an economic impact analysis of the kentucky center for the

ECONOMIC IMPACT ANALYSIS

A research report for the Kentucky Center for the Performing Arts by Barry Kornstein, Senior Research Analyst, Urban Studies Institute, Department of Urban and Public Affairs, University of Louisville,

with the assistance of Bridget Kelley, MPA Candidate, Research Assistant, and Stacey Reason, MA/MPA Candidate, Research Assistant/Graphic Designer,

June 2014.

AN ECONOMIC IMPACT ANALYSIS OF THE KENTUCKY CENTER FOR THE

PERFORMING ARTS

SECTION ONEExecutive Summary 6The Economic and Fiscal Impact of The Kentucky Center on the Louisville Metropolitan Area 8

SECTION TWOIntroduction 14The Geographic Distribution of Attendees of The Kentucky Center for the Performing Arts Events 16School Group Attendance at The Kentucky Center for the Performing Arts 23

SECTION THREEThe Economic and Fiscal Impacts to the Louisville MSA Derived from The Kentucky Center 28Social and Community Impacts of The Kentucky Center 39

Executive Summary

The Kentucky Center for the Performing Arts (KCPA)

is currently celebrating its 30th anniversary season. Construction

began on the downtown performing arts center in 1980, using

a public-private financing package spearheaded and assembled

by Humana cofounder Wendell Cherry and Governor John Y.

Brown. The first performances at The Kentucky Center were in

the fall of 1983.

Today, The Kentucky Center has an operating budget

of nearly $13 million, with about 90 full-time employees. It

is financed through a combination of earned income (facility

rentals, ticket sales, and concession revenues), charitable

giving and foundation support, local hotel room taxes, and

state appropriations. It is the primary home for the Louisville

Orchestra, Louisville Ballet, Kentucky Opera, and Stage

One Family Theater, and hosts PNC Bank Broadway Across

America’s big touring Broadway productions. The Kentucky

Center produces its own series of comedy, dance, film, concert,

and variety performances and rents its theaters to local and

regional performing arts groups. Over 365,000 persons attended

performances at The Kentucky Center during the 2012-13 fiscal

year. One-quarter of those were school children.

The Kentucky Center also has an award winning arts

education program, including the Governor’s School for the 6

SECTI

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Arts, ArtsReach, and the Academies for Arts Integration. These

programs educate young artists from around the state either

directly or by assisting other arts organizations and community

centers across the state implement their own programs. They

also educate teachers and artists about how to bring the arts

into schools and integrate them seamlessly into the curriculum.

The Kentucky Center has a national reputation for award

winning arts access programs, and works with theaters locally

and around the state to ensure the arts are accessible to patrons

with disabilities.

Beyond the artistic, educational and economic impacts,

the KCPA is important for metro Louisville for another reason.

KCPA events provide a service to area and state residents that

is not provided by the private sector. There would likely be no

Classics concert series, or a place to host shows such as The

Book of Mormon or Wicked, if The Kentucky Center did not

exist. These artistic productions are clearly demanded by the

public in Louisville and Kentucky, and it is because of public

investment that we have a venue in which they can be hosted.

The events satisfy a consumer demand and raise the quality of

life in the community. The enhanced quality of life helps attract

both residents and companies, thus creating more economic

activity here than we would observe without The Kentucky

Center.

The Urban Studies Institute (USI) at the University of

Louisville was engaged by the KCPA to quantify the economic

impact of The Kentucky Center on the regional economy, and

evaluate KCPA’s economic and noneconomic contributions to

the region.

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The economic impact of the KCPA consists of two

major pieces. The first is that its programming brings in tourists

from outside the twelve-county Louisville metropolitan area,

and the second is that its venues bring in artists who otherwise

would have likely bypassed Louisville on their national tours.

Both can be thought of as export industries of the region in the

sense that locally produced goods and services are being sold to

buyers from outside the metro area, bringing new dollars into

the Louisville metropolitan regional economy.

Among our findings were:

• Just under fourteen percent of performance ticket buyers

came from places that are more than a hundred miles from

Louisville. Overall, people attending KCPA performances

came from over 7,545 zip codes and 711 metropolitan and

micropolitan areas.

• The top ten metropolitan or micropolitan areas of origin for

attendees include five of the metro areas closest to Louisville

(Lexington, Elizabethtown, Cincinnati, Indianapolis, and

Evansville) and three of the closest micro areas (Richmond-

Berea, Bardstown, and Frankfort). It also includes, however,

quite a number of people from New York and Chicago.

• KCPA performances drew considerable numbers from

Cincinnati and Indianapolis, metros with their own quality

performing arts venues and vibrant artistic communities.

The percentages of attendees residing in Lexington,

Elizabethtown, Richmond-Berea, Cincinnati, and

Indianapolis are much greater in the current study than they

were in a previous study conducted a decade ago.

• About 69 percent of attendees came from within the

Louisville metropolitan area (Bullitt, Henry, Jefferson,

Oldham, Shelby, Spencer, and Trimble counties in Kentucky,

and Clark, Floyd, Harrison, Scott, and Washington counties

in Indiana). Performance-goers from outside the metro area

but within about 100 miles accounted for about 16 percent

of attendees, and those who traveled farther than 100 miles

to see a show made up nearly 15 percent of the attendees.

The Economic and Fiscal Impact of The Kentucky Center on the Louisville Metropolitan Area

8

• People from every state and the District of Columbia came

to see performances at The Kentucky Center. It is likely that

many of these people were in Louisville for business or leisure

unrelated to their attendance at a KCPA performance, but

they return home spreading the news about Louisville’s arts

attractions. In this regard, the KCPA is serving an important

public relations function for Louisville and Kentucky.

• Closer to home, over the 2000-2004 period, KCPA

performances drew patrons from every Kentucky county,

88 of the 93 Indiana counties and 80 of the 88 Ohio

counties. These statistics are a testament to the centrality

of the KCPA to the region’s performing arts experience.

Attendance was particularly strong from Richmond-

Berea, Madison, IN, and Campbellsville where total tickets

bought during the four year study period represent 18,

16, and 12 percent, respectively, of each micropolitan

area’s total population, despite considerable drives to

downtown Louisville. Other areas with a high percentage

of tickets sold in relation to their population were

Bardstown (23 percent) and Elizabethtown (19 percent).

• Over 300,000 students from elementary and secondary

school groups attended special KCPA performances during

the 2010 through 2013 fiscal years. This works out to an

average of around 400 students each school day. Roughly

88 percent of the school groups came from within the

Louisville metropolitan area. Eleven percent of the groups

came from outside of the metro area but within about 100

miles of The Kentucky Center. As may be expected, most

of the school groups were from Kentucky (over 92 percent).

