Tax incentives sought for Noah's Ark theme park

FRANKFORT, Ky. – Ark Encounter will return to Frankfort on Tuesday to seek — for a second time — state approval of tax incentives for its proposed Noah's Ark theme park in Grant County.

Three years ago, the group won approval of incentives for its entire $172.5 million project, but because of funding problems it withdrew that application and now is seeking approval for a $73 million first phase of the biblical theme park.

And it expects preliminary approval Tuesday from the Kentucky Tourism Development Finance Authority and plans to break ground next month.

"We can begin construction as soon as we get preliminary approval," said Mike Zovath, Ark Encounter's project coordinator. "And we expect to get that because the project fits all the criteria for the tourism act."

Ark Encounter is applying to participate in a program that allows eligible tourism attractions a rebate of 25 percent of the sales tax they collect on admission tickets, souvenirs, food and other things over 10 years. For this application the rebates would be as much as $18.25 million.

The incentive program's rules say that if preliminary approval is granted, the authority would then select a consultant — at Ark Encounter's expense — to study the project to see if it meets the program's criteria, including that the project get at least 25 percent of its visitors from out of state after four years and having an overall positive impact on the state budget.

After the consultant's analysis is complete — a process that takes six to eight weeks — the authority would meet to consider final approval.

Ark Encounter, a venture of Answers in Genesis, which developed and runs the controversial Creation Museum in Boone County, cleared all of those hurdles and won final approval from the authority in May 2011 for its entire proposal. Under the incentive program's rules, it had three years to start work.

But as that deadline approached, it withdrew its application for the entire park and re-applied — seeking approval of just the $73 million first phase.

The project was delayed, Zovath said, "because funding was slower than we'd anticipated. It was all about funding." Sufficient financing was in hand by early this year for the first phase, he said. Construction of other phases on the 800-acre site is still planned over the next 12 years.

Zovath emphasized the first phase includes the feature that consultants say will draw the crowds — the 510-foot wooden ark. "That's the main feature, the main attraction," Zovath said.

He said the park will open about two years after construction begins. "We should open mid-summer of 2016," he said.

Answers in Genesis embraces a literal interpretation of the book of Genesis and a belief that the Earth is only 6,000 years old — a view that runs counter to science. As a result, the Noah's Ark theme park has drawn criticism that the state incentives, as well as a $10.25 million project put into the state road construction plan to improve the state road between I-75 and the park, violate the constitutional requirement of separation of church and state.

"It's a religiously themed project with potentially evangelical overtones, and therefore it would erode the separation of church and state for it to receive any money from the taxpayers," said Sarah Jones, spokeswoman for the Washington-based Americans United for Separation of Church and State.

Asked if the group plans to take the matter to court, Jones said, "I can't comment about the possibility of any potential legal action."

Zovath said in response to such critics, "The state isn't endorsing anything by incentivizing an attraction to bring tourism dollars into the state."

Gov. Steve Beshear has supported the project. Regarding the new application to be considered Tuesday, Governor's Office spokesman Terry Sebastian said, "The project will receive the normal review of the authority, and we wish the project success in bringing tourism and economic activity to northern Kentucky."

Local officials are on Ark Encounter's side of the debate.

On May 1 Williamstown Mayor Rick Skinner, Grant County Judge Executive Darrell Link, state Sen. Damon Thayer and state Rep. Brian Linder attended a ceremony at the Creation Museum launching phase one of the ark project.

The consultant that analyzed the project's initial application in 2011 estimated the park would draw 871,383 to 1.24 million visitors per year by its fourth year. That analysis also forecast the project would have an overall net positive impact on the state budget of $65 million to $119 million over 10 years, even after accounting for the incentives.

"I'm certainly a big supporter of Ark Encounter," Link said. "If they wanted to build a replica of Donald Duck and it would bring in 5,000 people a day I would be just as eagerly supporting Donald Duck as I support the ark. But people don't relate to Donald Duck like they do this age-old story of Noah."

The first phase of the project is being financed with a combination of donations and proceeds of a municipal bond issue of Williamstown.

The Ark Encounter website says $14.8 million has been raised so far toward a goal of $29.5 million.

Last year Williamstown offered $62 million in bonds on behalf of the Christian group. The city isn't responsible for repaying the unsecured bonds, which are to be repaid from park revenues. Partly because of a lackluster response to the offering, the bond sale was extended late last year.

Zovath said, "We needed to hit a certain target — about $45 million in project funds from the bonds. ... We hit that target in late February." In order to reach the target, Zovath said Answers in Genesis itself bought "probably between $2.5 million to $3 million" of the bonds.

He said, "We continue to raise money with donations. And we know from our experience building the Creation Museum that once people see that it's actually happening that we'll start getting a lot more donations."

Reporter Tom Loftus can be reached at (502) 875-5136. Follow him on Twitter at @TomLoftus_CJ.