Louisville waterfront arena
Encyclopedia
The KFC Yum! Center is a US $
238 million, 22,000-seat basketball and multipurpose arena that opened on October 10, 2010, on the Ohio River
waterfront in Louisville, Kentucky
, United States, on Main Street between Second and Third Streets. The project is part of a $450 million project that includes a 975-car parking structure and floodwall. On April 19, 2010, it was announced that Yum! Brands
would pay US $13.5 million for the naming rights and would sell the products of three of its chains—KFC
, Pizza Hut
, and Taco Bell
—in seven concession stands within the arena.
The University of Louisville
men's and women's basketball teams are the primary tenants of the arena complex. The U of L women's volleyball team began using the arena as a part-time home in 2011. It is the fifth largest college basketball arena in the nation and includes an integrated scoring and video display system, which includes large LED video displays within the seating bowl, professional grade LCD screens and a powerful control system, all provided by Daktronics
of Brookings, South Dakota
. The arena's current attendance record is 22,803, set against Kentucky on Dec. 31, 2010.
bounded by Liberty Street, Muhammad Ali Blvd, Second and Third Streets, and one owned by Louisville Gas & Electric
(LG&E) on the waterfront between Second and Third Streets on Main. In March 2006, University of Louisville
men's basketball
coach Rick Pitino
stated he would not coach in an arena built at the water company site. This came at a time when the House budget committee earmarked funding for the arena only if it was built at the water company site. Others, including Papa John's Pizza
founder John Schnatter
, a major donor to the U of L athletic program, criticized the LG&E location due to its higher cost.
On March 10, 2006, Kentucky Governor
Ernie Fletcher
announced at a Louisville Arena Unity Rally that the location of the new arena would be at the LG&E site along the riverfront to maximize profits. The unexpected visit was supported by Louisville Mayor Jerry Abramson.
One month later on April 23, 2007, the Louisville Arena Authority released the design for the interior. The number of seats increased from the original 19,000 to 22,000; it would be divided up between 11,348 seats in the lower bowl, with the remainder on the upper tier. The seat width also increased from 19 to 20 inches. Also included in the release was a proposed sports bar that would be located on the main concourse; it would be open year-round and have views of the Ohio River. The number of suites would increase to 72 that would be located on two levels between the main and upper concourses; they would be twice as large as those in Freedom Hall
. A public plaza and concourse along Main Street was also revealed.
Prior to the release of the design, an arena report urged the facility to incorporate energy-saving elements into the construction. Other recommendations included the avoidance of large, blank walls, the inclusion of public art, and the provision of year-round uses inside the building.
On May 21, 2007, the Louisville Arena Authority voted unanimously to remove a hotel from the arena project. The 425-room hotel, which was envisioned as one way to pay off the project, was deleted because other revenues to cover the $252 million construction cost were projected to be higher than expected. The hotel would have also taken land away from a public plaza along Main Street. The Greater Louisville Hotel and Lodging Association also supported the measure, stating that downtown Louisville had enough projected rooms. The arena hotel and a planned Westin Hotel
at Louisville Museum Plaza
would have added 675 rooms by 2010.
The hotel was expected to contribute $1.3 million in annual lease payments, but other sources of revenue will sufficiently cover the $573 million in total debt over 30 years on a $339 million bond issue for the arena. Originally, the Kentucky Finance Cabinet projected $211 million in new tax revenues in 2005. A more recent and compressive survey was completed recently and the projected revenue increased to $265 million. The other sources of revenue to cover the deletion of the hotel include,
The removal of the hotel would allow for a wider Main Street plaza and would allow for new features, such as a Washington Street entrance. It would also allow for more design flexibility and would lend itself to host after-hour concerts and other events on the plaza.
game during the first 30 years of the arena's operation. The arena would spend just under $9 million a year, generating an annual profit of $196,000.
Another reason for the revised operating expenses is the reimbursement fee that the Louisville Arena Authority must pay to the Kentucky State Fair Board for the arena's impact on Freedom Hall
. The decrease in revenues, from $1.3 million to $738,000 during the first 10 years of operations of the new arena, is the result of a revision taking into account fewer events for the center.
On May 28, 2007, it was announced that the Louisville Metro Council
will propose an arena-financing deal that would save city taxpayers $3.4 million/year, or $100 million over three decades. The proposal, required the arena officials to exhaust other revenue sources, such as naming rights and luxury suite sales, before asking the metro government to pay more than its minimum pledge. The minimum pledge is $206 million towards the construction of the arena in annual installments between 2010 and 2039. Under the deal, the Louisville Arena Authority can ask the local government for up to $3.5 million more a year to cover the debt only if at least five other sources are drained. If the Louisville Arena Authority has to use additional city funds for two straight years, the Louisville Metro Council has the right to audit the arena's revenues.
