Time Warner and WDRB/WMYO and KFC YUM CENTER JUNK STATUS

Louisville, KY -

Yesterday Moody’s downgraded the new KFC YUM! Center bonds to junk status. I hate to say I told you so but….I told you so.

As a candidate in the 2006 Mayoral election, one of the most serious discussions was the the new arena. There were two plans offered with the current location the most expensive. I argued that it was unaffordable, the TIF’s would not meet projections, and the citizens of Louisville would be on the hook for millions in subsidies accordingly.

I wasn’t that smart folks I just did the diligent research on how arenas have affected other communities and came to the right conclusion. John Schnatter and David Jones came to the same conclusion going so far as to commission a separate report outlining the advantages of a different location if we were going forward with the project anyway.

Unfortunately, this being Louisville, KY and the Democrats have never seen a project they couldn’t pilfer from, this project was not affordable and Moody’s is right in their assessment.

The Courier-Journal reported earlier this year that authority expected to have $6.7 million from the taxing district for its 2011 payment. Instead, the district produced only $2.1 million.

Arena officials have said surplus funds, including a maintenance reserve, could be tapped to cover any shortfalls.

These are serious concerns going forward with such a new facility. When projected revenues are off by at least 2/3, and you have to raid maintenance funds, it creates a serious situation and proves the plan was flawed from the beginning.

When you throw in the problems that were there throughout construction, the picture becomes even clearer.

This will get worse going forward folks pay attention to what it costs us.

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