The Kentucky State Fair Board announce today the approval of a preliminary 50-year lease for Louisville’s hometown amusement park, Kentucky Kingdom. Three years after management company Six Flags filed bankruptcy and closed the park, a new group of investors have set a reopening date of May of 2014. The investors are planning to put $45 million into restoring the amusement park.
Kentucky Kingdom is a limited partnership formed by Ed Hart, Ed Glasscock, Bruce Lunsford, and the Al J. Schneider Company, represented by its President, Mary Moseley. KK is managed by its general partner, Kentucky Kingdom Redevelopment Company.
Mary Moseley responded to the affirmative vote by the Fair Board with the following statement: “The Fair Board’s approval of a 50-year lease with our company means that a crucial step toward the reopening of Kentucky Kingdom has been taken.”
“This agreement is great news for the families who will visit Kentucky Kingdom and will certainly be a shot in the arm for local and regional tourism,” said Gov. Steve Beshear. “This lease will also mean hundreds of jobs as well as much-needed income for the Fair Board. We are pleased that we were able to reach a mutually agreeable lease so the park can reopen as quickly as possible.”
Following today’s agreement between the Kentucky State Fair Board and the new owners of Kentucky Kingdom in re-opening the amusement park, the city is providing three financial incentives to assist in the redevelopment, Mayor Greg Fischer announced.
First, Metro Government will rebate 100 percent of the occupational taxes collected at the re-opened amusement park for 10 years, which will produce an estimated $100,000 a year.
In addition, Fischer said the city will contribute another $100,000 yearly for 10 years from the city’s General Fund and the Louisville Convention and Visitors Bureau will provide $100,000 a year for five years.
The total contributions from the city and convention bureau would total between $2 and $2.5 million.
“This is a great partnership and an example of the community stepping up to give new life to a facility that is essential for the jobs and quality of life it brings to our city,” Fischer said.
Fischer, along with Metro Council President Jim King and Councilman Kelly Downard, have been working for months to craft the deal.
“The Kingdom is one of the keystones of our city,” King said. “It’s been missed because of its effect on jobs, tourism and wholesome fun in the region. I’m thrilled the Metro Council could play a role in bringing it back.”
Fischer also said the re-opening is important because of the number of summer jobs for teens that the park will create.
In a Thursday afternoon press release, developer Ed Hart said, "We are beginning immediately to mobilize our staff so they can get started on the tremendous amount of work that must be done to prepare Kentucky Kingdom for a May, 2014 opening. We believe we are up to the task – and speaking on behalf of my partners and our management team, we look forward to the challenge."
Summary of Kentucky Kingdom LLLP Lease Agreement
- Kentucky Kingdom LLLP to invest $45 million to improve amusement park with opening in spring 2014. $20 million in equity investment and a $25 million loan. All improvements become property of Kentucky State Fair Board (KSFB). $13 million to be invested in 2013 and 2014, of which $3 million going into debt reserve fund as required by Lender; $2 million invested upon completion of 2014 season; $2 million invested upon completion of the 2015 season; and $3 million invested upon completion of 2016 season. Development plan set out in No. 6 commences after 2017 season.
- Lease is for a 50 year initial term with four additional five-year renewal options.
- 57 acres plus a potential four acres for expansion of the water park.
- Rent starts at $475,000 per year beginning in 2014 and increases $50,000 a year for 15 years until it caps out at $1.2 million for the remainder of the initial term. KSFB receives 5 percent of the gross revenue in excess of $25 million for each operating year.
- Parking - KSFB to pay Kentucky Kingdom $1.25 per visitor up to $450,000.
- Kentucky Kingdom to spend at least $1 million per year (for the remainder of the initial term of the lease) and capping out at $2.5 million a year or somewhere in between based on a formula that is based on projections. All funds must be spent on park during initial term. If park is sold (after KSFB approval), then KSFB gets all funds in maintenance reserve account.
- All rides/improvements purchased with $45 million will become the property of the state. Kentucky Kingdom may lease future rides with other development funds in order to leverage more new rides to increase attendance. When the leased rides are paid off, they also become the property of the KSFB.
- Mortgage will be placed on property to secure a portion of the $25 million loan taken out by Kentucky Kingdom with bank. This is pursuant to KRS 56.515.
- Lease can be sold with the consent of the KSFB to experienced park operator.
- Lease may be terminated by either party within 90 days after execution if the financing package is not acceptable to either Kentucky Kingdom or KSFB. Finance and Administration Cabinet and KSFB will be involved in negotiations with bank to ensure that the financing details are known to them during the financing acquisition phase.
- After lease is signed, if park requires major unforeseen work not covered by Kentucky Kingdom’s projections, it may terminate lease within 90 days of execution of lease.