State Auditor Calls For U of L To Pay More For Yum! Center
Kentucky Auditor Mike Harmon is calling for the University of Louisville’s athletics organization to put more money into the KFC Yum! Center arena, which is still struggling to pay off construction debts despite soaring revenues in the school’s athletic department.
During a legislative hearing Tuesday, Harmon repeatedly criticized the University of Louisville Athletic Association, saying taxpayers are paying too much for the arena where the school’s basketball teams play their home games.
“I think they’re obviously benefiting the most when 75 percent of the arena cash flow comes from taxpayers in some fashion — either the TIF or Louisville Metro,” Harmon said.
The Yum! Center opened in 2010 with construction financed on a $75 million appropriation from the state and ongoing infusions from the university, the city and a tax increment financing, or “TIF,” scheme that allows the organization to gather revenue from sales and property taxes gathered nearby.
The arena was on track to default on its debt service payments in 2020, but earlier this year the General Assembly extended the completion date of the TIF to 2054 from 2029.
The state is estimated to lose about $350 million in tax revenue over the course of the extension as a result of the deal.
Harmon accused architects of the Yum! Center deal of using flawed estimates of how much the authority would gather in TIF revenues, which have not lived up to expectations.
Sen. Chris McDaniel, chairman of the Senate budget committee, said Harmon’s analysis vindicated those who have questioned the deal.
“At the end of the day though, this remains an unmitigated fleecing of taxpayers in an outflow of funds unfairly to the University of Louisville Athletic Association,” said McDaniel, a Republican from Taylor Mill.
Harmon also criticized the University of Louisville Athletic Association for reaping the lion’s share of revenue from luxury seating licensing at the arena.
According to his presentation, the athletic arm of the school kept almost $5.9 million for suite licensing and passed on $200,000 to the authority. It gleaned $7 million in premium seating licensing and delivered almost $932,000 to the authority.
Rep. Jim Wayne, a Democrat from Louisville, called for an audit of the athletic association in the wake of a recent scathing audit of the University of Louisville Foundation.
“There’s a lot at the University of Louisville that has smelled during recent years,” Wayne said.
“And when you see what’s being uncovered right now in the University Louisville, we see that there is a lot of mismanagement, a lot of greed, a lot of deceit, a lot of lies. And who’s to say what’s been happening in the athletic association.”
Harmon said he hadn’t decided if an audit of the association would be appropriate, but he would discuss it with his staff.
A request for comment from the U of L Athletic Association wasn't immediately returned.