FRANKFORT, Ky. (April 10, 2013) — The Kentucky Tourism Development Finance Authority on Wednesday gave final approval to a project to reopen the Kentucky Kingdom amusement park in Louisville.
The authority approved an application by Kentucky Kingdom LLLP for performance-based incentives, which could be as much as $10 million over 10 years.
The authority heard a report from Hunden Strategic Partners on the application that determined it met the requirements for the performance-based incentives.
A lease agreement for the project has been approved by the Kentucky State Fair Board, which owns the property where the park is located. Kentucky Kingdom closed in 2009, and the developers plan for it to reopen in 2014. The investors must now secure the final private loans – worth $25 million – before the park can open.
The investors have agreed to initially invest $45 million in the park.
The fair board and Kentucky Kingdom investors agreed to a 50-year lease after the state issued a request last year seeking proposals to reopen the park. Kentucky Kingdom LLLP was the only entity to submit a proposal. The lease includes a provision that will allow for the expansion of the water park at Kentucky Kingdom. The state’s Finance and Administration Cabinet negotiated the lease.
“This lease agreement is a fair deal for both our state taxpayers and for the investors seeking to operate the park,” board chairman Ron Carmicle said previously. “The lease protects taxpayers from shouldering private debt and ensures that the park operators have every opportunity to succeed. As soon as the private financing is finalized, the countdown begins to a reopened and reinvigorated tourist attraction.”
The rental income starts at $475,000 the first year for the fair board and will increase by $50,000 a year for the first 15 years of the agreement.
Kentucky Kingdom is required to spend $13 million in 2013 and 2014 to get the park open. It must spend another $7 million on the park through the 2016 season. After 2017, it must spend at least $1 million annually on the park.
The Kentucky Tourism Development Finance Authority considers applications under the Kentucky Tourism Development Act, which allows eligible tourism attractions a rebate of sales tax up to 25 percent of project capital costs over a 10-year period. Projects must meet certain criteria to be eligible, such as having a positive economic impact for the commonwealth and attracting at least 25 percent of guests from out of state. The rebate is based on sales tax generated by the tourism attraction.