A planned amusement park in Grant County featuring a life-size Noah's Ark is two years and millions of dollars behind schedule, but now it's getting more civic help: a $62 million bond issue being offered by the city of Williamstown.
The city, which has already granted the project a 75 percent break in property taxes over 30 years, won't have to repay the bonds, according to the bond-offering documents. That's good, experts say, because the bonds are not rated, which makes them speculative, or "junk" bonds, said Gene Gard of Dupree Mutual Funds in Lexington.
The taxable bonds are backed by future revenues from the project, which organizers believe will attract more than 1 million visitors in the first year.
The offering is not something that would be considered for purchase by a firm like Dupree, Gard said, because of the risk.
"It might be people who are looking to allocate some money to a more speculative issue, or it might be people who would really like to see this project built," he said. "Or you could look at it almost as a loan to a family member and not be as concerned about being paid back."
If the park can't produce enough revenue, the people who buy the bonds will lose their money, but it shouldn't have any lasting effect on Williamstown.
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Alex Luchenitser, legal counsel for Americans United for Separation of Church and State in Washington, D.C., said his group has been following the Ark Encounter project closely, but has not made any legal moves because it's not clear the project will happen.
"We're not interested in filing a lawsuit where you might not need one in the first place," he said. "But we think it raises serious constitutional issues, both on the federal church-state requirement and under the Kentucky Constitution," which has language prohibiting government aid to religious institutions.
City seeks to jump-start stalled Ark Encounter park with $62 million 'junk' bond offering | Politics and Government | Kentucky.com
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