Total

Total Performance Attendance 1,079,179

Live Outside of the Louisville Metropolitan Area 30.6%Visited Louisville Specifically to Attend KCPA Event 64.1%

Performance Attendees Relevant to Economic Impact Analysis 212,013

Attendees Who Stayed Overnight in the Metro Area 23.1%

Economic Impact Attendees - Overnight 48,870Economic Impact Attendees - Day Trip 163,143

Attendance Breakdown for Economic ImpactThe Kentucky Center, Fiscal Years 2010-2013

Note: Slightly different percentages of the three variables above were used for the touring Broadway performances. The differences were based on the slightly different geographic distribution of tickets in the database for the non-complementary tickets compared to the entire database. For the touring Broadway performances we used the results from the set of non-complementary tickets, which were a little higher for each variable. We present the weighted average.

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• We estimate that nearly 19 percent of attendees, or about

212,000 people, were relevant to our economic impact

analysis. That is, they were both non-residents of the

Louisville metro area and in town specifically to attend an

event at The Kentucky Center. Of those, 23 percent stayed

overnight in Louisville, while the rest just came into town

for the day. On a recurring annual basis that is roughly

12,200 overnight visitors to Louisville and another 40,800

day trippers brought to Louisville by events at The Kentucky

Center. In concrete terms, the overnight visitors probably

account for around 6,500 hotel room-nights per year.

• Average annual direct personal spending by Louisville

non-residents, including lodging, food, shopping,

entertainment, and transportation is estimated to be

just under $5 million. Including the multiplier effects,

the tourist draw of The Kentucky Center leads to $8.3

million of economic output in the MSA and supports

125 jobs with an annual payroll of almost $2.4 million.

• There were nearly 10,000 students and chaperones annually

who attended KCPA performances from schools outside

of the Louisville metro area. These schools, students, and

chaperones spent around $102,000 on tickets and meals

during their stays in Louisville. Including the multiplier

effects, resident company school group performances lead

to almost $200,000 of economic output in the MSA and

support 4 jobs with an annual payroll of about $53,000.

Impact Type Employment Output Payroll

Direct Effect 115 $6,569,727 $1,791,124Indirect Effect 22 $2,619,251 $718,980Induced Effect 23 $2,969,211 $748,759

Total Effect 160 $12,158,189 $3,258,862

Indirect impact refers to business-to-business spin-off spending; Induced impact refers to household spending that is a result of increased earnings.

Average Annual Economic Impact to the Louisville MSADerived From Performance Events at

The Kentucky Center for the Arts, Fiscal Years 2010-2013

Total Tourist, Touring Shows & School Group Impact

Source: Customized IMPLAN (IMpacts for PLANing), version 3, model of the Louisville MSA, using 2011 economic data.

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• Between the five or six touring Broadway productions and

the 40 to 50 touring artists each year, Louisville plays host

to the equivalent of a hundred people for ten weeks. That

is 7,000 people-days of spending by out-of-towners in the

local economy. Weekly spending on just personal items and

advertising is about $220,000. After the multiplier effects,

the touring productions at The Kentucky Center lead to

$3.6 million of economic output in the MSA and support

30 jobs with an annual payroll of almost $850,000.

Transient Room Taxes

Retail Sales Taxes Gasoline Taxes Totals

Jefferson County $79,835 $79,835So. Indiana Counties in MSA $6,343 $6,343State of Kentucky $79,941 $196,735 $31,805 $308,482State of Indiana $11,101 $24,609 $5,277 $40,986

Totals $177,220 $221,344 $37,082 $435,647

Local Income/ Occupational

TaxesState Income

TaxesState Sales

Taxes Totals

Jefferson County $53,298 $53,298So. Indiana Counties in MSA $9,803 $9,803State of Kentucky $94,078 $115,160 $209,239State of Indiana $28,968 $32,493 $61,462

Totals $63,101 $123,047 $147,653 $333,801

Derived From Non-Resident Attendees, Touring Shows, and School Groups

Note: The tax figures paid by MSA residents include the indirect and induced economic impacts of the tourism industry in the metro area.

Taxes Paid by Tourists, Touring Shows

Taxes Paid by MSA Residents

at The Kentucky Center for the Arts, Fiscal Years 2010-2013

Estimated Average Annual Tax Revenues

The Kentucky Center for the

Performing Arts has been

and continues to be a wise investment.

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• Putting all three areas of economic impact together (non-

resident attendees, school groups from beyond the metro

area, and traveling production companies), the ultimate

effect of The Kentucky Center’s ability to host such

attractive performance events is $12.2 million of economic

output supporting 160 jobs with an annual payroll of about

$3.3 million.

• State and local governments benefit from over $750,000

in tax revenues generated annually by the economic

impact of The Kentucky Center. Of that, the tourists

and touring shows themselves pay $435,000 directly.

Employees of tourism affected industries, through their

income and household spending, contribute roughly

$334,000 annually to state and local governments.

• All the economic and fiscal impacts discussed are continual

and recurring benefits of The Kentucky Center’s ability to

attract productions and performers that draw visitors from

an area ranging from one to five hours drive from downtown

Louisville. The jobs that are supported by the incoming

dollars continue from year to year, while the dollars of

output, payroll, and tax revenues recur year after year.

• Thousands of people from every region of the state are

enriched each year through direct contact with local,

regional, and nationally touring artists via outreach and

education programs such as Arts in Healing, ArtsReach, and

the Governor’s School for the Arts. Many more benefit from

the valuable training that The Kentucky Center’s Academies

for Arts Integration, and Gheens Artist Residency Program

provide to teachers and community center staff from all

parts of Kentucky. With an outreach and education budget

of less than $1.5 million, it is certainly the case that, though

we cannot actually measure them, the benefits of these

programs far outweigh the costs.

The Kentucky Center for the Performing Arts has been


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The Kentucky Center for the Performing Arts

(KCPA) is currently celebrating its 30th anniversary

season of programming. Since The Kentucky Center’s

opening in November of 1983 it has been Kentucky’s

premier venue for the best in music, dance, and theater.

The Kentucky Center for the Performing Arts

houses four venues within its striking glass-enclosed

building and manages a fifth offsite. The largest space

is Robert S. Whitney Hall, a grand multipurpose

concert hall seating about 2,400 people. Also onsite

is the more intimate Moritz von Bomhard Theater,

whose steeply raked aisles provide a great view from

any of the 619 seats. Rounding out the onsite venues

are the Boyd Martin Experimental Theater, a small

“black box” space often rented out to local arts and

theater groups for their productions, and the 100-

seat KentuckyShow! Theater, which is dedicated to

the multimedia KentuckyShow! celebrating the state’s

history, culture, music, and people. Offsite, the KCPA

manages the beautifully restored 1920s era 1,400 seat

W. L. Lyons Brown Theatre nearby on Broadway.

The KCPA’s resident companies – Louisville

Orchestra, Louisville Ballet, Kentucky Opera, and

Stage One Family Theater – are the finest in the region

and have been home to many nationally renowned artists over the years. The

Kentucky Center is also home to PNC Bank Broadway Across America and

is the only place in the state where one can see the biggest touring Broadway

productions, usually in extended runs of one to three weeks. In addition,

the KCPA produces its own series of comedy, dance, film, concert, and

variety performances (Kentucky Center Presents), and rents its theaters to

local and regional performing arts groups and promoters bringing national

acts to Louisville. Finally, in recent years the KCPA has been home to The

Kentucky Author Forum and IdeaFestival, making it a hub of intellectual

activity.

