To say the funding on Ken Ham‘s biblically themed Ark Encounter amusement park has been vague would be an understatement. After losing $18.25 million in sales tax incentives for discriminatory hiring, it seems clear why Answers in Genesis wouldn’t want Kentucky taxpayers to know what we dug up.
Last month, I attended a Northern Kentucky Chamber of Commerce meeting where Ham and his Answers in Genesis board members were presenting the latest news and projections for their Ark Encounter project. Like most of us who have been monitoring the project funding, I was curious to catch some insight about the massive gap that exists between donations collected and total amount needed.
During the hour-long spiel that could best be described as an Ark Park pep rally, Ham rattled off hyped attendance projections and encouraged anyone with investment money to snatch up nearby commercial land. I learned that the construction was well under way in Williamstown, a rural area 45 minutes south of the Creation Museum, where the ministry had purchased 800 acres of land. He talked about the ark’s dimensions, the source of the timber being used, and other trivial notes — but barely touched on the topic of funding sources. Sandwiched somewhere in his tourism excitement, he breezed by the words “TIF district,” but said his lawyers really knew more than him, and quickly moved on. That’s when my ears perked up.
It wasn’t until the Q&A that an attendee asked if Ham could say more about the funding. Ham said the first phase of the project required $91.5 million before opening for business. To date, around $24 million has been raised in donations, an undisclosed amount has been made off of selling lifetime admission packages called “Boarding Passes,” and there’s $62 million in bond offerings. (Whether he had sold all those bonds wasn’t clear from his remarks.)
Around the time he debated Bill Nye on evolution in early 2014, Ken Ham was heavily pushing the sale of Ark bonds, and many speculated the timing of the debate was strategically coordinated to promote them. There were no follow ups at the recent event to say the bond sales were a success, and it remained a grey area for those of us trying to identify where the funding was coming from.
This is where the TIF comes in.
What is a TIF?
I myself was unfamiliar with TIF districts until a few weeks ago. But let me attempt a simple explanation: TIF stands for “Tax Increment Financing” and they’re usually issued in urban areas that are considered “blighted.” For example, suppose there was an abandoned shopping mall in a deteriorating community. A TIF can be set up to attract developers whose businesses may revitalize the area. The district officials could, for example, give the developers interest-free loans to build their project based on what they expect they can retrieve in property taxes over the next 30 years. That’s it. The developers don’t have to do anything differently from if they hadn’t been issued the TIFs at all. But now, rather than the property taxes going back to the community, the tax revenue is diverted to pay off the loan.
This can be a great help to the local economy if the development is a long-term success — it’s money well invested. The downside is, if the new developments fall short of projections (or fail entirely), the developers aren’t held liable for repayment and the burden of debt falls on the investors and taxpayers.
TIFs are controversial for a number of reasons and they’ve been discontinued in California, the first U.S. state to implement their use, because of the numerous lawsuits they led to (not to mention other unintended consequences).
Ark Encounter is being funded by a $62 million TIF.
It turns out the majority of Ark Encounter is being funded by a TIF granted by the City of Williamstown, Kentucky. On November 1, 2012, a Memorandum of Agreement (begins on page 55) approving $62 million in funding for Ark Encounter, LLC was signed by officials of Williamstown and the County of Grant.
It said that, over a 30-year period, 75% of Ark Encounter’s real estate taxes would go toward repayment of the interest-free TIF. So instead of that money going to the city (and the citizens), it’ll be used to repay those bonds.
Also — pay attention to this one, potential Ark Park staffers — all employees working within the TIF district (that is, Ark Encounter) will pay a 2% job assessment fee on gross wages. In other words, $2 out of every pre-tax $100 dollars you make will go directly to paying off the for-profit Noah’s Ark attraction.
According to Section VIII of the Memorandum of Agreement, in addition to the $62 million, the city and county agreed to other incentives (courtesy of local taxpayers):
$175,000 would be given to Ark Encounter to reimburse the amount they felt the property was overvalued.
$19,000 would go to Ark Encounter’s real estate agent, representing 2% of the total purchase price of the land.
98 acres of Grant County land would be sold to Ark Encounter for $1 (yes, one dollar).
Ark Encounter, LLC is a for-profit controlled by a non-profit.
To shed some light on how Answers in Genesis is able to siphon money from every direction, let’s look at a few of the legal gymnastics taking place:
Crosswater Canyon, controlled by Answers in Genesis, is a non-profit that owns and operates two for-profit companies, Creation Museum, LLC and Ark Encounter, LLC. All donations for the project come in through the non-profit Crosswater Canyon, but all the tax incentives are applied to the for-profit Ark Encounter, LLC.
The literal Ark itself is the only non-profit portion of the attraction. So all the tax deductible donations people make are applied to the construction of the Ark, which qualifies as non-profit because it is an “educational tool.”
What about the land surrounding the Ark? That’s not technically part of the non-profit part of the park, so your donations wouldn’t apply there… but that’s why visitors will have to pay to park their cars (800 acres of land, and Ken Ham wants to charge people to park) and then pay admission to satisfy the business portion of the attraction.This separation was evident in an old FAQ that no longer appears on the Ark Encounter website:
The bulk of the Ark Encounter will be built by the limited liability company (LLC). The Ark structure itself will be funded through donations.
The for-profit LLC structure also allows the Ark Encounter to be eligible for various economic development incentives that would not have been available with a non-profit structure.
Now that we know the specifics, we can decode Ham’s careful wording when he says, “No unwilling taxpayer will subsidize the Ark.” He’s being truthful, as well as disturbingly deceptive. It’s true the Ark replica itself is being built entirely on donations. But taxpayers will absolutely pay a price through the subsidies for the land and the 75% property tax break he gets for the next 30 years.
