Interim Joint Committee on

Economic Development and Tourism


Minutes of the<MeetNo1> 3rd Meeting

of the 2005 Interim


<MeetMDY1> October 13, 2005


The<MeetNo2> 3rd meeting of the Interim Joint Committee on Economic Development and Tourism was held on<Day> Thursday,<MeetMDY2> October 13, 2005, at<MeetTime> 10:45 AM, at the Kentucky Horse Park, Lexington, Kentucky<Room>. Senator Alice Kerr, co-Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Alice Kerr, co-Chair; Representative Eddie Ballard, co-Chair; Senators Julian M Carroll, Julie Denton, Brett Guthrie, Denise Harper Angel, Ray S Jones II, Jerry P Rhoads, Richie Sanders Jr, Katie Stine, and Jack Westwood; Representatives Carolyn Belcher, Joe Bowen, James Carr, Perry B Clark, Jesse Crenshaw, Jim DeCesare, Mike Denham, Ted "Teddy" Edmonds, Jim Gooch Jr, Mike Harmon, Mary Harper, Dennis Horlander, Dennis Keene, Thomas Kerr, Gerry Lynn, Brad Montell, Fred Nesler, David Osborne, Ruth Ann Palumbo, Brandon D Smith, John Will Stacy, and Mike Weaver.


Guests:  Derrick Ramsey, Deputy Secretary, Kentucky Commerce Cabinet and John Nicholson, Executive Director, Kentucky Horse Park.


Legislative Guest:  Representative Adrian Arnold.


LRC Staff: John Buckner, Committee Staff Administrator; Karen Armstrong-Cummings, Lou Pierce, and Dawn Johnson.


John Nicholson, Executive Director of the Kentucky Horse Park outlined the plans for construction of a new indoor arena.  He said the Horse Park is a success for the state due to the support of the General Assembly. In its 28th year, the Horse Park generates $164 million annually including $14 million that is returned to the general fund each year.  Mr. Nicholson said this does not include the economic impact of the 26 organizations, employing 270 people, located at the Horse Park. He said most would not be in Kentucky if not for the Horse Park. He said 900,000 people annually use the park including 300,000 tourists and 400,000 participants in the 60 competitive horse events the park hosts.


Mr. Nicholson said components of the Horse Park include the International Museum of the Horse, a permanent exhibit which featured two successful events--The Role of the Horse in China's History exhibit in 2000, and The Role of the Horse in British History exhibit in 2003--two of most comprehensive international cultural exhibitions to come to Kentucky.  Other components include numerous outdoor shows, carriage rides, horse rides, and a very successful campground facility which needs expansion.


Mr. Nicholson said that Kentucky finished a strong runner-up for the 2006 World Equestrian Games and is considered to be the leading candidate for the 2010 Games.  Referring to a handout, Mr. Nicholas explained that the event will last over two weeks, attract over 300,000 people, and will be broadcast live to 40 countries, bringing in 1,000 international media representatives.  The decision of who will be awarded the games will be made in December. If chosen, the next 4 1/2 years Kentucky will be recognized internationally for the 2010 World Games, providing extraordinary international exposure. Quoting former Commerce Cabinet Secretary Jim Host, he said it would be "by far the largest single event ever to come to Kentucky in terms of impact and recognition."


Mr. Nicholson said the central component to the bid for the World Games is a new indoor arena. The 2005 budget appropriation of $1.5 million took the project to Phase C. Within the next 3 or 4 weeks the project will be completed through phase C, which includes construction documents. He noted that currently Kentucky cannot compete for large international events, which are instead being awarded to Tulsa, Oklahoma; Fort Worth, Texas; Perry, Georgia; and Columbus, Ohio. He said the 6,000 seat proposed arena will be climate-controlled and include all the amenities necessary such as box seats. He said the arena is essential for the continued viability of the Horse Park.


Referring to the hotel to be built at the Horse Park, Mr. Nicholson explained that it is a public/private sector partnership modeled after the Kentucky Fair Grounds arrangement. The company selected, Cole Development of Dallas, Texas, is negotiating financial terms within the scope of the bid. How the operations will occur and the percentage the Horse Park will receive has been agreed upon. Currently, they are following the guidelines for the Tourism Development Act to receive economic incentives.


