Downtown Louisville Projects Built on Public-Private Partnerships
Louisville’s skyline is getting an extreme makeover, thanks to collaboration between local and state governments and the private sector.
The newest jewels include the KFC Yum! Center, a 22,000-seat sports and multipurpose arena that opened in October 2010, and a life sciences research park under construction adjacent to the University of Louisville Health Sciences Center.
KFC Yum! Center
The KFC Yum! Center was part of a $379 million project that also included a 750-car parking structure and flood wall, says Jim Host, chairman of the Louisville Arena Authority, a key player in the project's development.
“As a result, there are six new restaurants around the arena that have either been built or are in construction, providing a huge number of jobs,” Host says.
More commercial as well as residential projects surrounding the center are on the drawing board, for a total of $475 million in new development.
Development of the center was funded through a variety of innovative methods that underscored a high level of collaboration between public sector and private sector entities. The Louisville Arena Authority, a 501(c3) nonprofit, received a $75 million grant from the state to help fund the project. A second revenue stream was created through tax increment financing, in which the city pledged a portion of new tax revenues generated by the development to cover the debt issued to construct the project.
Moreover, a number of private sector firms contributed to the financing, including Yum Brands, in return for naming rights and other corporate sponsorships. The University of Louisville has signed on to be a main tenant of the arena, and is expected to generate 62 percent of the annual revenue for the center. As a result of the financing package, Moody’s and Standard & Poor’s rated the projects bond as investment grade.
“The arena is a perfect example of public-private partnerships,” says Alan Delisle, executive director of the Louisville Downtown Development Corp. “There were a number of different financing techniques that took place, and many organizations came together to make it work.”
In addition, the Louisville Downtown Development Corp. worked with the city of Louisville to improve the streetscapes and make other infrastructure improvements surrounding the center. Stimulus dollars from the federal government helped pay for refurbishing a bridge underpass.
Life Sciences Resarch Park
Nucleus, the economic development arm of the University of Louisville Foundation, is the driving force behind the life sciences research park, a campus of labs and offices for startup companies armed with patents from the University of Louisville, says Vickie Yates Brown, president and chief executive officer of Nucleus.
The vision for Nucleus and the community, Brown says, takes its lead from Dr. James Ramsey, the current president of the University of Louisville, who sees the development leveraging the assets and resources of the university and creating value for additional investment.
Construction of the research park is being financed in part by tax increment financing.
Also on the drawing board is Museum Plaza, a $465 million, mixed-use development that will include a 62-story tower and another University of Louisville research park for engineering and applied sciences research technology.
“We’ll have an urban research park right next to our medical corridor, right next to our sports district and not far from our waterfront park,” Delisle says. “We’re also creating an arts district and sustainable neighborhoods. We’re doing what we can in the public realm to make a downtown that businesses and residents will feel really good about moving in there.”