Ark Encounter theme park gets 75% cut on property tax

Posted Monday, August 8, 2011 10:46 PM | Contributed by Jeff

The city of Williamstown in Grant County has agreed to give a biblically themed amusement park a property tax discount of 75 percent over the next 30 years. Mayor Rick Skinner said the offer is laid out in a memorandum of agreement that will be followed by a formal tax-increment financing deal with Petersburg-based Ark Encounters LLC in coming months.

Read more from The Herald-Leader.

Monday, August 8, 2011 10:53 PM

Generally speaking, I'm OK with tax abatements and deals like this, as there are a great many cases where the resulting economic development benefits the constituents of that particular jurisdiction. That said, this makes me uncomfortable. Even if it is a for-profit organization, it openly has a very religious mission. If you consider a tax break something of a subsidy, this may in fact be unconstitutional.

How long before we see a court challenge?

Monday, August 8, 2011 10:55 PM

I've always wondered what the fascination is with building a replica of Noah's Ark. It seems like a lot of wackos are doing it.

Judging by the photo, this park looks extra lame.

Monday, August 8, 2011 10:56 PM

That was my very first line of thinking. I mean, if someone wanted to open a park with a theme centered around Mecca, would they get the same tax break?

edit: added the word "theme"

Last edited by Raven-Phile, Monday, August 8, 2011 10:59 PM
Monday, August 8, 2011 11:42 PM

Even if you want to refer to them as wackos, there are probably a lot more of them willing to spend a lot of money than there would be going to a Mecca-themed park. Of course, most true Muslims would consider building a replica of Mecca blasphemy, so they wouldn't support it at all.

You may not agree with the message, or even like the target audience. But this project is likely to make more money than a lot of other projects that have been given tax breaks and incentives.

Tuesday, August 9, 2011 12:21 AM

I doubt it. It's in Nowhere, KY. If Louisville can't support Kentucky Kingdom, what shot does this have?

Tuesday, August 9, 2011 12:58 AM

While I'll agree with you that this park will probably fail bigtime, I thought that Kentucky Kingdom's demise had to do with the local government messing it all up, and not that the park was having financial problems.

Isn't Beech Bend in nowhere KY? It seems to be doing well.

Tuesday, August 9, 2011 2:53 AM

Does this remind anyone of Heritage USA in Fort Bend, SC?

Tuesday, August 9, 2011 8:26 AM

I'm not so sure if this park is pushing religion more so than they are building a park that is themed around a couple of stories out of the bible. It's not much different from other theme parks out there that tell a story or have themed areas. Since christian religions base their teachings on the bible I can see where this might be a fine line whether or not the local government should be giving it a tax abatement.

I'm in the wait and see crowd to see how this plays out. I'm not sure if there's much room for a new theme park these days. The theme doesn't exactly excite me.


Tuesday, August 9, 2011 11:10 AM

1. Is this what Jesus would do?

2. I am already calling this project "Hard Rock Park 2: The Revenge."

Tuesday, August 9, 2011 11:44 AM

HeyIsntThatRob? said:
I'm not so sure if this park is pushing religion more so than they are building a park that is themed around a couple of stories out of the bible.

Now that I think about it more, a park themed to bible stories would be kind of cool, as long as they didn't push religion down people's throats. Kennywood's Noah's Ark comes to mind.

Being a Christian myself, I see how the religion pushes people away rather than includes them. Being preachy makes some people uncomfortable. If there were a theme park experience that allows people to find God on their own terms and at their own pace, I'd be for it.

But I don't think that this park has a chance in Hell even getting built. lol

Tuesday, August 9, 2011 3:06 PM

Jeff said:
I doubt it. It's in Nowhere, KY. If Louisville can't support Kentucky Kingdom, what shot does this have?

Williamstown is right off I-75, not that far from Cinci. Not quite as close to nowhere as Elysburg or Santa Claus. The state is part of the Bible Belt, surrounded by other states that are part of the Bible Belt. If they market it as a destination park to the evangelical Christian community, and partner with the right people, it will draw them from all across the south and midwest. There are millions of them, and they're not all dirt poor. Maybe there's a niche there that hasn't been targeted by the other parks. Time will tell.

Tuesday, August 9, 2011 5:43 PM

The Creation Museum seems to do surprisingly well despite its $25 admission price, so there is apparently seem level of demand for this sort of thing. Whether or not that could sustain an entire park remains to be seen but the potential is there.

Tuesday, August 9, 2011 7:26 PM

In general, tax credits like this are a good incentive for economic growth. In pure form the government risks none of the peoples’ money. As this land stands now, undeveloped, there is little to nothing in terms of tax revenue. Develop a project like this and 25% of the normal rate is much greater than status quo. It would be hard for anybody to be against such an incentive on an economic basis. If the project fails, the government still comes out ahead.

