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Ark park gets preliminary OK for tax breaks: Kentucky Speedway given green light

December 20, 2010 | | Comments 20

By Beth Musgrave – bmusgrave@herald-leader.com

FRANKFORT — A state tourism board gave preliminary approval on Monday for a controversial religious theme park to apply for up to $37 million in state tax incentives.

The Kentucky Tourism Development Finance Authority also gave final approval Monday for the Kentucky Speedway to collect up to $20.5 million in sales tax breaks over 10 years. The deal will allow the Northern Kentucky race track to recoup up to 25 percent of the $82 million it is spending on an expansion that will allow it to host a NASCAR Sprint Cup race.

The Kentucky Speedway is slated to hold its first NASCAR Sprint Cup race in July.

The six-member board voted unanimously to approve the incentives for the Kentucky Speedway in Gallatin County and to give preliminary approval of the Ark Encounter park in Grant County.

The centerpiece of the Ark Encounter park will be a 500-foot-by-75-foot wooden ark, which is billed as a replica of the biblical Noah’s Ark. The proposed project has garnered national and international attention, with critics questioning whether granting state tax incentives to the project would violate laws separating church and state.

The Kentucky Tourism, Arts and Heritage Cabinet will employ a third-party consultant to do an independent analysis of financial projections for the park and to see if the park would qualify for a full 25 percent rebate of its costs.

If the consultant finds that the project won’t generate enough economic activity, the board could decide against granting the full 25 percent return on the $150 million investment over 10 years. It could also decide not to grant the incentive at all.

It will likely take about four months to complete the independent analysis, tourism officials said Monday.

Todd Cassidy, the cabinet’s director of economic and community development, said the state pays no upfront money for the incentive. The state only pays money if the park meets its projections for ticket sales.

Cary Summers, the Ark park’s lead consultant, told the board on Monday that the project is expected to create about 900 full and part-time jobs after its completion and it will likely draw about 1.6 million visitors a year. Summers said the project is entirely privately funded and the group does not need a bank loan at this time.

Summers declined to name the investors in the project. The Answers in Genesis group, which started the Creation Museum that opened in Petersburg in May 2007, will handle daily operations of the park, which will include live and animatronic animals, a replica of the Tower of Babel, an amphitheater and a children’s play area.

Summers said after Monday’s meeting that the investors were not connected to a similar Biblical-themed park in Tennessee that never materialized.

The project is expected to be completed in 2014. Summers said he believed the deal to buy the land for the park would be signed Monday. Only 160 of the 800 acres is going to be used for the park, Summers said.

Backers of the project believe the Ark Encounter will be a success in large part because of the Creation Museum’s success. The museum has attracted nearly 1 million visitors since it opened in 2007, officials with Answers in Genesis have said.

Summers said the group’s data shows that “there is a high, high interest in this subject matter.”

Summers said the group is currently looking at possibly employing Amish carpenters from Kentucky to help build the Ark.

Gov. Steve Beshear has said the law does not allow the state to discriminate against a for-profit business because of its subject matter. But some groups concerned about the separation of church and state have said they may sue the state if the incentives are ultimately granted.

On the Kentucky Speedway project, an independent analysis by Rob Hunden of Hunden Strategic Partners showed the Kentucky Speedway could generate up to $47 million in additional tax revenue over the next 20 years. The expansion of the Speedway will likely generate about 584 new jobs over several years, Hunden said.

Hunden also found that the vast majority of people will be coming from out of state to attend the NASCAR Sprint Cup race.

Although the Kentucky Speedway has hosted other NASCAR events in the past, the Sprint Cup race will up the state’s national visibility and draw thousands of tourists from surrounding states, Hunden said.

“It’s really like going from the minor leagues to the major league,” Hunden said. “It’s a game-changer.”

Filed Under: State GovernmentSteve Beshear

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  1. Dave N. says:

    If I claim to have a secret plan to bring 1.6 million people to a park, can I get tens of millions of dollars from the state too?

    It seems to me like we might instead invest in economic development plans like decent schools.

  2. A Taxpayer says:

    My tax money is going toward a religious theme park? That’s ridiculous. I don’t want my tax money going toward a theme park based on a 3000 year old fairy tale that’s not even remotely believable. This is the most absurd waste of taxpayer money that I’ve ever heard of. If this goes through, then it is a good indicator of how screwed up this state is.

  3. [...] Preliminary approval given for Ark, Speedway given green light … [...]

  4. Buck Feshear says:

    “A Taxpayer,” your tax money is not going to that park, unless you are a customer of that park. The way these tax incentives work is that the venue gets to keep a portion of the tax revenue that it would ordinarily turn over to the state. So if you don’t attend and don’t pay the admission fee plus the 6 percent sales tax, none of your money is going to the venture.

  5. Dave N. says:

    Buck, if you and I order a pizza, I pay up front, you you eat half of it and don’t pay me back, it might rightly be said that I didn’t give you money.

    But we also understand that that’s not really much of a distinction.

    You owed money in, got out of paying, but someone else paid for you to make up the difference.

    That’s exactly what these tax breaks are.

  6. Mary says:

    This is very disappointing. I agree with Dave N. and others that I do not want my tax dollars spent on this and that it is an inappropriate use of state money. This moves the state backwards, not forwards.

  7. Buck Feshear says:

    Dave, your analogy makes no sense.

    Here’s a better analogy.