Ark Encounter is still discriminating in hiring.
After Americans United busted Ark Encounter earlier this year for violating church/state separation by requiring a statement of faith from employees while accepting state tax incentives, they went tight-lipped on the hiring process. Currently on the Ark Encounter website you are not able to apply for employment. But with a bit of digging through individual job listings, I was able to find four positions for the Williamstown project site, which is included as part of the TIF, requiring applicants submit a “commitment to grow the outreach of Answers in Genesis,” “Salvation testimony,” “Creation belief statement,” and “Confirmation of your agreement with the AiG Statement of Faith.”
Now that those two things are clear to us — the project has drawn public funding and they’re still discriminating in hiring — are we still dealing with a church/state conflict?
It’s also worth noting that, in a 2011 Williamstown public listening session to present Ark Encounter to the city, AiG general manager Mike Zovath was asked by a resident if Grant County citizens would get a first crack at the new jobs.
“We would like to hire local folks, but we have to follow state and federal laws regarding hiring and are not able to give preferential treatment. That would be considered discrimination. If you’re qualified, apply for a job.”
Zovath makes a blatant acknowledgment of state and federal laws, encouraging all to apply because they won’t be discriminating. But according to the job postings we found, he was either being dishonest or is willfully breaking the law as he understands it.
It’s unfortunate for the residents that the very business storming into their community and using local funding for private leverage won’t even hire them unless they’re a very specific type of evangelical, anti-science Christian.
The false tourism projections are still a problem.
It’s been reported before that the numbers Ken Ham is using to sell government officials on the Ark are based on false projections.
In 2011, Hunden Strategic Partners gave a presentation to the Kentucky Tourism, Arts & Heritage Cabinet regarding their Ark Encounter attendance projections for the first 10 years. It included two options on how the park would be presented.
Scenario A presented the park without the Creationist view of biblical events that might turn off a portion of the potential market. A “Noah’s Ark” theme park, without the evangelizing, could draw in a lot of people, they said.
Scenario B presented a park much like that of the Creation Museum, on the timeline of a 6,000-year-old Earth and promoting a specific literal interpretation of Biblical events. This would appeal more to evangelical Christians while alienating many others.
The best-case Scenario A brought in between 500,000-700,000 visitors in a good year. But I think we all know Ham decided to go with Scenario B, which was predicted to attract just over 425,000 people in its best year.
And yet, as recently as last month, when I attended the Kentucky commerce meeting, Ken Ham was still touting his privately researched attendance projections of 1.2 – 2 million attendees in the first year.
The City of Williamstown, Kentucky could be in trouble
Williamstown is fairly quaint with little development and a population of around 4,000. It’s the halfway point between Cincinnati and Lexington, so it’s quite rural. The median age of residents is 35, there are nearly 1,300 households, and 26% of residents are under the age of 18. There is one elementary school, one middle school, and one high school (whose mascot, ironically, is a “Demon”). There is no notable tourism or industry draw right now… that is, until late next year when Ark Encounter plans to open up to the public.
Based on Ark Encounter’s (exaggerated) projections, Williamstown is preparing for a massive influx of visitors and new residents. As stated on page 1 of The City of Williamstown’s 239-page 2012 Master Plan:
In response to the impact that [Ark Encounter Park] could have upon the city, the Williamstown City Council decided to create its own master plan and ask Grant County Planning Commission to adopt it as an update to the Williamstown section of the current plan.
In the link above, the plan details road improvements, including $11 million in highway widening on I-75 (at the Ark Encounter exit) to accommodate expected traffic to the park (p. 104). Other improvements include developing parks and recreation, beautifying all areas, increasing housing options, creating a visitor center, developing local businesses that would appeal to the tourists, and identifying niche markets that complement the visitor demographics of Ark Encounter and growing those markets.
I couldn’t find a total cost for the city’s budget, but looking at the plan, a large amount of public money is being used in an effort to boost businesses around Ark Encounter. You have to wonder what’s going to happen to this town after the niche amusement park fails to meet the exaggerated attendance numbers. Between the park and the city, there are supposed to be 3,000 new jobs created (p. 11) — a number greater than the population of the city’s working-age residents. It’s natural to assume that many new residents will flock to the area for employment, in turn forcing the expansion of schools, the hospital, emergency services, etc. It’s a major swell and the city has all its eggs in one basket: Ark Encounter being a success.
Ark Encounter couldn’t succeed in the private market; they demonstrated this by not being able to raise enough money without taxpayer support. To date they’re still struggling to raise the full $30 million they need to complete Phase 1, evidenced on the homepage of their website. It seems Grant County and Williamstown have thrown caution to the wind at the expense of their community.
We welcome more information if anyone has a piece of the puzzle to contribute or correct. We’d especially like to hear from residents of Grant County and find out if they’re at all apprehensive of the development.
Specifically, we’d still like answers to these questions:
- Is requiring a statement of faith for employment on land funded by a TIF and other public monies a violation of church/state separation?
- Is local development being scaled back now that it’s been brought to the attention of the public that the tourism projections were greatly exaggerated?
- Who is being held responsible for the $62 million in TIF bonds if Ark Encounter defaults?
- Is it fair to pardon Bill Nye for giving Ken Ham a publicity boost now that we know the bond was already issued before the debate?
Okay, you can skip that last one.
As a Humanist, I’m greatly concerned the residents will be left to flounder in the flood of debt. As a secularist, I’m pissed off that the public’s money is being spent on an unabashed religious ministry. As a skeptic, I’m suspicious of why the TIF wasn’t common knowledge. And as a science enthusiast, I’m aghast that this is a conversation we’re having in the 21st century.