Lexington, KY - The 2014 regular session of the Kentucky General Assembly has ended, as has the near-term hopes for funding a renovation of Rupp Arena and enlarging the adjacent convention center.
As the clock struck midnight neither the House nor Senate had voted on a measure that would have included state funds toward the $300-plus million renovation of the city owned home of the UK Wildcats men’s basketball team as well as the relocation and expansion of the Lexington Center’s convention space.
“Despite the failure of the Senate to support the Rupp Arena and convention center project, we will continue to seek ways to bring this project to fruition,” Gov. Steve Beshear said in a statement from his office just after midnight.
Lexington Mayor Jim Gray, formerly CEO of a major construction company, expressed optimism for the project in the future.
"Sure it's a setback. But a setback can be a setup for the next round,” Gray said in a release from his office. “I've had projects that took years to develop, so I'm patient. A complex, transformational project like this takes time and requires overcoming big obstacles. We'll just keep working. Rupp is a great brand that inspires pride and tradition and through new jobs will bring new life to our city."
The chairman of the Lexington Center Board, Brent Rice, stated concern for his agency's ability to compete with the facilities currently in place.
"Rupp is nearly a 40-year-old facility and we can't attract the concerts, conventions, meetings and other NCAA athletic events that our competitor facilities do today. We just can't compete with a 1970s era facility. This outcome is sad for UK basketball fans and those people who would have had good jobs in the Rupp District,” he said in a separate statement sent from the mayor’s office.
“It's hard for me to understand how it's fair for Lexington and UK to be shut out when Louisville has been given $75 million for the Yum Center and $56 million for their convention center. But we'll work to find a way forward because this project is too important to give up on," Rice stated.
The Louisville funds Rice referred to were a $75 million allotment to the Louisville Arena Authority in 2006 for the construction of what was then known as the Louisville Arena Project, now the KFC Yum! Center. That facility, like Rupp Arena, is owned by an arm of the city and rented to the University of Louisville for men’s and women’s basketball games. Rupp is rented to UK for men’s games and an occasional women’s contest. At other times it is used as a concert space.
The budget passed by this year’s legislature included $56 million for the Kentucky International Convention Center, a state owned facility in the center of downtown Louisville.
The legislature used 59 of its allotted 60 days before being constitutionally forced to adjourn for the year at midnight. The legislature lost a day of work earlier in the session due to bad weather.
“Rupp Arena, the convention center, Lexington and the surrounding region need this overdue renovation and improvement to attract the conventions and investment that modern facilities bring to city centers. Delaying this project needlessly delays positive economic development for the central Kentucky region, but I am confident that we will forge a path forward,” Beshear’s statement concluded.
Absent from Beshear’s statement was whether he felt the need was great enough to warrant a special session of the legislature. The governor told reporters earlier this week that a legislative failure to pass a road plan would result in a special session. The House and Senate, however, hammered out a deal on the broad spending plan for Kentucky highways in the waning hours of the session Tuesday night.
Under state law, only the governor can call a special session of the legislature and the chambers may only consider issues specifically spelled out in the governor’s call of the general assembly back to Frankfort.
The legislature gaveled back in Monday following an extended recess for what is known as the veto session, a time meant to override gubernatorial vetoes. As is often the case the final two days were used more as a last ditch effort for legislation to get passed before adjournment.
Monday’s meetings saw a strong push from Lexington with an altered financing on how Rupp could be funded. While initially seeking $65 million in state bonds, the new package required $80 million from the legislature as a proposed hotel room tax was scrapped.
The revamped plan (which you can read about here: http://bizlex.com/2014/04/lexingtons-financing-plan-for-rupp-includes-naming-rights/) was assembled without relying on funding from tax increment financing or a TIF, a model that has underperformed in servicing debt for Louisville’s KFC Yum! Center.