Zipp - I am Lobbing you a Softball here, but honestly, how do the numbers work?

[glassmanJ]

simply, if there are no events downtown with restaurants and hotels not making money, how does the YUM center continue to make payments as weren't payments based on surrounding tax zones? can they get part of the PPP loans or other versions or is defaulting a serious possibility? i may not always agree with how you present your info as anyone can make a chart say what they want, but you certainly know the tax implications of the stadium so what's your thoughts on it's future? are there serious financial shortfalls or is there some relief built into the system? i would like to hear your thoughts and i am not trying to stoke debate or have people attack you. i honestly would like your thoughts on how the covid effects things. it has to be making some people down there pucker. thanks!

 

[Ipartiedwithhopgood]

I'm pretty sure Zipp has been spot on with the arena topics, but it's been awhile.

 

[teamcanada]

Even when the virus is over alot of people aren't going to be going back downtown to visit the few businesses that will be left open. That has to hurt financing too.

 

[glassmanJ]

Even when the virus is over alot of people aren't going to be going back downtown to visit the few businesses that will be left open. That has to hurt financing too.

exactly. i guess zipp is on vacation but it seems like the perfect scenario for his past thoughts. my guess is two years for business to return to normal and thus no tax revenue downtown. but heck, interest rates are so low maybe they refinance. i am actually kind of excited to hear zipp's reply as it seems like the perfect doomsday scenario

 

[zipp]

I've penned an arena article for a U of L website that has granted me writing privileges as a "contributor". But I haven't posted it yet. When I'm ready with my first topic on that site, I'll post a link here. It's not a site that takes premium subscribers and doesn't have message boards per se, so IMO it's not a pure competitor for this site. Hopefully, the managers of both sites agree.

The financials for the Louisville Arena Authority (LAA) were posted to their website in late-May, and I encourage anyone who wants to read a financial report to check it out. It surprised me a little that the report issued without any fanfare or press release. My short response to glass is that the arena will be in trouble if it's not already. The annual report shows that TIF growth was slowing before the pandemic, and there isn't enough financial cushion to withstand the shock that's hit the central business district.

One silver lining is that the Feds have established the Federal Reserve Municipal Liquidity Facility (MLF) that may help arena bondholders and the LAA indirectly. LINK I'm no expert in this regard, but it says that

"...the Federal Reserve will continue to closely monitor conditions in the primary and secondary markets for municipal securities and will evaluate whether additional measures are needed to support the flow of credit and liquidity to state and local governments."​

These arena bonds trade in the "secondary markets". And if municipal credit conditions tighten, for example, due to a risk of default, the government will probably step in and buy bonds at par/face value. This doesn't pay expenses or avert insolvency, but it helps to keep the LAA in control of the arena if servicing its debt becomes a big problem.

The arena has always been on wobbly legs. As is happening with other marginal businesses, the pandemic will indiscriminately focus more attention on your financial issues...