UofL trustees and Louisville Arena Authority expected to approve agreement amending Yum! Center lease
The University of Louisville and the Louisville Arena Authority both are expected on Thursday to approve a much-debated lease agreement, which will amend the terms of the UofL Athletic Association’s lease as the primary tenant of the KFC Yum! Center that has been in place since 2010.
The current terms of the lease have been a source of controversy in recent years, as the arena authority has had great difficulty generating enough revenue to make payments on the Yum! Center construction bond debt, all while the revenue and profits of the UofL men’s basketball program have rocketed well past any other NCAA basketball program. Last year, authority chairman Scott C. Cox warned that the authority would default on its debt unless major reforms were implemented by key stakeholders, which included UofL athletics altering the terms of its lease to direct more revenue toward the authority.
As part of that effort led by Cox, the Kentucky General Assembly passed legislation in March to extend the life of the arena’s underperforming Tax Increment Financing (TIF) district by 25 years and lift the cap on tax revenue it could receive. The original version of the bill required UofL to pay an extra $3.5 million each year toward the arena’s debt payments, but that was stripped on the final day of the session after Gov. Matt Bevin’s chief of staff assured legislators that UofL had agreed to pay an extra $2.5 million.
As the following months dragged on without a lease agreement being formalized and negotiations broke down, legislators began to openly worry that they had either been misled into approving the TIF bill or that UofL was reneging on an agreement, while UofL athletics director Tom Jurich claimed that he never made a $2.5 million agreement with the governor’s office. However, in May the UofL board of trustees gave interim President Greg Postel the power to negotiate with the arena authority on the lease instead of the athletics department, and Wednesday’s announcement appears to indicate that both sides finally have come to an agreement.
At 8 a.m. on Thursday, the UofL Athletic Association board will hold a meeting in which the only agenda item is approving a Yum! Center lease agreement. The UofL board of trustees then meets at 1 p.m., with an identical agenda item on approving the lease. Later that afternoon, the Louisville Arena Authority board has scheduled an emergency teleconference meeting in which they can vote “to approve the First Amendment to the University of Louisville Lease Agreement.”
Asked for details on the lease agreement, UofL spokesman John Karman replied: “All I can say is we’ve reached an agreement, and it will be voted on tomorrow.” UofL athletics spokesman Kenny Klein he did not have “any additional information beyond the agenda that was posted.”
Cox told IL he agreed not to divulge any details about the lease agreement until the UofL boards could approve them.