New arena deal brings more questions than answers
The Louisville Board of Trustees, UofL Athletic Association and the Arena Authority each ratified a new agreement between the University of Louisville and the KFC Yum! Center today.
An event like this should give an answer to a frequently asked question (How can we save the Yum! Center?), but instead it seems like Louisville supporters have more questions after the agreement than before.
Most notably: Was this the best course of action for UofL?
Certainly it helps the Yum! Center. The beleaguered arena gets an extra month of priority scheduling dates and $2.42 million from University of Louisville Athletics. Part of the deal will also see the city kick in the maximum yearly payment of $10 million.
But was this best for the University?
City and state officials begged UofL Athletics to come downtown when the Yum! Center was initially built, and the original 10-year lease reflected that. Jurich was a big part of those discussions, and it was a deal favorable to UofL.
This deal? Not so much.
Clearly Interim President Greg Postel took the lead on this project and, judging by the body-language and reactions during Thursday's meetings, Jurich was miffed at merely being "informed" about the proceedings rather than a party to the negotiations.
Louisville fans and supporters would likely have fewer questions about today's deal and it's benefit to the University if UofL's best negotiator, Vice President of Athletics Tom Jurich, was known to have been a bigger part of the negotiations.
On 790 KRD this morning, I compared leaving Jurich largely out of the arena negotiations to the Cleveland Cavaliers trying to win the NBA Finals without LeBron. It is certainly Dr. Postel's prerogative to handle the matter himself, but was that a wise decision?
And this brings to mind even more questions - What is their relationship going to be like moving forward? What is Dr. Postel thinking creating a rift between he and UofL's most-gifted employee? What is Dr. Postel's motivation? Is taking control of Athletics' business the bidding of the Board of Trustees or the Governor?
How will this drastic increase in payments from UofL Athletics to the Yum! Center be financed? We found out Thursday that some of the money will come from a ticket surcharge, but we also know that previously free sporting events at Louisville may no longer be free.
And back to the essential question - How can we save the Yum! Center? Did today's action save it? Not likely according to some on the ULAA Board and the Board of Trustees. It helps, but the tiny amount of principle paid on the massive loan so far seems like a tidal wave that will crash at some point whether Louisville kicks in extra money or not.
Marty Finley of Business First noted: "The Yum Center to date has paid off only about $7.9 million of the roughly $350 million in principal debt on the bonds, as much of the payments to date have covered interest. A tax increment financing district that captures a portion of sales and property taxes around the arena has fallen far short of original expectations and is the largest contributor to the impending financial crisis."
That brings up even more questions. Is the Yum! Center the best future home for UofL men's and women's basketball? What happens to the Yum! Center if Louisville decides it doesn't want to be the anchor tenant? Is this renegotiation of lease terms going to be a one-time occurrence or is this the start of a slippery slope?
Typically in times like this, Louisville fans have looked to Tom Jurich for answers. His steady leadership over the last 20 years has led Louisville from the brink of getting kicked out of Conference USA to a spot in the ACC. But because his input on the negotiations seemed to be minimized, the questions now need to be addressed to Dr. Postel instead.