The Yum! Center bond debacle ... and an interesting perspective on Freedom Hall.

First, the theme.

A Little Bit More On The Arena Debacle … (The 'Ville Voice)

... By now you know that the Yum! Center’s been downgraded by Moody’s. But if you don’t, here’s a refresher from Gregory Hall:

A credit rating firm has again downgraded the KFC Yum! Center’s bonds, putting on hold a potential refinancing for a lower interest rate that could save millions a year, according to Metro Council President Jim King, who is also a Louisville Arena Authority board member.

Citing persistent risks to the arena’s ability to pay off the $349 million worth of bonds, credit rater Moody’s Investors Service downgraded its opinion of the Yum Center bonds to Ba3, pushing them deeper into “junk” status.

Moody’s said existing agreements — namely the arena authority’s deal with the University of Louisville — and scheduled increases in interest and principle payments will be a drag on profitability, even with improvements in the arena’s operations and a reconfiguration of a taxing district around it.

Then, in the comments section, the variation.

J. Bruce Miller

The ‘real shame’ of all is that had our majority Chinese investors not gotten ‘cold feet’ as a result of the NBA ‘lockout’ there was every indication they would have purchased the Hornets FROM the NBA, moved them to Louisivlle and ‘likely’ have remodeled Freedom Hall. This ‘concept’ was specifically discussed with David Stern. Freedom Hall is ‘historic’ — in actuality — the ‘first integrated basketball palace in America’ for the NCAA — where a whole bunch of Final Fours were played in the 60′s with integrated teams. The place could have been a ‘shrine’ like Fenway Park or Wrigley Field. Such a ‘shrine’ would have been of ‘international importance for Louisville – where the international television of NBA games could have immenated to Beijing, and 180 countries. Stern was interested — but it didn’t happen. Just like Jake’s said so many times “We really have a hard time doing the ‘big things’ right around here.”

Yes, but: If you think it’s hard in Louisville, try living in New Albany.

NBA? It's a state asset, too.

I really hope the Dalai Lama told (okay, counseled) the trembling Greg Fischer to get his shit together.

An NBA team in Louisville WOULD be a regional asset precisely because it WOULD NOT be affiliated with the University of Louisville.

NBA not DOA: Kentucky econ-dev czar Larry Hayes says NBA team would be ‘a state asset’, by Terry Boyd (Insider Louisville)

 ... Translated: The market study by PriceWaterhouseCoopers found that there is insufficient corporate density to support NBA suites at KFC Yum! Center didn’t calculate regional interests from Lexington, Northern Kentucky and other areas.

Which is exactly the position of NBA2Louisville organizers.

Brewer: "Louisville has the money and the potential for a good fan base to make the NBA work."

With Sacramento staging a late counter-offer to a proposal to sell the Kings to interests in Seattle, it's looking unlikely that Louisville gets a team any time soon, even if it wants one. Seattle sportswriter Jerry Brewer, formerly of the Courier-Journal, provides his views on the topic in a chat with WFPL.

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Seattle Times Columnist Jerry Brewer: 'The NBA Could Work in Louisville'

By JOSEPH LORD

Enlarge image

Credit NBA/Creative Commons

The question of whether Louisville could and should have an NBA team has entered a quieter phase since the Sacramento Kings began talks of relocating to Seattle. Though it's no done deal, as a Sacramento group is also trying to keep the franchise in place.

Either way, at this juncture no NBA team appears up for grabs—though history dictates that that's likely to change in the next several years

Louisville officials said the city was never truly pursuing the Kings. The city isn't at that point yet, they said. Greater Louisville Inc. is updating a past study on the NBA and Louisville, and that's where things currently stand on the issue, said Chris Poynter, spokesman for Mayor Greg Fischer.

Despite the apparent lack of an available NBA team, the questions will linger—as they have for years—as to whether Louisville ought to get into the professional basketball game.

This led me to Jerry Brewer. 

Coomes: "The Yum! Center seems unlikely to succeed without offering a basketball product that appeals to more than U of L fans. That product is spelled N-B-A."

At Insider Louisville, Mark Coomes does the impossible, discussing the insolvency of the KFC Yum Brands Arena, well, like an adult, and even asking adult-style questions.

Mark Coomes: The pink elephant in the NBA-to-Louisville debate is the white elephant downtown

By MARK COOMES | Published: DECEMBER 19, 2012

The pink elephant in our room is the white elephant downtown.