The financing agreement allowed $339 million in bonds through the state of Kentucky's Economic Development Finance Authority to be issued to construct the $252 million arena. The total debt on the bonds, $573 million over 30 years, will be paid through several sources. These include the city's $206 million commitment, $265 million from a tax-increment financing district, $179 million from advertising rights inside the arena, $63 million from luxury box sales, and at least $37 million in arena naming rights. The tax-increment financing district will allow part of the anticipated growth in state taxes to help pay for the arena. The arena's share of that revenue is capped at $265 million, although the project will be able to use the excess revenues to pay down the debt. It is expected to generate $574 million over 20 years.
In September 2008, financing was completed for the new waterfront arena.
. The previous substation, located on the block of River Road, Main, Second and Third Streets, was relocated across the street at Third and River Road. The new substation, projected to cost $63 million, was completed in October 2008, at which time the land that housed the old substation was transferred to the Louisville Arena Authority for construction of the new arena. Work started on the new arena in November 2008. The complex was officially completed on October 10, 2010.
In June 2010, Gov. Steve Beshear and Mayor Jerry Abramson announced a new $3 million streetscape improvement project directly underneath the Clark Memorial Bridge, a three-block area from Main Street to River Road, which will be transformed into a plaza. This includes a new decorative lighting system under the refurbished Clark Memorial Bridge, wide sidewalks, seats, new pedestrian and festival areas, and extensive plantings, making this an inviting promenade for the new KFC YUM! Center. The project will be completed in time for the October 2010 opening of the arena.
In 2010, the glassed-in skywalk system, called Louie Link, was extended across Third Street from the new $16 million Skywalk Garage, an eight-level, 860-space parking facility on Third Street, to the new KFC Yum! Center.
athletics director Tom Jurich
, along with University of Louisville president James Ramsey and Task Force member John Schnatter
, were ardently opposed to a downtown site and supported instead a campus arena, or a new arena built near Freedom Hall at the Kentucky Exposition Center
. Jurich and Ramsey would later support the waterfront site. Schnatter, joined by fellow task force member and Humana
co-founder David Jones, strongly supported a new arena at the water company site, located four blocks down 2nd Street, or the Exposition Center, which was the cheapest option. They paid over $200,000 for a study that showed the water company site would be much less expensive than the riverfront site. However, the two dropped their lobbying effort after it did not seem to change the minds of the rest of the task force.
In the final site recommendation vote, Schnatter was the only one to vote against the waterfront site.
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
238 million, 22,000-seat basketball and multipurpose arena that opened on October 10, 2010, on the Ohio River
Ohio River
The Ohio River is the largest tributary, by volume, of the Mississippi River. At the confluence, the Ohio is even bigger than the Mississippi and, thus, is hydrologically the main stream of the whole river system, including the Allegheny River further upstream...
waterfront in Louisville, Kentucky
Louisville, Kentucky
Louisville is the largest city in the U.S. state of Kentucky, and the county seat of Jefferson County. Since 2003, the city's borders have been coterminous with those of the county because of a city-county merger. The city's population at the 2010 census was 741,096...
, United States, on Main Street between Second and Third Streets. The project is part of a $450 million project that includes a 975-car parking structure and floodwall. On April 19, 2010, it was announced that Yum! Brands
Yum! Brands
Yum! Brands, Inc. or Yum! is a United States-based Fortune 500 corporation. Yum! operates or licenses Taco Bell, KFC, Pizza Hut, and WingStreet restaurants worldwide....
would pay US $13.5 million for the naming rights and would sell the products of three of its chains—KFC
KFC
KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky, in the United States. KFC has been a brand and operating segment, termed a concept of Yum! Brands since 1997 when that company was spun off from PepsiCo as Tricon Global...
, Pizza Hut
Pizza Hut
Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes including pasta, buffalo wings, breadsticks, and garlic bread....
, and Taco Bell
Taco Bell
Taco Bell is an American chain of fast-food restaurants based in Irvine, California. A subsidiary of Yum! Brands, Inc., which serves American-adapted Mexican food. Taco Bell serves tacos, burritos, quesadillas, nachos, other specialty items, and a variety of "Value Menu" items...
—in seven concession stands within the arena.
