Louisville's Rotting Asset

Kentucky Kingdom has been closed since the summer of 2009, and  it is unclear if it will ever reopen.

There's an age-old question that many people ask when considering the assets they own: how do you really value it?  Some things, such as cars or other durable goods, are sure to depreciate and are at their peak value the day they are purchased.  Other items, such as homes, jewelry, and fine art, can appreciate and gain  enormous amounts of value through either time-based valuation or a large increase in demand caused by an incident in time.  But another category of goods is tougher to pin down, and those goods are things that are only really valuable if they are being used to generate some type of intrinsic worth; and when they aren't in use, these items are simply losing value and being a drain on resources.  Such is the case for the theme park formerly known as Kentucky Kingdom.  Like the ice cream machine you bought back in '93 when you thought you were going to hit it big in the gelato business, but is now dust-covered in the garage, unless the theme park is open and generating revenue then it is essentially a worthless use of some very prized real estate at the Kentucky Fair and Expo Center.  And it is absolutely dumbfounding that no government agencies have stepped up the plate to ensure it resumes business in the near future.

Consider this:  in the winter of 2010 when the Kingdom officially closed its gates it was reported that over 1,000 part-time summer jobs, 55 full-time positions, and an estimated 10,000 hotel stays would be lost annually.  Not to mention the millions of dollars of taxable revenue generated from cotton candy and stuffed animal sales.  On top of that, the fair board alone lost nearly $2 million in now unpaid rent and parking fees that the park brought into their coffers every summer.

The unfortunate part of the entire situation is that it was something that could have potentially been avoided.  Being mired in a large corporate bankruptcy, Kentucky Kingdom's operator and parent company, Six Flags, simply decided to pull the plug and cease operations at the park.  Leaving behind in its wake 58-acres of roller coasters and thrill rides that offer no benefit to the city if they aren't in use.  Twice now independent investors have attempted to purchase the park and restore it to some semblance of its previous glory, but these attempts have been futile at best.  Original owner Ed Hart tried to purchase the park with the help of some tax forgiveness and commercial loans from the State of Kentucky, the City of Louisville, and the Fair Board.  This deal ultimately fell through when tough economic conditions and shrinking municipal budgets caused those lending options to fall through.  And this past spring the owners of Indiana's Holiday World attempted to reclaim a portion of the park - saying the major roller coasters such as the Vampire, T2, and Thunder Run were too far in disrepair to make them feasible for re-opening.  This deal ultimately fell through when the Koch Family claimed the Fair Board was being too short-sighted in its lease agreement, and felt there would be nearly no way to make the project profitable.

So where does this leave us?  Mayor Greg Fischer has repeatedly said that it's his goal to continually be growing the economic base of our community, and has shown as much in his efforts to expand the presence of both Ford and GE here locally.  So why not reach out to try and lure an investor for this park locally?  Or approve a corporate-friendly tax package that would make a deal worth doing for Ed Hart or another local fan?  With 1,000 part-time jobs literally sitting dormant on the sidelines, what better way to jump start the local economy?  If you figure those jobs pay minimum wage at 20 hours a week for a seasonal six-month period that equates to over $300,000 annually in payroll tax alone that the city is losing out on, not to mention the other, probably, $200K lost without the park's full-time staff.  In total, there is an asset worth  near $500 million in annual economic impact (this is not an official statistic) that is simply being left to rot.  And each that passes by the memories of gleeful children frolicking, hundreds of teenagers celebrating a weekend at Day Five Alive, and throngs of adults soaking up rays in the lazy river simply fade into oblivion.  All while the thoughts of what could have been continue to mount as Louisville loses yet another piece of itself in the puzzle of what could make it great.