Noah’s Ark theme park getting $1.8 million state tax rebate after first year

Ark Encounter exterior | Courtesy Lexington Herald-Leader

By Linda Blackford | Lexington Herald-Leader

Ark Encounter, the Grant County amusement park that features a replica of Noah’s Ark, will get a $1.8 million tax rebate from Kentucky this year as part of its 10-year tourism tax incentive agreement with the state.

Under the agreement, Kentucky must pay the theme park $1.8 million a year for 10 years as long as the attraction generates at least that much in sales taxes from tickets, food and rides each year. Ark Encounter, which opened in early July 2016, generated more than $2.28 million in sales taxes in its first year, according to the Kentucky Department of Revenue.

The revenue department did not include in that total sales taxes from Ark Encounter for the end of June and all of July. That’s because Ark Encounter transferred its property to a related nonprofit entity for $10 in the middle of a dispute with Williamstown city officials over a 50-cent-per-ticket safety tax the city imposed. After state officials suspended the tourism tax break because of the transfer, Ark officials transferred it back and then agreed to pay the safety tax.

In an editorial in the Grant County News, Ark co-founder Ken Ham said the new safety tax generated $70,000 for the city in July, which would equal about 140,000 visitors that month. Although Grant County and Williamstown gave the attraction a generous set of incentives, those agreements do not require Ark Encounter to report the number of visitors.

The state tax break, which is supervised by the Kentucky Tourism Development Finance Authority, allows tourist attractions to recoup up to 25 percent of construction costs. Ark Encounter’s construction costs were estimated to exceed $100 million, but tourism officials placed an $18 million cap on the tax break for the project.

“The Ark’s success has lowered the tax burden for all Kentuckians and has seen the creation of many new jobs in Northern Kentucky,” said Mark Looy, chief communications officer for the theme park. “Hotels and restaurants are booming and other tourist attractions are seeing an increase in attendance, all contributing to the state treasury and far offsetting the rebate being received.”

The tax break was initially approved in 2014 by Gov. Steve Beshear’s administration, but it was later canceled after state officials found out the park would hire only Christians. Bob Stewart, then secretary of the Tourism, Arts and Heritage Cabinet, said the U.S. Constitution prohibited the state from assisting a religious endeavor.

Ark Encounter officials sued the state in federal court, saying the state’s decision to withhold the tax break violated its free speech. In January 2016, U.S. District Judge Greg Van Tatenhove ruled the theme park was eligible to receive the tax incentive, which has neutral requirements that can be met by religious and secular groups alike. The Bevin administration declined to appeal the decision.