    I come into some new money. Instead of giving it all to you, I keep part of it and I give you part of it. Your bank account is enriched where otherwise, it would not have been had I not come into the new money.

    This is new tax revenue. Anything the state gets out of it is a bonus over and above what it would have previously collected. It doesn’t cost you or anyone else a cent if the Ark Park keeps a percentage of the new tax revenues it generates.

    Funny that I’m not hearing the same complaints about the speedway’s deal, yet it is exactly the same. But I guess if Morgan Shepherd enters his “Racing for Jesus” car or truck in a race, those tax incentives will be verboten, right? Right?

  8. Dave N. says:

    Actually, Buck, I do have a beef with the speedway and it’s hard to imagine how someone would read my post above and think that i was responding to half of this article, but not the other half.

    The speedway’s plan isn’t, to my knowledge, secret and has had a lot more time to be publicly vetted, but I believe it to be a sizable mis-spending of tax dollars. It’s not, on the, other hand, an affront to basic principles of separation of church and state.

    I think your analogy is decent if we’re talking about a business coming to town and *not* asking for multi-million dollar tax break packages, but utterly fails to acknowledge that piece of the dynamic – which is the only piece that’s part of the public issue at all.

    I think you’re failing to see the basic point that tax dollars are used to pay for things and that’s why we need them in the first place – so maintaining roads, fire departments, police departments, basic infrastructure and other things that these businesses need and that will have to be expanded to accommodate them. When they don’t pay in to the system, but take services out, that means you and I will have to pay in more to cover for them.

    And since you’re ignoring my post in the other thread, I’ll re-post it here.

    I think it’s interesting that your primary beef with the earlier Ark article (that you decry dramatically as proof that journalism is dead) is that it makes a very off-hand reference to someone you personally don’t like because “he’s an atheist” and therefore biased.

    Do you also believe that Christians should not be quoted in reference to this issue on account of their “bias?”

    That seems like a natural conclusion, but somehow I don’t think you’ll agree with it.

    And my final point is that your name is a thinly veiled profane curse and an apparent reference to fornicating with another man, and a public official with no interest in you, no less. As the primary champion of religious conservatism and public funding for Christianity on this forum, I was wondering if you could tell me how that fits into your faith.

  9. jimbo says:

    Maybe as a way to make up this lost revenue that will not be available to pay for the infrastructure improvements necessary to accommodate this park we could ask churches to give up their tax exempt status. Here we have major property owners who don’t pay property taxes to pay for the police, fire, and municipal departments that protect them. It might be that the park developers intend to organize as a religious, tax-exempt educational park anyway. Why pay taxes to Caesar if you have a higher calling?

  10. Michelle Nicholson says:

    While I find the whole creationist ideology an insult, if they qualify for tax breaks, they should get the tax breaks. I don’t like NASCAR, either, but if it qualifies, it qualifies. If you don’t like it, write to your representatives to change the rules regarding tax incentives.

    The beauty of Kentucky is so great that we SHOULD be a major tourist destination. This ark will just be one more thing to add to a trip, along with Mammouth Cave, Dinosaur World and Guntown Mountain.

  11. Debt Guy says:

    This speedway could be a real bonanza for the people of Kentucky. Not only will it have direct economic impact, but the added prestige it will bring will have a residual economic impact as well.

  12. Mark Looy says:

    So many people are completely misunderstanding the funding of the Ark Encounter. Kentucky taxpayers will NOT be picking up the tab for the Ark, as some people have claimed above. The future Ark visitors (at least 80% of them from out of state) will pay state sales tax at the attraction, and Kentucky would rebate some of the sales tax back to the Ark (if the application is approved by the state and if the Ark meets performance-based attendance projections). So, no money will be taken out of the state budget to fund the Ark project. It begs the question: why is so much of the media (and so many bloggers) not admitting this fact yet continue to give the false impression that taxpayer money is involved?

    For those who might claim that taxpayers may have to cough up money for infrastructure improvements, we point out that one of the many attractive features of the Ark site (for which we have a contract) is the already-available infrastructure. Sewer, water, and power hook-ups are there. The plan to build a new sewer plant in the area for future growth was approved prior to our purchasing the land. Furthermore, federal funds recently added a third lane to I-75 from Lexington and it will handle a larger volume of traffic. While there will be some road improvements needed near the entrance to the Ark Encounter, just like the improvements near the Kentucky Speedway, the benefit to the state — and the payoff in tourism tax revenue -– far, far exceeds the improvement costs. In addition, local residents will benefit from the road improvement.

    Is the continued misinformation disseminated by some media outlets and bloggers just their hope that the Ark Encounter LLC will leave the state and take several thousand jobs with it (and millions of dollars in revenue to the state)? With unemployment so high in the state, why would this be anyone’s wish during this Christmas season? Mark

  13. citizen says:

    There are no tax payer dollars involved in th is Business Venture to benefit the Citizens of KY!
    It would be so nice if folks cryed as loud for wasteful spending such as Political cronyism and monies to fund Illegal migrations.How about requirement to keep US business US or funding for boondogles that seem to plague Governments as much as they throw good money after bad.how about an education system that thinks throwing more money at the problem is the answer? the list goes on Wake up

  14. mri says:

    Since it doesn’t cost the taxpayers anything then I would like to have 25% of my state tax refunded.

  15. [...] Ark park gets preliminary OK for tax breaks: Kentucky Speedway … [...]

  16. [...] Ark park gets preliminary OK for tax breaks: Kentucky Speedway … [...]

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