The Kentucky Center also operates a variety of education

and community outreach programs. It partners with schools, teachers,

community centers, colleges and universities, health care facilities, artists

and performing arts centers throughout Kentucky to provide on-site

arts experiences and resources to audiences of all ages and backgrounds.

These range from bringing the healing power of the arts to people with

physical and/or emotional disabilities or illnesses, to introducing the arts to

underserved communities, and from providing professional development

opportunities to teachers, to operating the annual Governor’s School for

the Arts.

KCPA has an operating budget of nearly $13 million, with about 90

full-time employees. It is financed through a combination of earned income

(facility rentals, ticket sales, and concession revenues), charitable giving and

foundation support, local hotel room taxes, and state appropriations.

Introduction

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Aside from providing much used and appreciated

cultural services to the Louisville community, KCPA also has

an economic impact on the surrounding community whenever

people from outside the region purchase tickets to KCPA events

and travel to Louisville to attend those performances. This is the

type of economic effect traditionally associated with industry

- the economic activity induced by sales to nonresidents. It is

the export of a good or service which brings in new money

to the local economy. To varying extents, KCPA performances

attract hundreds of attendees from outside the region. These

nonresidents are attracted to a Louisville event and spend dollars

in the local economy that would have been spent in another state

or metropolitan area had that particular performance not been

held here. These new dollars hit our economy first at hotels,

restaurants, gift shops, and other retail establishments. They

recirculate many times through the local economy (businesses

use them to buy more supplies, some locally, and pay employees

who then spend them on their households), creating more new

businesses, earned income, job opportunities, and tax revenues.

It is this latter type of effect, which corresponds to the strict

technical sense of the term “economic impact,” and it is what

we focus on when we examine the economic and fiscal impact

of KCPA.

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This focus on the strict sense of economic impact means

we have to both clearly define the local region from which the

goods and services are exported and the estimate of the number

of customers purchasing those goods and services (as well as

how much of which goods and services, which we will do later).

Because dollars do not respect political jurisdictions, the

unit of analysis for this report is the economic region. That

is, economic flows are captured in economic regions and not

confined to cities, counties or even states. When measuring

the economic impact of an industry or activity on a region,

economists focus on contiguous geographic areas that exhibit

a great deal of social and economic integration. Using Census

Bureau data on home-to-work commuting patterns, the Office

of Management and Budget has established several hundred

Metropolitan Statistical Areas (MSA) that, according to the

commuting patterns, tend to function as coherent economic

units. It is not a perfect system, since it is based on county

boundaries, which differ markedly in size throughout the

country. However, it is a good approximation, especially for

Kentucky, where county sizes are fairly small. The Louisville

MSA consists of twelve counties, five of which are in southern

Indiana, and seven of which are in Kentucky. They are listed in

the following table along with their 2012 population estimates.

In a typical year roughly 360,000 people attended

performances at The Kentucky Center during fiscal years 2010

to 2013. About 290,000 attended regular ticketed performances

while around 75,000 were students, their teachers, and

chaperones enjoying special school group performances. The

2012 fiscal year was atypical, as the Louisville Orchestra did not

perform for most of the season, and the number of weeks that

The Geographic Distribution of Attendees of The Kentucky Center for the Performing Arts Events

2012 population estimate

Bullitt County, KY 75,896Henry County, KY 15,318Jefferson County, KY 750,828Oldham County, KY 61,412Shelby County, KY 43,614Spencer County, KY 17,416Trimble County, KY 8,787Clark County, IN 111,951Floyd County, IN 75,283Harrison County, IN 39,134Scott County, IN 23,791Washington County, IN 27,921

Louisville MSA 1,251,351

Louisville Metropolitan Statistical Area

Source: U.S. Census Bureau, Population Division. Annual Estimates of the Resident Population for Counties of Kentucky and Indiana: April 1, 2010 to July 1, 2012 (CO-EST2012-01-21). Release Date: May 2013.

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touring Broadway productions played was less than half the

average of the other three seasons (the 2013-14 and scheduled

2014-15 seasons also have more weeks of performances).

For economic impact analysis we need to know the

geographic distribution of the residences of these attendees,

because only those coming from outside of the metropolitan

area, and coming primarily to attend a performance at the

KCPA, can be properly said to be contributing new dollars to

the Louisville metro economy due to the operations of The

Kentucky Center. To this end, KCPA staff provided us with

a database of nearly 100,000 ticket sales transactions covering

more than 540,000 tickets. The database included all single ticket

and subscription purchases for all of The Kentucky Center’s

resident companies, and included the state, county, and zip code

of each purchaser. The database accounts for roughly half of all

attendance, the remainder being touring Broadway productions

and theater rentals for performances.

We would expect the geographic distribution of

attendees at rental performances to closely match that of

attendees of resident company events. We might also expect that

the distribution would vary for touring Broadway productions,

as they may be a bigger draw and attract from a wider area. Two

factors allowed us to comfortably assume that the distribution of

Broadway patrons was about the same as the other performance

attendees. First, we compared the geographic distribution of

Performance Genre FY2010 FY2011 FY2012 FY2013

Classical 36,927 25,371 5,558 36,541Dance 31,910 35,967 28,975 26,742Broadway 116,010 112,280 65,782 145,911Opera 7,169 7,385 8,609 6,802Theatre 5,160 6,069 6,380 7,812Education/Family 5,696 35,549 32,284 23,794Variety 69,385 29,512 17,281 10,656Film 1,884 640 1,334 474Popular 21,917 29,633 46,005 29,775

Total 296,058 282,406 212,208 288,507

Performance Genre FY2010 FY2011 FY2012 FY2013

Classical 22,330 14,635 0 17,021Dance 7,003 5,770 6,656 7,153Opera 472 0 0 0Theatre 30,024 58,947 64,914 53,130

Total 59,829 79,352 71,570 77,304

Attendance at The Kentucky Center PerformancesFiscal Years 2010-2013

School Groups

Note: KentuckyShow! attendance figures are not included in the table. Many of the school groups attending the KentuckyShow! also attend other performances on the same day and we do not want to double count students. Also, KentuckyShow! attendance is not regularly included in the performance statistics compiled by the KCPA. But since the KentuckyShow! is not by itself a draw for tourism, its exclusion is immaterial for this analysis.

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all the tickets in the database to just

the non-complementary tickets sold

(about fifteen percent of the ticket

transactions database consisted of

complementary tickets), since there

are very few comped Broadway tickets.

While the percentage of tickets going

to Jefferson County residents dropped

from 54.7 percent to 51.7 percent after

taking out the complementary tickets,

the percentages within the MSA,

within a fifty mile radius, and within

a hundred mile radius were all very

close to the percentages for the entire

database. While the distribution of

tickets within the metro area changed,

the geographic distribution outside of

the metro was nearly identical in the

full database and its subset.

