said Joe Reagan, president and CEO of Greater Louisville Inc., the Metro Chamber of Commerce. “The facility is a critical part of the future growth and prosperity of both Louisville and the commonwealth. The information outlined today thoroughly answers questions concerning the cost, revenue and economic impact of the project and makes a strong case for both public and private investment.”
An earlier environmental assessment of the site, performed by QK4, found that the proposed arena complex site contained no items of major concern. Expected levels of lead paint and asbestos and limited soil contamination was discovered. The QK4 report revealed nothing beyond what would be expected and substances detected were at levels of minimal concern. Any environmental mitigation costs will be borne by LG&E.
GBBN Architects, 360 Architecture, Robert Pass and Associates and the Leib Group have consulted on nearly 70 different sports and entertainment related projects valued at more than $3 billion. They have consulted with numerous NFL, NHL and MLB teams and an Olympic stadium.
The Louisville Arena Authority has been established as a 501(c)3 corporation, with 15 members being appointed – 10 by Governor Fletcher and five by Mayor Abramson. The new authority will have its first meeting at 10 a.m. January 30 at the Kentucky International Convention Center.
LOUISVILLE ARENA COMPLEX FACT SHEET
- 669,000 square feet
2,000 lower-level club seats
1,000 mezzanine club-level seats
350 loge seats
72 luxury suites
- Under the plan to build the project on a “design-build” basis, the costs would be capped; meaning bidders could not exceed the maximum cost of the project. Contractors would absorb those losses due to any cost overruns, and would also be given the opportunity share in any costs savings.
- The University of Louisville Men’s and Women’s Basketball teams will be the primary tenants.
- The arena will be managed by the Kentucky State Fair Board in order to eliminate competition with Freedom Hall.
- Plans also call for a privately developed hotel and two restaurants on the arena complex site. The entire cost of this aspect of the project is estimated at $70 million and will be paid for by a private developer.
- The hotel will be 250,000 square foot with a minimum of 475 rooms and 25 condominium units.
- The complex plan also calls for 15,000 square-feet of privately funded retail space.
- The proposed arena would be built at the LG&E Riverfront site, a location bordered by the Ohio River, 2nd Street, 3rd Street and Main Street. The site was originally recommended to the governor by the Louisville Arena Task Force in September 2005 following a 16-1 vote.
- The Louisville Arena Task Force and its working groups met 23 times and heard 75 presentations – not including one public hearing where 88 individuals and organizations voiced their opinions directly to the arena authority. The task force also set up a Web site, which included a feedback form and an unscientific Web poll. Nearly 540 individuals responded or voted on site preference.