We need to take off the blindfolds and the rose-colored glasses.

This is no time for backbiting or catfighting. We need to talk about this like adults.

Tyler Allen on NBA: “This is a missed opportunity. How can we afford not to go down this path?”

The co-founder of 8664 offers his pro-NBA testimony.

Tyler Allen at IdeaMornings: ‘Expect powerful people to launch organized, well-funded campaign against an NBA team’, by Terry Boyd (Insider Louisville)

... Allen contends anti-NBA arguments – an NBA team will hurt U of L attendance and games are too expensive – “never quite line up.”

“This is a missed opportunity. How can we afford not to go down this path?”

Allen acknowledged U of L officials’ arguments about an NBA team interfering with the men’s basketball scheduling.

Then he stated that of U of L ‘s 54 dates for various programs including men’s basketball, there are only four games – one men’s game, three women’s – scheduled for a weekend night, when the NBA typically plays.

The main argument from NBA opponents is, ” ‘Louisville’s got to do what’s right for U of L,’” Allen said.

“No. We have to do what’s right for Louisville.”

Tomorrow: Tyler Allen on the benefits of the NBA in Kentucky, and an NBA2LOU Watch Party.

At Insider Louisville, we learn that none other than Tyler Allen, co-creator of 8684, is on the professional basketball side of the discussion.

IdeaMornings presenting 8664 founder Tyler Allen weighing in on NBA in Louisville

This promises to be extremely interesting.

Louisville-based businessman Tyler Allen, is scheduled to speak on bringing a National Basketball Association team to Louisville at the IdeaMornings meeting this Fri., Nov. 30 at the iHub.

From the IdeaMornings synopsis:

Tyler Allen is a Louisville businessman, owner of USA Image Technologies, Inc. and co-founder of the 8664 movement. Tyler will be talking about the benefits – intangible included – of bringing an NBA team to Kentucky. There has been a lot of recent discussion on this topic and we look forward to hosting this event and hearing more ideas from the community.

Meanwhile, there's a whole slate of NBA (and ABA) themed activities at Bearno's by the Bridge, as reported (again) by Insider Louisville.

NBA2Lou: Bring the NBA to Louisville Facebook group hosting panel panel discussion Friday at Bearno’s by the Bridge

Think there’s no mass enthusiasm/momentum for bringing pro sports to Louisville?

We know different.

Every time Insider Louisville has an NBA-related post, the IL web traffic disco ball always spins.

So here we go again.

Friday evening, the Bring the NBA to Louisville Facebook group is hosting an event.

The question is, will Metro Mayor Greg Fischer and Louisville businessman Junior Bridgeman, the two most crucial NBA-to-Louisville boosters, attend?

Find out at Bearno’s by the Bridge at 131 W. Main St., right next to the KFC Yum! Center at the corner of Second and Main Streets.

Pro vs. college sports: "Wherever fans are, give them a choice — they'll gravitate toward the best."

Louisville is located in Kentucky, and Kentucky recently rejected Barack Obama by one of the largest margins of any state. With this knowledge firmly in hand, let's consider pro and conservative views of college football.

College Football: Pro and Con(servative) Views, by Frank Deford (NPR)

... But a caveat. The sectional adoration for college sports may have no relationship whatsoever with either political or Chick-fil-A preference.

It may simply be that wherever honest grown-up professional sports abound, attention to second-rate, NCAA shamateur sports gets diminished. The Southeastern Conference, in particular, may be so popular primarily because Dixie possesses so many fewer pro teams compared with the East, West and Midwest ...

... Basically, sports is primarily a class thing, and the pros are simply a higher class than the colleges. It's a better product. Yes, yes, I know college games can be entertaining, and there's loyalty and tailgating. But wherever fans are, give them a choice — they'll gravitate toward the best.

To repeat Deford's central hook: "Basically, sports is primarily a class thing, and the pros are simply a higher class than the colleges. It's a better product."

Rather like Obama in the election.

Now, let's turn to the group of concerned parties currently engaged in lobbying against the very thought of the NBA in Louisville.

Media executives revealed as chairs of anti-NBA group, by Joe Arnold (WHAS-11)

The co-chairs of Home Court Advantage, a group aimed at discouraging Louisville from pursuing an NBA team to share the KFC Yum! Center with the University of Louisville, have revealed their involvement in a letter to business leaders.