Second, we estimated an

average distance traveled to The

Kentucky Center for the non-

complementary tickets and compared it

to travel distance estimates for touring

Broadway productions published by

The Broadway League, the national trade association for the Broadway industry. For all

ticket buyers residing within a 300 mile radius of the KCPA, the estimated distance traveled

was a bit under 40 miles. The Broadway League periodically conducts economic impact

studies of Touring Broadway, which utilize audience surveys. Their 2010 report covering the

2008-2009 season found that theater patrons “who reported living outside the immediate

area and said that the theatre was their main reason for coming to the area traveled an

average of 38 miles.” Since in the Broadway League study “immediate area” is generally a

city downtown, it is roughly equivalent to the 40202 zip code in Louisville. Because these

two estimates are so close and the geographic distribution of non-comped tickets outside

the metro area is the same as it is for the full database we feel confident in assuming that

the geographic distribution of attendees for touring Broadway productions closely matches

that of the resident companies.

All Tickets

Non-Complementary

Tickets All TicketsFY2010-FY2013 FY2010-FY2013 FY2001-FY2004

Jefferson County 54.1% 51.7% 68.5%Louisville MSA 69.5% 69.2% 85.2%Outside MSA, Within 100 Miles 16.7% 15.3% 9.2%Beyond 100 Miles 13.9% 15.5% 5.6%

Geographic Distribution of The Kentucky Center Performance AttendeesFiscal Years 2010 through 2013 (with comparison to FY2001-FY2004)

Note: Current study results based on database of 541,000 tickets distributed (469,000 sold, 82,000 complementary) during the four fiscal years. Previous study based on database of nearly 700,000 tickets distributed. Previous results have been updated to reflect the latest MSA definitions.

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An analysis of the zip code data

indicates that around fourteen percent of the

individual ticket holders came from places

that are more than a two hour drive from

Louisville. Tickets were sold to residents

of 7,545 zip codes, representing 366 of the

country’s 381 metropolitan areas and 345

of the country’s 536 smaller micropolitan

areas. That is a much wider geographic

scope than we found in a previous study

we conducted for The Kentucky Center

covering the 2001 through 2004 fiscal years.

It is twice the percentage of tickets sold to

buyers residing beyond a two-hour drive

from downtown Louisville, representing

3,600 additional zip codes, 46 more metro

areas, and 99 more micropolitan areas than

were found in the previous study’s more

extensive database (it covered about three-

quarters of all tickets sold).

While 68 percent of attendees came

from Jefferson County in the previous

study ten years ago, we estimate that just 54

percent resided in Jefferson County during

the 2009-10 through 2012-13 seasons.

More than double the number of people came from outside the metropolitan area

than in the previous study’s results, just over 30 percent versus about 15 percent. The

greater geographic scope of performance-goers in recent years versus a decade prior

is in even greater display in terms of those who traveled farthest to see a show. We

estimate that nearly 14 percent of attendees during the 2010 through 2013 fiscal

years resided more than 100 miles from The Kentucky Center, while we estimated

that less than 6 percent did so a decade earlier.

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Tickets PercentMetro- or Micro-politan Title in Database Percent FY2001-FY2004

Louisville/Jefferson County, KY-IN 375,784 69.5% 85.2%Lexington-Fayette, KY 24,085 4.5% 2.5%Elizabethtown-Fort Knox, KY 14,812 2.7% 1.8%Richmond-Berea, KY 9,244 1.7% 0.3%Cincinnati, OH-KY-IN 9,052 1.7% 0.5%Bardstown, KY 5,255 1.0% 0.8%Indianapolis-Carmel-Anderson, IN 4,519 0.8% 0.2%Frankfort, KY 3,706 0.7% 0.9%New York-Newark-Jersey City, NY-NJ-PA 3,578 0.7% 0.1%Evansville, IN-KY 2,912 0.5% 0.6%Chicago-Naperville-Elgin, IL-IN-WI 2,902 0.5% 0.1%

Note: Current study results based on database of 541,000 tickets distributed (469,000 sold, 82,000 complementary) during the four fiscal years. Previous study based on database of nearly 700,000 tickets distributed. Previous results have been updated to reflect the latest MSA definition for Louisville, but not other MSAs.

Top Ten Metropolitan and Micropolitan Areas of ResidenceThe Kentucky Center Attendees, Fiscal Years 2010 through 2013

(with comparison to FY2001-FY2004)

In the previous table we list the top ten metropolitan areas of origin

(aside from Louisville) for attendees in our sample of ticket holders along

with their estimated percentage of attendees in the previous study. As may

be expected, the list includes five of the metro areas closest to Louisville

(Lexington, Elizabethtown, Cincinnati, Indianapolis, and Evansville) and three

of the closest micro areas (Richmond-Berea, Bardstown, and Frankfort). It

also includes, however, quite a number of people from New York and Chicago.

Among the top forty metropolitan areas represented by performance attendees

were Nashville, Washington, D.C., Columbus, Atlanta, Los Angeles, Houston,

St. Louis, Austin, Miami, Dallas, Detroit, Philadelphia, Tampa, and Cleveland.

People from every state and the District of Columbia came to see performances

at The Kentucky Center during the study period. It is likely that many of these

people were in Louisville for business or leisure unrelated to their attendance at

a KCPA performance, but those people return home spreading the news about

Louisville’s arts attractions. In this regard, the KCPA serves a very important

public relations function for Louisville and Kentucky.

It is significant that KCPA performances drew considerable numbers

from Cincinnati and Indianapolis, metros with their own quality performing

arts venues and vibrant artistic communities. Furthermore, the percentages of

attendees residing in Lexington, Elizabethtown, Richmond-Berea, Cincinnati,

and Indianapolis are much greater in the current study than they were a decade

earlier.

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The map shows the extent of the geographic coverage that the Kentucky Center performance events achieved in the

greater region. It shows the number of attendees by zip code for a 300-mile radius around Louisville. As can be seen in the

map, KCPA shows drew very well all along the interstates in Kentucky and southern Indiana and Kentucky’s parkways. To

the north, KCPA performances achieved good geographic coverage along the well-populated I-75 corridor from northern

Kentucky through Cincinnati up to Dayton. KCPA shows also drew well along the I-65 corridor all the way to Lafayette (the

KnoxvilleNashville

St. Louis

Chicago

Columbus

Toledo

Cincinnati

Dayton

Lexington

Louisville

Bowling GreenHopkinsville

Paducah

RichmondOwensboro Elizabethtown

Ashland

Frankfort

Indianapolis

Fort Wayne

Evansville

Lafayette

ColumbusBloomington

Geographic Distribution of Ticket Purchasesfor The Kentucky Center for the Performing Arts Events, Fiscals Years 2010-2013

300 Mile Radius fromThe Kentucky Center

Total Tickets Sold forThe Kentucky Center Performances

by Zip Code, FY2010-FY2013

1 - 9

10 - 99

100 - 999

1,000 - 59,510

Interstate HighwaysCounty Boundaries

Based on a database of 540,000 single performanceand subscription ticket sales for KCPA Presents andResident Company performances. The data does notinclude KCPA rentals or PNC Broadway Across Americaperformances.

