They are few in number, but what they argue is scary, the naysayers who continue to question the feasibility of the new University of Louisville arena. However, the construction schedule appears to be moving forward, meeting every date for the scheduled opening in November 2010.
The future of the project hopefully will become abundantly more clear when the Louisville Arena Authority (LAA) meets to review progress on Wednesday. The meeting is open to the public. Got questions? Show up at the Kentucky International Center at 1:30 p.m., Rooms 109-112.
One would hope that the meeting will forever end some of the speculation over the sale of bonds. Meanwhile, here are some frequently asked questions from the LAA’s web site:
What is the total cost of the Arena, and who is paying for it?
The total guaranteed maximum cost to build the Arena is $249 million. The project is funded by at least $360 million in gross proceeds from bonds issued by the Louisville Arena Authority.
According to the Leib Report (an independent review of the Louisville Arena Authority’s development and financing plan prepared in 2006 and updated in 2007 by The Leib Group, LLC), the Arena-generated revenues are projected to be $1,100,000,000 over 30 years, or the life of the debt service. Revenues include income from the University of Louisville’s lease of the Arena, as well as a percentage of sales of premium seating, luxury suites, loge boxes and club seats; naming rights; advertising and sponsorships; facility rental; concession sales; facility fees; and tax increment financing (“TIFâ€Â) Revenue.
If the Arena’s cost is only $249 million, why is it necessary to issue $360 million in bonds?
In addition to the direct Arena costs, the Arena Authority will issue bonds to capitalize interest during the construction period, to fund a debt service reserve, and to pay bond issuance costs.