The University of Louisville
University of Louisville
The University of Louisville is a public university in Louisville, Kentucky. When founded in 1798, it was the first city-owned public university in the United States and one of the first universities chartered west of the Allegheny Mountains. The university is mandated by the Kentucky General...
men's and women's basketball teams are the primary tenants of the arena complex. The U of L women's volleyball team began using the arena as a part-time home in 2011. It is the fifth largest college basketball arena in the nation and includes an integrated scoring and video display system, which includes large LED video displays within the seating bowl, professional grade LCD screens and a powerful control system, all provided by Daktronics
Daktronics
Daktronics is an American company based in Brookings, South Dakota that designs, manufactures, sells, and services video board, scoreboards, digital billboards and related products. The company is best known for its electronic LED displays...
of Brookings, South Dakota
Brookings, South Dakota
Brookings is a city in Brookings County, South Dakota, United States. Brookings is the fourth largest city in South Dakota, with a population of 22,056 at the 2010 census. It is the county seat of Brookings County, and home to South Dakota State University, the largest institution of higher...
. The arena's current attendance record is 22,803, set against Kentucky on Dec. 31, 2010.
History
Early arena planning focused on two potential arena sites: one owned by the Louisville Water CompanyLouisville Water Company
Louisville Water Company is a municipal water company which provides water to the more than 800,000 people in Louisville, Kentucky as well as parts of Oldham and Bullitt counties. Additionally, they provide wholesale water to the outlying counties of Shelby, Spencer, and Nelson counties...
bounded by Liberty Street, Muhammad Ali Blvd, Second and Third Streets, and one owned by Louisville Gas & Electric
Louisville Gas & Electric
Louisville Gas & Electric is a utilities company based in Louisville, Kentucky. A subsidiary of PPL Corporation through the LG&E and KU Energy subsidiary, LG&E serves over 350,000 electric and over 300,000 natural gas customers, covers an area of 700 square miles , and has a total regulated...
(LG&E) on the waterfront between Second and Third Streets on Main. In March 2006, University of Louisville
University of Louisville
The University of Louisville is a public university in Louisville, Kentucky. When founded in 1798, it was the first city-owned public university in the United States and one of the first universities chartered west of the Allegheny Mountains. The university is mandated by the Kentucky General...
men's basketball
Louisville Cardinals men's basketball
The Louisville Cardinals men's basketball team is the 18th winningest college basketball team in NCAA Division I history and has the 10th best winning percentage in college basketball history. Currently coached by Rick Pitino, the Cardinals of the University of Louisville have been to 37 NCAA...
coach Rick Pitino
Rick Pitino
Rick Pitino is an American basketball coach. Since 2001, he has been the head coach at the University of Louisville. He has also served as head coach at Boston University, Providence College and the University of Kentucky, leading that program to the NCAA championship in 1996...
stated he would not coach in an arena built at the water company site. This came at a time when the House budget committee earmarked funding for the arena only if it was built at the water company site. Others, including Papa John's Pizza
Papa John's Pizza
Papa John's Pizza is the third largest take-out and delivery pizza restaurant chain in the United States, behind Pizza Hut and Domino's Pizza. It is based in Louisville, Kentucky. Papa John's slogan is "Better Ingredients. Better pizza. Papa John's"...
founder John Schnatter
John Schnatter
John H. Schnatter , better known as "Papa John", is the founder, chairman, and current CEO of Papa John's International, Inc. He founded the company in October 1984. He is also spokesman for Papa John's.-Biography:...
, a major donor to the U of L athletic program, criticized the LG&E location due to its higher cost.
On March 10, 2006, Kentucky Governor
Governor of Kentucky
The Governor of the Commonwealth of Kentucky is the head of the executive branch of government in the U.S. state of Kentucky. Fifty-six men and one woman have served as Governor of Kentucky. The governor's term is four years in length; since 1992, incumbents have been able to seek re-election once...
Ernie Fletcher
Ernie Fletcher
Ernest Lee "Ernie" Fletcher is a Republican politician from the U.S. state of Kentucky. In 1999, he was elected to the first of three consecutive terms in the United States House of Representatives; he resigned in 2003 after being elected the 60th governor of Kentucky and served in that office...
announced at a Louisville Arena Unity Rally that the location of the new arena would be at the LG&E site along the riverfront to maximize profits. The unexpected visit was supported by Louisville Mayor Jerry Abramson.