Keith Hall, a former Insight Communications executive, and George Demaree, the General Sales Manager of Main Line Broadcasting, tout their media experience in the letter, saying, "our own personal pocketbooks have often been dependent on good investment decisions regarding athletics of all kinds on all levels."

Attached to the letter is a study commissioned by the group, revealed by WHAS11 earlier this month, which concludes that the costs associated with attracting and retaining a National Basketball Association franchise for Louisville outweigh the benefits.

Hall is a former member of the University of Louisville Board of Overseers. A U of L spokesman has said that the university was not involved in the study and, to his knowledge, had not requested it.

The argument here is that the interests of Louisville's public university (U of L) outweigh numerous other inter-related civic and business decisions aimed at bringing the NBA to Louisville. Okay, that's fine, except these university "interests" pertain solely to basketball (and a sliver of volleyball) tenancy in Yum's still under-utilized arena.

Now, if these media execs were interested in U of L as a SCHOOL, they might be credible witnesses. As it stands, the tail still wags the dog.

To paraphrase Rodney Dangerfield: "Who made U of L basketball pope of this dump?"

(discussion thread at Facebook)

Louisville + NBA = ??? ... a few links for further reading.

Previously (and often) I’ve taken the position that there should be an NBA team ensconced at the flailing Yum! (JAY-sus, I hate that name altogether, and detest the exclamation mark even more) Center, and the University of Louisville should not have veto rights over potential relocation deals.

At NA Confidential: "It is now more than obvious that giving U of L the designation as primary tenant of the KFC YUM! Center isn't working anymore."

Perhaps a majority of my acquaintances disagree, and that’s fine. I'm a pro sports kind of guy, and in a market able to draw the like-minded from big distances south, east and west, it is my belief that the NBA has a shot here.

I was having a Twitter discussion earlier today, and the Louisville + NBA = ??? equation was mentioned. Coincidentally, Oklahoma City and its Thunder were profiled in last Sunday. Seemingly, this is a good comparison in terms of market size.

A Basketball Fairy Tale in Middle America, by Sam Anderson (NYT)

However, perhaps it isn't so simple, even if the news in other cities like Memphis, Tennessee, has been quite positive of late.

“The Nation” recently suggested that small market pro sports success is a myth, because for a team’s ownership to succeed, significant subsidies must be shifted its way by the particular city. Zirin makes a forceful case during the course of describing how the Thunder came to relocate from Seattle.

James Harden, the NBA and the Myth of Small Markets, by Dave Zirin (The Nation)

Of course, we’ve heard this argument before, and there is substantial testimony supporting the position that pro sports teams are more of an economic drain than boon owing to the necessity of public subsidies to enhance profitability.

A Critical Battle Over The Sports Economics Model, by Warren Meyer (Forbes)

In this context, and as mentioned in Anderson’s article above, perhaps the critical factor prefacing OKC’s success with the advent of a pro basketball team was that the Thunder's arrival was not intended to initiate revitalization. Rather, it served as a virtual appendix to revitalization work already underway for a full two decades.

GLIDE trip insiders: How unity of vision and an ambitious, yet fiscally conservative, taxing plan transformed Oklahoma City, by Melissa Chipman (Insider Louisville, with link to a 2008 NYT article about rehabilitation of OKC's urban river)

In Louisville's case, might not the real problem be that with public subsidies already spent on the arena's construction as U of L's exclusive crib, the university simply isn't in a sharing mood when it comes to gift horses?

" It is now more than obvious that giving U of L the designation as primary tenant of the KFC YUM! Center isn't working anymore."

This is one of the more dispassionate, thoughtful statement of Louisville's NBA readiness that I've seen. Just the facts, whether you agree or disagree. When will U of L's tail stop wagging Louisville's dog?

Louisville is Prepared for NBA Team, by Jordan Baer (Stadium Journey)

Will the NBA's Sacramento Kings become the Anaheim Royals or the Seattle SuperSonics? Will they make a coast-to-coast move to Virginia Beach to become the next incarnation of the Virginia Squires? Or, will they simply stay in Sacramento?

For those living in the Kentuckiana region, the answer to the Kings' future is not listed above. It's been more than 36 years since the city of Louisville, Kentucky hosted the highest level of professional basketball.

NBA in Louisville: "The window is once more open."

