I have always believed that the lease “negotiated” by the Arena Authority and UL for the Yum Center was one of the biggest frauds perpetrated on the state’s taxpayers in some time. Well it turns out, I didn’t know the half of it. InsiderLouisville.com today reports that under the lease, UL can buy the arena if defaults on its bond. This means that after the Arena Authority negotiated one of the most ridiculous leases in all of history, one that essentially makes it impossible for the building to make money, the entity that causes the arena’s profitability problems can then take it over and own it outright. Astounding.
Let’s review for just a second the problems at the Yum Center. Because UL has rights of first refusal on all dates from November to March, the arena simply cannot attract a NBA team or draw many major concerts due to a lack of dates. That means the two most important ways for the arena to be profitable have been removed, simply so UL can have first choice on their basketball games. And UL is very clear about its intentions. Look at this quote from their spokesperson in the article:
Mark Hebert, U of L director of communications, said the clause was included to make certain the U of L mens’ basketball team wasn’t left without a place to play in a worst-case scenario, and to block a National Basketball Association team from coming to Louisville.
“We wanted a seat at the table in case of a worst case scenario of bankruptcy or foreclosure; to protect our lease in case of a change of ownership.” U of L officials didn’t want an NBA owner coming in and getting control of the arena, parking an NBA team there for five years while milking tax incentives, then moving on, Hebert said.
That means that UL is admitting publicly that it is trying to keep an NBA team from coming to the city, even though it would have a HUGE positive impact on the local economy. UL is admitting publicly that it not only wants no NBA team, it actively is attempting to keep them away. We knew that before, but now they are admitting it. So with no team able to come, the arena can’t be profitable. And the moment that happens…well then UL can step in and actually own an arena that was supposed to be taxpayer funded and owned. It is truly remarkable.
I encourage you to read the entire story, if nothing else, just to be outraged. We have long known the Arena Authority “negotiated” a terrible deal. And we have also long suspected that there were sneaky dealings to make this happen, due to the close relationship between Arena Authority members and the University of Louisville. But now we know the kicker…not only was the “negotiation” a total fraud, but when it blows up in the taxpayer’s collective faces, the only winner will be UL Athletics. Shameful.