Hambo Reverses the Ark Transfer

A few days ago we reported Hambo May Lose $18 Million Sales Tax Kickback. As you recall, in an effort to evade the safety tax of fifty cents imposed by the city of Williamstown for every admission ticket sold by Ark Encounter, the company sold its main parcel of land — the one with the life-size Noah’s Ark — for $10 to their non-profit parent company, Crosswater Canyon.

That transfer was obviously because the city’s safety tax doesn’t apply to non-profit entities. Smart move! However, Ken Ham (ol’ Hambo), the ayatollah of Appalachia, the world’s holiest man who knows more about religion and science than everyone else, was then informed that because of the transfer, the Kentucky Tourism Arts and Heritage Cabinet decided to suspend an incentive agreement worth up to $18 million in sales tax kick-backs.

Now the Lexington Herald-Leader of Lexington, Kentucky has this headline: After state suspends tax break, Noah’s Ark park transfers land back to for-profit entity. Here are some excerpts, with bold font added by us for emphasis:

Three days after state tourism officials suspended an $18 million tax incentive, officials at a Noah’s Ark theme park have sold their main parcel back to their for-profit entity for $10.

BWAHAHAHAHAHA! Let’s read on:

Ark Encounter officials have declined to say why they sold the property in the first [place], but the move in June coincided with their refusal to pay a safety assessment tax levied by the city of Williamstown. City officials worried that the sale might be the first step in the ark park claiming non-profit status, which would exempt it from property taxes.

Jeepers — could there have been a connection? The newspaper doesn’t speculate about Hambo’s motives, so we won’t either. They tell us:

But on July 18, state tourism officials said the land sale breached the sales tax rebate incentive agreement, which was with Ark Encounter LLC, not Crosswater Canyon. On July 21, the parcel was switched back to Ark Encounter LLC, again for $10.

It could be merely a coincidence. The news continues:

On Monday, Mark Looy, the co-founder of Answers in Genesis, the parent body of both Ark Encounter and the Creation Museum in Petersburg, said the group needed “to keep our options open to protect the organization for the future,” but did not explicitly explain the two property transfers.

Maybe there’s nothing to explain. One last excerpt:

Williamstown Mayor Rick Skinner has said that the city council would like to talk more with Ark officials, but so far, the two sides have not met. … Neither state tourism officials nor Skinner were immediately available for comment on Monday.

Perhaps we’ll never know what motivated the ark’s boomerang transactions. There’s one thing we do know, however — Hambo is motivated only by the holiest of motives, so there must have been a deeply spiritual reason for what happened.

Copyright © 2017. The Sensuous Curmudgeon. All rights reserved.

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9 responses to “Hambo Reverses the Ark Transfer

  1. craigshearer

    One would hope that the reversal of the transfer of land doesn’t automatically re-qualify them for the tax rebate and that they have to apply again.

  2. @craigshearer

    “If the property is deeded back to the for-profit entity within 30 days, the tax incentive will be restored, said Laura Brooks, spokeswoman for the tourism cabinet.”

    http://www.courier-journal.com/story/news/2017/07/21/ark-park-violation-deal-over-18-million-state-tax-breaks/500245001/

    Sorry.

  3. I’m sure the IRS will be very interested in the sale of $48M of land for $10. I believe you have to pay tax on the value of the land, not the amount paid. I’m also sure they don’t care if you went and sold it back to yourself.
    Taxing himself twice. Go HAMMY!

  4. I don’t get it.

    Looking at numbers only, disregarding questions of perception and bad press:

    As The Curmudgeon himself pointed out on the 12th, Ham will get a 60-cent sales tax rebate for every adult ticket sold ($40 x 6% tax x 25% rebate). The rebate for each $28 kids’ ticket will be 42 cents.

    Compare this to the 50-cent per ticket safety tax. Pretty much a wash, don’t you think?

    (Except, of course, the sales tax rebate is capped at $18 million over ten years; there would be no ceiling on the safety tax assessment. Which is probably moot, since no serious observer expects the Ark to bring in the number of paying visitors that would max out the sales tax rebate — that would be an average of about 3.6 million visitors per year for ten years.)

    So what don’t I get — what’s the elephant in the room?

    Grant County property tax.

    As a for-profit venture, the Ark will be liable for the property tax; as a religious non-profit, it would be exempt.

    The Grant County Property Valuation Administrator has valued the Ark’s property at $48 million. Say that the property tax is a little over 1% — that’s around a $500,000 annual tax liability Ham has agreed to re-assume by the Ark abandoning its (short-lived) non-profit status.

    So, the recent sale takes the Ark from a $0 tax rebate-$0 safety tax/$0 property tax non-profit status to a $0 tax rebate-$0 safety tax (it’s a wash)/$500,000 property tax for-profit status. Every year for ten years, then the sales tax rebate goes away.

    Like I said, I don’t get it — what am I missing?

    * * * * *

    Okay. I think I get it.

    The Ark won’t be paying the county only property tax of 1.038% — they’ll probably be paying the 1.721% Wiiliamstown City/School tax.

    That WOULD BE around $826,000, EXCEPT that 75% of Ark Encounter’s real estate taxes for the next 30 years will be going toward repayment of the interest-free Tax Increment Financing. Instead of that money going to the city, it’ll be used to repay the $62 million in bonds that helped finance the Ark’s construction.

    So it’s a net tax hit of about $200,000 a year rather than $500,000, and the sweet-heart deal for TIF repayment is not threatened.

    (Plus, the sales tax rebate also applies to sales of souvenirs and food, tilting the decision to taking the tax rebate and paying the safety tax rather than forgoing/avoiding both — it’s no longer a wash.)

    I guess.

  5. Since it seems to be rather cheap, can _I_ buy the Ark Park? I’ll even pay $ 20 for it, twice the apparent market value!

    As for the fate of my newly-acquired Ark, I’m not quite decided. The main alternatives are “casino” and “really nice bonfire.”

  6. hnohf, do be careful when burning your Ark, if you go that route. If it’s like 90% of them (including Ham’s), it has a lot of concrete and steel inside it, and those behave poorly in hot, hot fires.

  7. Eric Lipps

    Williamstown Mayor Rick Skinner has said that the city council would like to talk more with Ark officials, but so far, the two sides have not met. … Neither state tourism officials nor Skinner were immediately available for comment on Monday.

    No kidding. Tax fraud is a serious matter.

  8. Eric Lipps: “Tax fraud is a serious matter.”

    Put up or shut up.