Ark Encounter’s $18 million tax rebate suspended after selling its land to its non-profit entity

Image: YouTube screen capture

It’s not secret Ken Ham does not understand numbers, but it seems he was hellbent on proving this by screwing himself out of a potential $18 million in tax rebates to save himself $700,000.

Last week, I reported that Ham sold the Ark Encounters land, which was owned by the for-profit theme park to his non-profit entity, Crosswater Canyon, for the grand sum of ten dollars.

By doing so, the state realized that Ham’s park was no longer a for-profit entity and was no longer eligible for a tourism tax rebate. Ham had previously sued the state for discrimination to access the tax rebate but has now undone all of that to save a little money.

In a letter sent to Ark Encounter attorneys, the state wrote:

It has come to our attention that your client, Ark Encounter, LLC, is in breach of its Tourism Development Agreement… with the Commonwealth. On July 10, 2017, the Tourism, Arts, and Heritage Cabinet… became aware of a quit claim deed transferring the Ark Project land, with all the privileges and appurtenances to the same, from Ark Encounter, LLC, a for profit company, to Crosswater Canyon, Inc. a non-profit company.

We believe that your client is aware that they may not be eligible for state tax incentives if the Ark Project is owned by a non-profit legal entity. Answers in Genesis, the parent company of Crosswater Canyon, Inc., and Ark Encounter, LLC clearly states on its website: “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.”

Furthermore, as a the Tourism Development Agreement is between the Commonwealth and Ark Encounter, LLC, not Crosswater Canyon, LLC, the current owner, please be advised that no further incentives may accrue from sales tax imposed on sales generated by or arising at the tourism development project, as of the date of transfer of the property, June 28, 2017.

Now, when it comes down to it, there is only one explanation as to why Ham would knowingly do this. Ark Encounter sales numbers would have to be so low that he knows he would make less than the $700,000 he is trying to save by becoming a non-profit park.

The park’s $18 million rebate is based on sales tax collected at the park. The park is then reimbursed that tax collected up to $18 million. If they projected that over the next few years their rebate would be less than $700,000, they would have felt the non-profit move would make sense.

If they believed they could see more than that $700,000 but still went ahead with the sale, they would just be idiots.

Either scenario is totally plausible here.

In the end, the park finally lost the tax rebate status they should never have had. The state and city should now be in the process of reviewing all their benefits handed to them when the park was sold to them as a tourism venture that would benefit the community.

Now that the park has moved towards being a non-profit, they will offer little to nothing back to the community and continue to exploit the good people of Kentucky.

Edit: An official from the state’s the Tourism, Arts and Heritage Cabinet emailed me letting me know that the Ark Encounter has 30-days to rectify the issue that puts them in violation.

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