21

Purdue University area). To the south, KCPA performances did very well along the

I-64/I-75 corridor through Lexington and south to the Tennessee border, and the

I-65 corridor through Bowling Green to Nashville. Of course, these are also where

the biggest population centers are, but there is also very good coverage in the area

south of Louisville between the I-65 and I-75 corridors. This area has the small

cities of Bardstown, Campbellsville, Danville, and Somerset. The map also gives a

good view of just how well The Kentucky Center performances draw in the small

cities and rural areas of central Kentucky and southern Indiana. Of the patrons

who lived outside the Louisville metro area, just over 32 percent came from a small

city micropolitan area or a rural county. Most of those

were from Kentucky and Indiana. Over the 2010-

2013 period, The Kentucky Center performances

drew patrons from every Kentucky county, 88 of the

93 Indiana counties and 80 of the 88 Ohio counties.

These statistics are a testament to the centrality

of The Kentucky Center to the region’s performing

arts experience. Attendance was particularly strong

from Richmond-Berea, where, despite being nearly

two-hours away, total tickets bought during the

four year study period represent 18 percent of the

micropolitan area’s total population. This is also a

big change from a decade ago when far fewer people

traveled from the Richmond area to The Kentucky

Center. Other metropolitan and micropolitan areas

with a high percentage of tickets sold in relation to

their population were Bardstown (23.5 percent),

Elizabethtown (19.5 percent), Madison, IN (16

percent), Campbellsville (12 percent), and Frankfort

and Lexington (each 10 percent).

Attendee Population Percent of PercentMetro- or Micro-politan Title Estimate 2013 Population FY2001-FY2004

Louisville/Jefferson County, KY-IN 749,689 1,262,261 59.4% 85.2%Bardstown, KY 10,484 44,540 23.5% 24.2%Elizabethtown-Fort Knox, KY 29,550 151,465 19.5% 19.6%Richmond-Berea, KY 18,442 102,283 18.0% 3.3%Madison, IN 5,237 32,458 16.1% 23.0%Campbellsville, KY 2,943 24,649 11.9% 8.6%Frankfort, KY 7,393 71,459 10.3% 16.2%Lexington-Fayette, KY 48,050 489,435 9.8% 7.2%Seymour, IN 2,350 43,466 5.4% 4.2%Jasper, IN 2,592 55,044 4.7% 3.8%Glasgow, KY 2,440 53,010 4.6% 6.7%

Note: Current study results based on database of 541,000 tickets distributed (469,000 sold, 82,000 complementary) during the four fiscal years. Previous study based on database of nearly 700,000 tickets distributed. Attendee estimate assumes all attendees are distributed the same as those in the ticket database. Previous results have been updated to reflect the latest MSA definition for Louisville, but not other MSAs.

Top Ten Metropolitan and Micropolitan Areas of Residence

The Kentucky Center Attendees, Fiscal Years 2010 through 2013(with comparison to FY2001-FY2004)

Based on Percentage of Area's Population

22

23

As Kentucky’s pre-eminent performing arts venue, The Kentucky Center provides a wide array of opportunities to Kentucky

and southern Indiana educators. The response from the schools audience has been impressive. Over 3,700 elementary, secondary, and

homeschool school groups attended special KCPA performances during the four year study period. These groups brought nearly

300,000 students, teachers, and chaperones with them. This works out to an average of around 5.2 school groups and 400 students

every school day. In a typical year, 64 percent of the student attendees are seeing a Stage One performance, about 25 percent are

experiencing the Louisville Orchestra, while nine percent enjoy the Louisville Ballet.

We received detailed information on elementary and secondary school groups from Stage One, the Louisville Orchestra, and

the Louisville Ballet. We actually received information about more students than were counted in the official KCPA statistics. The

discrepancy was nearly 60,000 students over the four years, but almost ninety percent of that was due to the Stage One data. It is

possible that the Stage One data covered ticket reservations rather than actual attendance, but the numbers are large enough that the

overall school group attendance at The Kentucky Center may be about ten percent higher than the official numbers. However, this

should not affect the geographic distribution, since it is likely that reserved but non-attending seats mirror the actual attendance.

School Group Attendance at The Kentucky Center for the Performing Arts

Presenting Company FY2010 FY2011 FY2012 FY2013

Louisville Orchestra 22,330 14,635 0 17,021Stage One Family Theater 29,303 56,849 63,746 52,318Kentucky Opera 472 0 0 0Louisville Ballet 7,003 5,770 6,656 7,153KentuckyShow! 8,245 7,620 11,332 11,133Non-Resident Rental 721 2,098 1,168 812

Total 68,074 86,972 82,902 88,437

Student Matinee Attendance at The Kentucky CenterFiscal Years 2010 through 2013

Note: While KentuckyShow! school group attendance is shown in this table, we have excluded it from the economic impact analysis because many students attend it as an add-on to a performance by a resident company.

The table summarizes the geographic distribution of school group attendance. Roughly 88 percent of the school groups came

from within the Louisville metropolitan area. This is more concentrated than a decade ago, especially with regard to Jefferson County,

which now accounts for 70 percent of school attendees, up from just 54 percent in the previous study. Eleven percent of the groups

came from outside of the metro area but within about 100 miles of The Kentucky Center. Finally, just one-half of a percent of the

groups traveled farther than 100 miles to see a performance. As may be expected, most of the school groups were from Kentucky (over

92 percent). The rest were from Indiana.

The map (to the right) shows that The Kentucky Center does well in attracting school groups from throughout central Kentucky,

from just west of Interstate 65 to just east of Interstate 75, but especially well in the corridor between Louisville and Elizabethtown

along Interstate 65. This is a bit of a change from the previous study, as then more school groups came from along the I-64 corridor to

Louisville’s east. The distribution of school groups has shifted to the west and a bit north.

FY2010-FY2013 FY2001-FY2004

Jefferson County 70.9% 54.3%Louisville MSA 88.3% 82.4%Outside MSA, Within 100 Miles 11.2% 15.0%Beyond 100 Miles 0.5% 2.5%

Geographic Distribution of School Group AttendanceFiscal Years 2010 through 2013 (with comparison to FY2001-FY2004)

Note: Current study results based on database of 342,000 ticket reservations during the four fiscal years. These tickets cover at least 98 percent of all school attendance. Previous study based on database of nearly 175,000 school group tickets and extrapolated. Previous results have been updated to reflect the latest MSA definitions.

24

25

Anderson

Cincinnati

Lexington

Louisville

Bowling GreenHopkinsville

Paducah

RichmondOwensboro Elizabethtown

Ashland

Frankfort

Indianapolis

Evansville

Seymour

Geographic Distribution of School Group Attendancefor The Kentucky Center for the Performing Arts Events, Fiscals Years 2010-2013

Based on a database of 3,715 elementary, secondary, andhomeschool school groups attending Stage One,Orchestra, and Ballet performances. This represents about90% of all school groups, but possibly higher since manygroups attend KentuckyShow! before or after the ResidentCompany performance.