One month later on April 23, 2007, the Louisville Arena Authority released the design for the interior. The number of seats increased from the original 19,000 to 22,000; it would be divided up between 11,348 seats in the lower bowl, with the remainder on the upper tier. The seat width also increased from 19 to 20 inches. Also included in the release was a proposed sports bar that would be located on the main concourse; it would be open year-round and have views of the Ohio River. The number of suites would increase to 72 that would be located on two levels between the main and upper concourses; they would be twice as large as those in Freedom Hall
Freedom Hall
Freedom Hall is a multipurpose arena in Louisville, Kentucky, on the grounds of the Kentucky Exposition Center, which is owned by the Commonwealth of Kentucky...
. A public plaza and concourse along Main Street was also revealed.
Prior to the release of the design, an arena report urged the facility to incorporate energy-saving elements into the construction. Other recommendations included the avoidance of large, blank walls, the inclusion of public art, and the provision of year-round uses inside the building.
On May 21, 2007, the Louisville Arena Authority voted unanimously to remove a hotel from the arena project. The 425-room hotel, which was envisioned as one way to pay off the project, was deleted because other revenues to cover the $252 million construction cost were projected to be higher than expected. The hotel would have also taken land away from a public plaza along Main Street. The Greater Louisville Hotel and Lodging Association also supported the measure, stating that downtown Louisville had enough projected rooms. The arena hotel and a planned Westin Hotel
Westin Hotels
Westin Hotels & Resorts are an upscale hotel chain owned by Starwood Hotels & Resorts Worldwide. As of 2011, Westin operated over 160 hotels in 37 countries.-History:...
at Louisville Museum Plaza
Louisville Museum Plaza
Louisville Museum Plaza was a 62-story skyscraper that was planned for Louisville, Kentucky, United States. By August 1, 2011, despite the expenditure of public funds on its behalf, its developers had officially announced that they were abandoning plans to build it...
would have added 675 rooms by 2010.
The hotel was expected to contribute $1.3 million in annual lease payments, but other sources of revenue will sufficiently cover the $573 million in total debt over 30 years on a $339 million bond issue for the arena. Originally, the Kentucky Finance Cabinet projected $211 million in new tax revenues in 2005. A more recent and compressive survey was completed recently and the projected revenue increased to $265 million. The other sources of revenue to cover the deletion of the hotel include,
- $265 million from a tax-increment financing district,
- The city's pledge of $206 million minimum,
- $179 million from interior advertising,
- $84 million facility fee,
- $63 million in luxury suite revenues, and
- $37 million in building naming rights.
The removal of the hotel would allow for a wider Main Street plaza and would allow for new features, such as a Washington Street entrance. It would also allow for more design flexibility and would lend itself to host after-hour concerts and other events on the plaza.
Financing
As a result of the subtracted hotel and the revised projected revenues, the arena, which would have lost $123,000 a year originally, might turn a small profit. The arena would generate $9.2 million a year in rent, merchandise, concessions and other revenues, along with funds from a $2 ticket tax on every Louisville men's basketballLouisville Cardinals men's basketball
The Louisville Cardinals men's basketball team is the 18th winningest college basketball team in NCAA Division I history and has the 10th best winning percentage in college basketball history. Currently coached by Rick Pitino, the Cardinals of the University of Louisville have been to 37 NCAA...
game during the first 30 years of the arena's operation. The arena would spend just under $9 million a year, generating an annual profit of $196,000.
Another reason for the revised operating expenses is the reimbursement fee that the Louisville Arena Authority must pay to the Kentucky State Fair Board for the arena's impact on Freedom Hall
Freedom Hall
Freedom Hall is a multipurpose arena in Louisville, Kentucky, on the grounds of the Kentucky Exposition Center, which is owned by the Commonwealth of Kentucky...
. The decrease in revenues, from $1.3 million to $738,000 during the first 10 years of operations of the new arena, is the result of a revision taking into account fewer events for the center.
On May 28, 2007, it was announced that the Louisville Metro Council
Louisville Metro Council
The Louisville Metro Council is the city legislature of Louisville, Kentucky . It was formally established in January 2003 upon the merger of the former City of Louisville with Jefferson County and replaced the city's Board of Aldermen and the county's Fiscal Court .The Metro Council consists of...
will propose an arena-financing deal that would save city taxpayers $3.4 million/year, or $100 million over three decades. The proposal, required the arena officials to exhaust other revenue sources, such as naming rights and luxury suite sales, before asking the metro government to pay more than its minimum pledge. The minimum pledge is $206 million towards the construction of the arena in annual installments between 2010 and 2039. Under the deal, the Louisville Arena Authority can ask the local government for up to $3.5 million more a year to cover the debt only if at least five other sources are drained. If the Louisville Arena Authority has to use additional city funds for two straight years, the Louisville Metro Council has the right to audit the arena's revenues.