I've never met Albrecht Stahmer, but I commend him for his recent essays at LouisvilleKy.com, where he has been making the case for resolving the predictable financial woes of the Yum! (groan) Brands Arena through tenanting. This means adding a tenant with a sufficient number of dates to make a difference, such as an NBA team.

Yes, I know what you're thinking: "But Roger, I have no intention of supporting the NBA, because I like my pros to pretend they're in college ... therefore, it's a bad idea."

Just read the article, okay?

Louisville, Seattle, Sacramento and the NBA

August 12, 2012

By Albrecht Stahmer

HoopsWorld NBA Editor Steve Kyler, a man in the know about the NBA, wrote an interesting piece on July 31 suggesting that the Sacramento Kings are all but done in their current hometown when their arena lease expires at the end of next season, meaning they will need a new home for the 2013-14 season.  This saga has been ongoing for almost two years now and in November 2010 served as the impetus for five young Louisville basketball fans to start a Facebook page called Bring the Sacramento Kings to Louisville, which between it and a sister page called Bring the NBA to Louisville, have almost 10,000 likes.

From Insider Louisville: "Louisville joins ‘junk bond’ club as Moody’s downgrades $340 million KFC Yum! Arena debt."

But the Cards made the Final Four ... and Lady Gaga (performed) there. Meanwhile, amid the basketball circuses and plenty of bread at Taco Hell, we're about to get stuck with lifelong tolls to support bridges which are supposed to generate jobs, even as Louisville remains on the wrong side of the manufacturing/higher ed divide at No. 78 on list of 100 best-educated cities, giving you an idea as to what sort of jobs Kerry Stemler intends to create.

Move over Greece: Louisville joins ‘junk bond’ club as Moody’s downgrades $340 million KFC Yum! Arena debt

By STAFF | Published: MAY 31, 2012

Gordon Gekko at Goldman Sachs, placing the KFC Yum! Arena debt.

Louisville and Greece now have something in common: Both have bonds that have been downgraded to “junk” because of a bleak outlook when it comes to our servicing public debt.

Two days ago, without anyone much noticing, Moody’s Investors Service downgraded the underlying rating on the Kentucky Economic Development Finance Authority’s Louisville Arena Project Revenue Bonds to Ba2 from Baa3.

For the non-bond vigilantes, that’s two ratings below Baa, where high-risk junk rating begins and investment grade ends – along with low interest rates.

Not that this was unexpected: Moody’s put KEDFA on notice back in December this was coming unless Louisville officials figure out some way to increase tax revenues in the tax increment financing district around the arena, which was projected to be chock full of retail, hotels and restaurants by now.

Read the whole article

The morning's reading: ORBP, 1Si Q & A, Grant Line Road, Yum! Arena.

Shaw's LEO piece is a colossus. The rest are relevant, too. Teasers are drawn from the articles.

The Great Barrier, by Steve Shaw (LEO Weekly)
As the bi-state Bridges Authority has denied requests to divide or reduce the project, percolating public frustrations have given rise to incivilities, including claims of business leaders intimidating opponents. The bi-state authority appears committed to its all-or-nothing gambit even after a poll revealed a stunning erosion of support for the total package.

Dec. 8 Will Be, Ah, Yummy! in Louisville, by Billy Reed (Billy Reed Says)
Once you get past the name, the new home for Coach Rick Pitino’s program may well be the finest arena in the nation that has a college team for its principal tenant. It was built to NBA specifications, but there’s no NBA team to share it with the Cardinals, which is just fine with U of L’s rabid fan base.

Qs & As, by John Gonder (Gonder for New Albany At-Large)
Among some of the questions not asked at last night's City Council meeting is, "what is the relationship of local Chambers of Commerce to the national organization?"

New Albany, CSX reach agreement over major Grant Line project, by Daniel Suddeath (Tribune)
It won’t include an overpass, but New Albany is aspiring to begin improving a portion of Grant Line Road next year.

Mixed signals and unmarked bills.

I'm confused by the mayor of Jeffersonville's logic.

He sees a benefit for the Indiana side of the river in the form of the new arena, which might bring Louisvillians this way to park.

He also supports tolls on existing bridges to begin the ORBP boondoggle, and these tolls will have the reverse effect.

Obviously, I have a lot to learn about construction kickbacks.

Read the Tribune's discussion of the new arena's effect on Jeffersonville and Clarksville here. I'm watching the resurgent Reds tomorrow, and may not be back here until Friday.