Arena Cites Fair Board For Losses

Before a panel of state lawmakers Nov. 13, authority member Jim King said he believed “millions” of dollars were wasted before the contract with the fair board was terminated in 2012 after two years, according to the Courier-Journal.

The fair board amassed more than $9 million in general and administrative costs during that time, including losses incurred when University of Louisville basketball moved to the KFC Yum Center. The administrative costs reportedly “dropped significantly” after AEG assumed management of the arena. Kentucky’s 2006 state budget, which set up funding for the arena and included the management agreement between the fair board and arena authority, included a provision that would have the authority make payments to the fair board in the case of negative impacts caused by University of Louisville sports moving to the Yum Center, according to the paper.

A dispute arose over a settlement proposal that would have the authority pay $1.4 million, with the fair board rejecting those terms and instead demanding $7.2 million. The issue will be decided by the state’s attorney general, but King told the panel he doesn’t believe the arena authority owes the fair board more than the $1.4 million it’s agreed to pay.

King said the fair board had more than $2 million in administrative costs in the first six months of 2012 before AEG took over management. AEG’s management cost for the last six months of that year were $931,000, and $2.3 million for 2013 compared with $4.2 million in costs for the fair board in 2011.