Total School Group Attendance by Countyfor The Kentucky Center Performances, FY2010-FY2013

5 - 799

1,041 - 5,040

8,746 - 15,516

242,915

Interstate Highways

County Boundaries

26

The next table lists the top ten counties

outside of Jefferson County, KY, ranked by school

group attendance. Of the ten counties, seven are in

the Louisville metro area (Oldham, Clark, Bullitt,

Shelby, Harrison, Henry, and Floyd), two used to be a

part of the Louisville MSA (Nelson and Meade), and

the tenth includes Elizabethtown, one of the largest

population centers in central Kentucky. In terms of

economic activity, Louisville has a broader reach than

just the metropolitan area boundaries. As defined by

the U.S. Bureau of Economic Analysis, using county-

level commuting pattern and media consumption

information, Louisville’s economic area is 25 counties

large (18 counties in Kentucky and seven in Indiana).

The central contiguous block of colored counties on

the map of school group attendance is actually a near

match with the Louisville economic area.

The most notable attendance by schools

outside the Louisville economic area came from

Anderson County, where 23 groups, ranging from

pre-K to middle school sent about 2,400 students and

450 chaperones to KCPA performances over the four

years. Perhaps the longest trips by Kentucky schools

were taken by schools in Caldwell and Boyd counties

(in far southwestern and eastern Kentucky).

Teachers & TotalCounty Students Chaperones Attendance PercentJefferson County, KY 216,577 26,144 242,721 70.9%Oldham County, KY 13,701 1,815 15,516 4.5%Clark County, IN 9,515 1,328 10,843 3.2%Bullitt County, KY 9,468 1,327 10,795 3.2%Nelson County, KY 7,981 1,687 9,668 2.8%Hardin County, KY 7,816 930 8,746 2.6%Shelby County, KY 4,317 723 5,040 1.5%Harrison County, IN 3,818 676 4,494 1.3%Meade County, KY 2,851 706 3,557 1.0%Henry County, KY 2,763 443 3,206 0.9%Floyd County, IN 2,441 465 2,906 0.8%

Top Ten Counties of Origin for School GroupsFiscal Years 2010 through 2013

Note: Current study results based on database of 342,000 ticket reservations during the four fiscal years. These tickets cover at least 98 percent of all school attendance.

28

important reason they came to the venue area. Ideally, we would

like to know how that percentage varied with distance traveled.

But since there are both reasons to believe the percentage may

be lower for attendees from outside the metro area and also

reasons to believe it may be higher for at least some range of

distances traveled, we use the 64 percent figure as the basis for

our calculations.

From our attendance data we know about how many

people who attended performances at The Kentucky Center

came from outside of the Louisville MSA, and we have a

reasonable estimate of how many of those came specifically

to attend the performance. These are the people who are truly

adding new dollars to the local economy due to the influence of

The Kentucky Center. The next step is estimating how much

they spend and on what goods and services. With good survey

data, we could slice up the various demographic characteristics

of the performance-goers and create many possible spending

profiles for subgroups of our economic impact attendees. For

example, young couples in their twenties may spend very little on

dining compared to much older and wealthier couples. Lacking

such information, we instead rely on a number of surveys done

for similar purposes locally and our past experience to formulate

an average spending profile for KCPA performance attendees.

Estimating How Many Event Attendees are Relevant to

Economic Impact

In an economic impact study of visitors drawn to an

area because of a specific event, it is important to estimate the

percentage of event attendees who came to the area specifically

for the event in question. If a person attending the event is

visiting the area for some other reason, then any of his or her

spending associated with the event cannot be properly credited

with having been caused by the event itself. In other words, we

must assume that some level of spending by this visitor would

have occurred regardless of the event, and that the event may

have caused a reallocation of spending within the community

but not any additional spending. For the school groups, this

is very easy. We know that they have come specifically to

attend a performance at The Kentucky Center. For regular

performances, in the absence of much survey data, we must

make some assumptions.

Since we are comfortable that the distribution of

resident company and Kentucky Center Presents patrons is

very similar to rental performances and touring Broadway

productions, we turn again to the 2010 economic impact study

of Touring Broadway conducted by The Broadway League. In

that study, approximately 64 percent of survey respondents

reported that the Broadway show was either a very important or

The Economic and Fiscal Impacts to the Louisville MSA Derived from The Kentucky Center

SECTI

ON THREE

29

percentage was low at 60 miles from The Kentucky Center but

increased linearly at each 10 mile increment, reaching about 50

percent at 110 miles away and 100 percent for anyone residing

160 or more miles from downtown Louisville. We think these

are very conservative estimates. Combining the estimates of the

percentage of attendees residing at each 10 mile mark between

50 and 300 miles from The Kentucky Center and the estimates

of how many of those people stayed overnight in Louisville gave

us an estimate of the total percentage of out-of-town attendees

who stayed overnight in Louisville. It was roughly 23 percent,

which is in line with two previous studies we were involved in.

One is a visitor satisfaction survey conducted during the winter

2002-2003 Millet to Matisse special exhibition at the Speed

Museum by Horizon Research International, a regional market

research firm, while the other is a visitor survey of the 1997

St. James Court Art Show. It is also similar to the implied hotel

usage rates that can be derived (from the per person spending

patterns and estimates of room rates and persons per room)

from the The Broadway League’s economic impact study of

Touring Broadway.

There is, however, one characteristic of out-of-town

visitors for which it is critical to distinguish between groups and

estimate how many fall in to each of two camps: whether or

not they stayed overnight in Louisville. The reason is because

the spending profiles of the two groups are very different, with

overnight visitors spending much more money in the local

economy than day trippers. To do this we relied largely on the

geographic distribution of ticket holders in ticket database.

With GIS software we calculated the percentage of ticket

holders residing within 50 miles, 100 miles and 300 miles of

The Kentucky Center. We then estimated the percentage of

ticket holders residing at 10 mile increments from 50 miles to

300 miles from downtown Louisville (i.e. the cumulative percent

at 60 miles, 70 miles, 80 miles distant, etc.). We used linear

interpolation between 50 and 100 miles and a simple exponential

decay function between 100 and 300 miles. We stopped at 300

miles under the assumption that no one living beyond 300 miles

from Louisville would be visiting the area with the primary

reason being to attend a KCPA performance event. While there

may indeed be some, their exclusion is likely balanced out by

the inclusion of too many of the attendees residing at the outer

reaches of the 300 radius.