The financing agreement allowed $339 million in bonds through the state of Kentucky's Economic Development Finance Authority to be issued to construct the $252 million arena. The total debt on the bonds, $573 million over 30 years, will be paid through several sources. These include the city's $206 million commitment, $265 million from a tax-increment financing district, $179 million from advertising rights inside the arena, $63 million from luxury box sales, and at least $37 million in arena naming rights. The tax-increment financing district will allow part of the anticipated growth in state taxes to help pay for the arena. The arena's share of that revenue is capped at $265 million, although the project will be able to use the excess revenues to pay down the debt. It is expected to generate $574 million over 20 years.
In September 2008, financing was completed for the new waterfront arena.
Construction
On May 3, 2007, construction began on a new electrical substation for Downtown LouisvilleDowntown Louisville
Downtown Louisville is the largest central business district in the Commonwealth of Kentucky and the urban hub of the Louisville, Kentucky Metropolitan Area. Its boundaries are the Ohio River to the north, Hancock Street to the east, York and Jacob Streets to the south, and 9th Street to the west...
. The previous substation, located on the block of River Road, Main, Second and Third Streets, was relocated across the street at Third and River Road. The new substation, projected to cost $63 million, was completed in October 2008, at which time the land that housed the old substation was transferred to the Louisville Arena Authority for construction of the new arena. Work started on the new arena in November 2008. The complex was officially completed on October 10, 2010.
In June 2010, Gov. Steve Beshear and Mayor Jerry Abramson announced a new $3 million streetscape improvement project directly underneath the Clark Memorial Bridge, a three-block area from Main Street to River Road, which will be transformed into a plaza. This includes a new decorative lighting system under the refurbished Clark Memorial Bridge, wide sidewalks, seats, new pedestrian and festival areas, and extensive plantings, making this an inviting promenade for the new KFC YUM! Center. The project will be completed in time for the October 2010 opening of the arena.
In 2010, the glassed-in skywalk system, called Louie Link, was extended across Third Street from the new $16 million Skywalk Garage, an eight-level, 860-space parking facility on Third Street, to the new KFC Yum! Center.
Controversy
The Task Force meetings were not without controversy. At first, task force member and University of LouisvilleUniversity of Louisville
The University of Louisville is a public university in Louisville, Kentucky. When founded in 1798, it was the first city-owned public university in the United States and one of the first universities chartered west of the Allegheny Mountains. The university is mandated by the Kentucky General...
athletics director Tom Jurich
Tom Jurich
Tom Jurich is the Director of Athletics for the University of Louisville. He was hired on October 21, 1997 after holding the same positions at Colorado State University and Northern Arizona University. On March 9, 1999, he signed a contract to stay the Director of Athletics until 2012, an...
, along with University of Louisville president James Ramsey and Task Force member John Schnatter
John Schnatter
John H. Schnatter , better known as "Papa John", is the founder, chairman, and current CEO of Papa John's International, Inc. He founded the company in October 1984. He is also spokesman for Papa John's.-Biography:...
, were ardently opposed to a downtown site and supported instead a campus arena, or a new arena built near Freedom Hall at the Kentucky Exposition Center
Kentucky Exposition Center
The Kentucky Exposition Center , formerly Kentucky Fair and Exposition Center , is a large multi-use facility in Louisville, Kentucky, United States...
. Jurich and Ramsey would later support the waterfront site. Schnatter, joined by fellow task force member and Humana
Humana
Humana Inc. , founded in 1961 in Louisville, Kentucky, is a Fortune 100 company that markets and administers health insurance. With a customer base of over 11.5 million in the United States, the company is the largest Fortune 100 company headquartered in the Commonwealth of Kentucky, and has a...
co-founder David Jones, strongly supported a new arena at the water company site, located four blocks down 2nd Street, or the Exposition Center, which was the cheapest option. They paid over $200,000 for a study that showed the water company site would be much less expensive than the riverfront site. However, the two dropped their lobbying effort after it did not seem to change the minds of the rest of the task force.
In the final site recommendation vote, Schnatter was the only one to vote against the waterfront site.
External links
- Webcam of Arena Construction
- Louisville Arena Authority
- Second Street Transformation to Occur Near Arena – June 2010