Mr. Nicholson pointed out that roads at the Horse Park are the same as when it opened. In 2002, a study concluded that the roads need to be widened, better maintained, and some additions made to handle the increased traffic now and for future events. The Horse Park is seeking $4.3 million for the roads project based on the study's findings.


Mr. Nicholson said another capital project included in the design is an expansion of the campgrounds to include an amphitheater, which has been suggested by the community for cultural events such as Picnic with the Pops, the Lexington Philharmonic Orchestra. It would be a joint partnership with the Fayette County urban government.


Mr. Nicholson said that in 1999 and 2000, 200 acres were purchased for the Horse Park through the Finance Cabinet's Land Acquisitions Fund. This made it possible to quickly purchase land that was contiguous with the park. He said currently there are four parcels of land that may be on the market in the future and the park needs to be prepared.


Mr. Nicholson thanked the committee for their continued support and urged support on the proposed projects to attract the International Games and other events.


Mr. Ramsey added that it would be the first time the Games would be held in the United States. He said the Federation Equestre Internationale (FEI) was interested in Kentucky's branding initiative and has sought advice on how to brand the FEI Games for the first time. He said the campgrounds are outdated and are being bypassed because of lacking facilities. Mr. Ramsey said the overall economic impact of the arena will be tremendous.


There being a quorum, a motion was made by Senator Guthrie with a second by Senator Denton to approve the September 15, 2005, minutes. Motion carried by voice vote.


Senator Westwood asked if there were any funds left in the Land Acquisition Fund.  Mr. Nicholson said he did not know. Senator Westwood said this might be something the committee should take up as well as a first refusal agreement with the contiguous property owners in the event the land was up for sale.


Senator Carroll expressed concern for whether the state had done everything it could to be awarded the FEI Games. He said the Games would be an enormous event for the state and possibly a one-time event in the United States. He said with the arena, the Horse Park is the only place internationally where all of the events could be held on one site. He said he was also concerned with the park's roadways. He asked what the committee could do to convince the FEI that the state supports the arena. Mr. Ramsey said that, when asking the FEI what it would take to be awarded the games, he was told that the state is online for what the FEI needs. Mr. Nicholson added that the FEI has been impressed with everything. He said a petition indicating a commitment to build the arena would be helpful. Senator Carroll made a motion that the committee authorize drafting a petition by the Legislative Research Commission and encourage the members of the General Assembly to sign it. He noted that France is the only competition for the 2010 Games. Representative Harper made a second to the motion. Senator Kerr said she and Representative Ballard would like to take consider the issue at the November meeting. Senator Carroll expressed concern that the FEI would make its decision in December not allowing enough time.


Representative DeCesare asked if the games would be awarded to Kentucky without the outcome of the 2006 GA session. Mr. Nicholson said there is no way to say conclusively.  Representative DeCesare said he felt uncomfortable signing the petition in lieu of all other issues faced in 2006 such as Medicaid and retirement. Representative DeCesare asked if the road funds request was up to date.  Mr. Nicholson said yes.


Representative Belcher asked if the seating capacity of the arena was expandable. Mr. Nicholson said the arena allowed for additional seating and has a multipurpose function for events other than equestrian. Representative Belcher stressed that the arena would not be for a one-time event.  She said the improvements would open the door for many more equestrian events such as the World Quarter Horse Show.


Representative Stacy noted that the budget process begins with the governor's recommendations and asked if Mr. Ramsey or Mr. Nicholson had been involved in this process for this project specifically. Mr. Ramsey said he had not been involved to date but he would be from this point on. He said Secretary Host had spoken to the governor about what was necessary to be awarded the games. Mr. Nicholson added that during his last conversation with Secretary Host he said the arena was very high on the capital list that the governor was going to propose.


Senator Kerr asked for a roll call vote on the committee sending a letter to the FEI voicing their support of the recommendation.


Representative Carr asked about the $90 million impact of the arena. Mr. Nicholson explained that it was derived from a formula used by the Department of Tourism to determine the economic development of events based on attendance and length of events.


Senator Kerr read the motion of the committee that the committee "express its support for the development of its proposed arena, the recommendation that the project should go forward in the budgeting process."  The motion was approved by roll call vote.


There being no further business, the meeting adjourned at 11:50 AM.