We then assigned an estimate of the percentage of

people residing at each 10 mile increment who stayed overnight

during their visit to attend a KCPA performance event. The

30

Estimating Event Attendee Spending Profiles

Spending profiles for the average overnight visitor

and the average day tripper were derived with the aid of

several studies. We again used information from The

Broadway League’s report on the economic impact on

host cities of the 2008-09 Touring Broadway season, the

Horizon Research survey of visitors to the 2002-03 Millet

to Matisse Speed Museum exhibition, and our surveys from

a study of the 1997 St. James Court Art Show. In addition

we also relied heavily on two other sources which we used

in our 2012 report on the economic impact of tourism on

the Louisville economy for the Louisville Convention and

Visitors Bureau (LCVB). The first is a 2011 visitor survey

study done for the Kentucky Department of Travel and

Tourism by Davidson-Peterson Associates which asked

tourists about their participation in many different types of

activities during their time in the state. The state is divided

into nine regions and we drew on the results that included

Louisville. The second is the 2007 Visitor Report that

Longwoods Travel USA, a leading tourism research firm,

produced for the LCVB. The Longwoods report provides

demographic and activity information broken out by various

leisure and business market segments, and includes visitor

expenditure profiles for overnight and daytrip tourists

under the broad categories of lodging, food and beverage,

Total

Total Performance Attendance 1,079,179

Live Outside of the Louisville Metropolitan Area 30.6%Visited Louisville Specifically to Attend KCPA Event 64.1%

Performance Attendees Relevant to Economic Impact Analysis 212,013

Attendees Who Stayed Overnight in the Metro Area 23.1%

Economic Impact Attendees - Overnight 48,870Economic Impact Attendees - Day Trip 163,143

Attendance Breakdown for Economic ImpactThe Kentucky Center, Fiscal Years 2010-2013

Note: Slightly different percentages of the three variables above were used for the touring Broadway performances. The differences were based on the slightly different geographic distribution of tickets in the database for the non-complementary tickets compared to the entire database. For the touring Broadway performances we used the results from the set of non-complementary tickets, which were a little higher for each variable. We present the weighted average.

The table presents our estimate of the total number of

economic impact relevant attendees who saw performance events at

The Kentucky Center over the four fiscal years, 2010 through 2013. We

estimate that just over 212,000 attendees lived outside of the Louisville

metro area and had come specifically to attend a performance at The

Kentucky Center. Of those, nearly 49,000 stayed overnight in Louisville

while about 163,000 just came in to town for the day. On a recurring

annual basis that is roughly 12,200 overnight visitors to Louisville and

another 40,800 day trippers brought to Louisville by events at The

Kentucky Center. In concrete terms, the overnight visitors probably

account for around 6,500 hotel room-nights per year.

31

transportation (in Louisville), recreation and

entertainment, and retail purchases. The

overnight tourist spending profile is further

broken out by market segment.

The spending profiles used in the

economic impact analysis are shown in

the top half of the next table, along with

estimates of the average annual spending in

those categories by out-of-town performance

attendees using the overnight and daytrip

attendance figures of the previous table.

The lodging estimate assumes a hotel in the

areas closest to The Kentucky Center but at

a price consistent with transient room tax

receipt statistics from the Metro Revenue

Commission. The transportation estimate

accounts for parking garage fees as well

as gas. We assume a meal at a moderately

upscale restaurant since attending KCPA

events is often a special occasion. The

entertainment estimate includes a portion of

the average price of a ticket sold to someone

from outside of the Louisville MSA. We

view ticket revenue for resident company and

Kentucky Center Presents performances as

staying in Louisville to help perpetuate the KCPA, so that fraction of total attendance

is the portion of the non-metro ticket price used. We assume that ticket revenue for

other performances supports touring artists and leaves Louisville. The entertainment

estimate also includes the average per order and per ticket fees each person would pay.

With overnight tourists spending an average of $181 and day trippers $66

during their stays in Louisville, total average annual spending by non-resident attendees

Overnight Tourists Daytrip Tourists

Lodging $60.00 n/a

Transportation $16.99 $10.66Food & Beverage $50.60 $20.00

Retail Purchases $15.57 $5.00Recreation/Entertainment $37.80 $30.80

Total Expenditures $180.96 $66.46

Overnight Tourists Daytrip Tourists All Tourists

Lodging $733,049 n/a $733,049

Transportation $207,578 $434,656 $642,234Food & Beverage $618,205 $815,714 $1,433,919

Retail Purchases $190,165 $203,929 $394,094Recreation/Entertainment $461,821 $1,256,200 $1,718,021

Total Expenditures $2,210,818 $2,710,499 $4,921,317

Per Person Spending Estimates

Estimates of Average Annual Direct Tourist Spending in the Louisville MSAby Non-Resident Attendees of Performance Events at


Total Tourist Spending

32

a good is imported from beyond the region, then just 75 percent

of the spending to produce the good can be re-spent by local

businesses and residents.

Input-output models work through the repeated rounds

of re-spending until all of the initial direct spending has leaked

out of the system (because good and services have been

purchased from outside the region). The result is an estimate

of how much extra economic activity has been supported by

the initial spending. An economic multiplier is simply the ratio

of the total activity to the initial activity. Multipliers capture the

full range of economic impact: direct effects, indirect effects,

and induced effects. Direct effects are changes that occur as

an immediate result of a change in expenditure. These are

front-end businesses whose facilities directly gain revenue from

additional spending. For tourism, direct effects are associated

with industries such as lodging, entertainment, restaurants,

transportation, and retail.

Indirect effects are the result of changes within industries

that supply goods and services to the businesses that experience

a direct effect. Examples of indirect effects of tourism

include industries such as linen suppliers, bulk food suppliers,

and wholesale retail suppliers. Induced effects are changes in

spending by those households earning income from sectors

directly and indirectly affected by changes in expenditure. For

of The Kentucky Center is estimated to be about $4.9 million.

Overnight visitors account for $2.2 million of that, while day

trippers spend $2.7 million annually on their visits to The Kentucky

Center. Tickets and associated fees make up 86 percent of the

$1.7 million in recreation and entertainment spending. Visiting

patrons of The Kentucky Center spend nearly three-quarters of

a million dollars on area hotels annually, and double that on food

and beverages in local restaurants.

Input-Output Models

These directly spent dollars recirculate many times

through the local economy as they are used to buy goods and

services locally and pay wages. The methodological approach we

use to calculate the result of this further activity is input-output

modeling. An input-output model is a mathematical model that

describes the flow of money between sectors within a region’s

economy. The flow of money is based on the inputs that are

purchased for the production of a good or service. This flow

reveals the money that is spent in many industries in order to

produce a particular good or service. Input-output models also

determine the proportion of sales that go to employee wages,

proprietor‘s income, and government taxes. In addition, they

include the proportion of each input bought locally versus outside

of the region. If 25 percent of the value of the inputs to produce

33

example, this would include employees of hotels

and restaurants whose wages depend on tourism

and whose spending habits change as a result of

changes in tourism.

All input-output models make a number

of simplifying assumptions. Details about these

assumptions can be quite technical, but they

basically assume that all firms in a sector use

the same production technology and there are

no economies or diseconomies of scale. Some

important variables that are not accounted for

in input-output models are changes in price,

quantity or quality of goods and services,

changes in tax structures and tax effects and any

social or environmental impacts associated with

tourism.

Implementing the Economic Impact Model

We use the IMPLAN economic impact

modeling software system to create a custom

input-output model of the Louisville MSA.

IMPLAN uses economic data on the presence

and size of industries at the national, state, and

county level in order to estimate a model of trade flows between counties. The resulting

regional models and industry multipliers take account of the ability of the regional economy

to supply inputs to each of 440 industries (as well as how much must be imported from

elsewhere to support a given level of production).

