Louisville Arena Authority officials in Kentucky will wait until next year to issue bonds to build a proposed $254 million arena in hopes the nation’s credit crisis will improve.
High borrowing costs reportedly could add another $90 million to the project price tag, according to the city’s Courier-Journal.
Larry Hayes, authority vice chairman, told the paper the national credit mess "has slowed down our ability to work our way through with our insurer, and we have probably lost weeks because of their ‘over’ due diligence."
Hayes was referring to lengthy negotiations with Ambac Financial Group, which the authority will pay $11.4 million to insure $360 million in bonds. Goldman Sachs reportedly couldn’t lock down a low interest rate until the Ambac negotiations were completed, the Courier-Journal said.
Revenue from the arena includes $179 million in advertising rights that will be used to pay off the construction costs for the venue, which will be home to the University of Louisville basketball programs.
The authority has until March to borrow the funds and begin construction as planned, the paper said.