I’m not certain this is a strict tax credit transaction though. The article indicates $200,000 of tax payer funding was already utilized as well as the possibility of government being on the hook for another 11 million in road improvements. They also snuck in there that 75%-80% of the funding was found in the private sector. This translates into “we need to come up with another 20%-25% by any means necessary. This typically means taxpayer backed bonds (see Pippen). These parts of the stories are hinting at subsidies (see corporate welfare) not tax credits. I go back to my opinion that government agencies should not be risking any taxpayer funds to build amusement parks. If this is a viable project, then it should easily be 100% funded in the private sector with parallel government tax credits.

As for the constitutional aspect… I doubt this is a constitutional (at least federal) issue.

• “Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof.”

Separation of church and state is a legal debate with differing decisions, but it is not a constitutional debate. Jefferson is credited with coming up with the separation concept, and his writings have indeed influenced court decisions. But these types of suits/disagreements are certainly not decided on the language our founders utilized in the constitution itself. Like most issues, it comes down to justice politics/opinions. Now the Kentucky State Constitution MAY have a more restrictive religious clause than our federal constitution…I’m not well versed on specific Kentucky Statutes.

I’m not saying some sort of religious claim would/could not be brought at the federal level based upon the constitutional clause. I’m just giving the opinion that if such a case is brought, it would fail at the federal constitutional level (probably 5-4 like so many of these issues have before). It is much more likely to succeed at the state level.

Tuesday, August 9, 2011 8:54 PM

I'm totally confused at the notion that "entitlements" that we citizens pay into are somehow the bane of our esteemed corporatocracy, yet subsidies and tax breaks like these are deemed "essential for business growth".

Is it OK to go into debt because we fail to raise revenue? Is it OK to "spend" tax dollars on something like this? Seriously, I'm perplexed...

Tuesday, August 9, 2011 10:48 PM

And that's exactly why the debt discussion goes nowhere. No one is willing to admit that it will take both cuts in spending and tax increases.

Aamilj said:
In pure form the government risks none of the peoples’ money.

Except the revenue that isn't collected. See Bill's comment.

Tuesday, August 9, 2011 11:44 PM

rollergator said:
I'm totally confused at the notion that "entitlements" that we citizens pay into are somehow the bane of our esteemed corporatocracy, yet subsidies and tax breaks like these are deemed "essential for business growth".

I am not going to touch the general deficit/debt debate in this place with a 500 foot launched coaster pole. But, with respect to the tax abatements/rebates in this case, without the project, there would be no property taxes, sales taxes, etc. With the project you will have employees paying income taxes, what isn't abated/rebated with respect to property taxes and sales taxes, etc. So the city/county can be better off (if they get the numbers right in terms of the levels of incentives compared with increased costs on city/county services) with having the project move forward with the tax abatements/rebates than it would be without it. And if the project fails, the city/county isn't out any money as it would be with a loan.

Now in the instant case, there appear to be some up front costs as noted above. And unfortunately, politicians and proponents of various tax assisted projects tend to both overstate the benefits of a project and understate the costs of it. I haven't seen a study that was conducted by anyone other than a sports team owner that indicated that tax supported sports venues are a net gain for the city/county/state. Same is true from what I have seen of Ohio's recent foray into tax credits for the movie industry.

Wednesday, August 10, 2011 6:55 PM

A tax credit and a subsidy are not the same. A subsidy takes money already collected and hands it to another party. A subsidy has a real cost to the taxpayer.

The tax credit has no real risk to the taxpayer. For this example, 25 percent of the new property values is 25 percent more than the taxpayer otherwise would have received. No money was taken out of the taxpayer account subsidize anything. There is a net gain to the account for the taxpayer.

I don't know about you, but if somebody offered to pay me 25 percent of all monies they collected at a new business, I would be a happy camper. I certainly wouldn't complain that they were not giving me the other 75 percent. This is a pretty close analogy of what happens with tax credits. People who do not understand how it works tend to focus on the other 75 percent.

Bear did a nice job explaining how the 25 percent property tax is just the tip of the iceberg in terms of different tax revenues governmental agencies can receive.

Thursday, August 11, 2011 12:09 AM

The only thing that's different in your description is timing. Whether the tax isn't collected before, or money is given after, it's a subsidy either way. Claiming they're different is temporal dishonesty.

Thursday, August 11, 2011 12:17 AM

^Thanks....something was preventing me from typing that very response.

Besides, all of our budgets depend on income and expenditures. Decreasing income will lower our balance JUST as fast as spending that income....dollar for dollar. If we were able to overcome the Grover Norquist pledge and actually raise some tax revenue in addition to whatever cuts are made in defense and social spending, then our deficits would drop - and the bond ratings and stock markets would re-stabilize. The (lack of) taxes is 50% of the equation....period. Spending is the other half....but right now it seems to be the only part anyone is willing to seriously discuss in terms of budget impact.


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