Expenditure Category IMPLAN Industry Sector

Lodging Hotels and motels, including casino hotelsOther accommodations

Transportation Retail - Gasoline stationsAutomotive equipment rental and leasingTransit and ground passenger transportationOther personal services (parking garages)

Food & Beverage Food services and drinking places

Retail Purchases Retail - Clothing and clothing accessoriesRetail - Sporting goods, hobby, book and musicRetail - General merchandiseRetail - MiscellaneousRetail - Nonstore

Recreation/ Performing arts companiesEntertainment Spectator sports

Promoters of perform. arts & sports and agents for public figuresMuseums, historical sites, zoos, and parksAmusement parks, arcades, and gambling industriesOther amusement and recreation industries

IMPLAN (Impacts for PLANning) software, version 3.1, IMPLAN Group LLC.

IMPLAN Industry Sectors Used to Model Direct Tourist Spending

34

following table. We used the per person spending

profiles for overnight and daytrip tourists as shown in

the table above and applied information from the 2007

Longwoods survey and the 2011 Davidson-Peterson

survey for the state of Kentucky on visitor experiences

and activities to apportion the broad category spending

among the more detailed industries. We then modeled

the impact of a thousand tourists of each type and

scaled up the results to our average annual tourist

estimates (12,217 overnight and 40,786 daytrip).

The results of the model indicate that direct

spending by people from outside of the Louisville metro

area attending performances at The Kentucky Center

supports about 93 jobs in the 12 county Louisville

MSA with a combined payroll of $1.3 million. This

tourism adds $4.4 million dollars of economic activity

to the regional economy. Once we account for the

multiplier effects, the tourist draw of The Kentucky

Center leads to $8.3 million of economic output in the

MSA and supports 125 jobs with an annual payroll of

almost $2.4 million.

School groups also have a small economic

impact, though they do not typically spend much

money on their trips. However, school groups often

Rather than modeling a change to a single industry we are interested

in the impact of repeated spending on a basket of goods across a range

of industries. We have translated the five broad spending categories used

in the spending profiles into 18 IMPLAN industry sectors, as shown in the


Direct Effect 35 $2,001,984 $572,646Indirect Effect 7 $855,838 $234,009Induced Effect 7 $923,143 $232,214

Total Effect 49 $3,780,966 $1,038,869

Direct Effect 58 $2,370,563 $746,187Indirect Effect 8 $977,801 $274,905Induced Effect 9 $1,183,873 $299,152

Total Effect 76 $4,532,236 $1,320,245


Total Effect 125 $8,313,202 $2,359,113

Average Annual Economic Impact to the Louisville MSADerived From Non-Resident Attendees of Performance Events at


Source: Customized IMPLAN (IMpacts for PLANing), version 3, model of the Louisville MSA, using 2011 economic data.Note: Indirect impact refers to business-to-business spin-off spending; Induced impact refers to household spending that is a result of increased earnings.

Overnight Tourists

Daytrip Tourists

Total Tourism Impact

35


Direct Effect 3.0 $102,326 $28,033Indirect Effect 0.4 $44,379 $12,942Induced Effect 0.4 $47,059 $11,968

Total Effect 3.8 $193,764 $52,943


Average Annual Economic Impact to the Louisville MSADerived From Non-Resident School Groups at


Total School Group Impact


stop to have lunch at area fast food restaurants, thereby adding dollars to the

local economy. We assumed a figure of three dollars per head in fast food

spending for out-of-town school groups (children are likely to spend more

per person, but not every group eats at such an establishment). Ticket revenue

from school groups outside of the metropolitan area is new money to the

local economy that helps directly support The Kentucky Center’s resident

companies. The average school group performance ticket price during the four

fiscal years was $7.25. There were on average 9,983 school group attendees

per year from outside of the Louisville MSA in the school group database.

We therefore estimate that annual economic impact relevant spending by

school groups attending KCPA school performances was $72,377 for tickets

and $29,949 for meals. We applied those figures to the IMPLAN sectors for

performing arts companies and food and drinking places and estimated the

model. The results indicate that direct spending by

non-MSA school groups attending performances at

The Kentucky Center supports about 3 jobs in the

Louisville metro area with a combined payroll of

$28,000, and adding $102,000 dollars of economic

activity to the regional economy. Once we account

for the multiplier effects, the school groups activities

of the resident companies leads to almost $200,000

of economic output in the MSA and supports 4

jobs with an annual payroll of about $53,000.

While school groups have an admittedly

small economic impact, touring Broadway shows

and other touring artists have a much bigger effect

on the local economy. Some of the more elaborate

Broadway productions, such as Lion King or

Wicked, bring as many as 120 people with them

(aside from cast members there are stagehands,

musicians, make-up artists, hairdressers, wardrobe

assistants, physical therapists, and maybe even

tutors for child cast members). Louisville has been

averaging about eight-and-a-half weeks of touring

Broadway productions for the past six years. In

addition, the Kentucky Center hosts 40 to 50 touring

artists (musicians or musical groups, dance troupes,

etc.) each year and they all bring more people than

36

just the performers on stage to town. We estimate that this is the equivalent of about another week-and-a-half of Broadway sized

productions. Assuming an average touring Broadway production brings 100 people, ten weeks of hosting such casts and crews means

70 days and 7,000 people-days of spending by out-of-towners in the local economy.

It is very difficult to get a good grasp of any local spending that touring artists may do that is directly associated with putting

on their shows, such as renting equipment or hiring local labor, so we will only estimate the economic impact of spending we can

discuss with some authority, which is the personal spending of cast and crew and local advertising. According to The Broadway

League, a touring production in a city of Louisville’s size spends roughly $140,000 on advertising during a one week run. Our

IMPLAN model therefore includes $1.4 million assigned to the advertising and related services sector.


Direct Effect 18 $2,094,855 $444,257Indirect Effect 6 $741,232 $197,124Induced Effect 6 $815,136 $205,425

Total Effect 30 $3,651,223 $846,806



Note: Impact takes into account personal spending of all performers and other personnel traveling with touring shows, and advertising costs.

Average Annual Economic Impact to the Louisville MSADerived From Touring Broadway and Other Touring Shows at


Total Touring Shows Impact

37

During the time period of our study the Actors

Equity Union contract per diem rate for touring Broadway

productions was about $120. Company members can spend

this any way they like, but the contract also set an average hotel

room cost (the producers must present two official housing

choices) of about $70 per night. Since the salaries of the

company members are actually quite modest (and their time

is constrained) we assume they are not spending additional

money. We divide the remaining $50 per diem as follows:

$25 spent in area restaurants; $10 spent on groceries; $5 on

incidentals, mostly personal items; and $10 going unspent

and pocketed. On an annual basis that amounts to $490,000

spent in area hotels, $175,000 in restaurants, $70,000 in grocery

stores, and $35,000 in health and personal care retail.

The IMPLAN results estimate that direct spending by

personnel traveling with touring artists who perform at The

Kentucky Center supports about 18 jobs in the 12 county

Louisville MSA with a combined payroll of close to $445,000.

This activity adds $2.1 million dollars to the regional economy.

After the multiplier effects, the touring productions at The

Kentucky Center lead to $3.6 million of economic output in

the MSA and support 30 jobs with an annual payroll of almost

$850,000.

38

Combined Tourist, School Group, and Traveling

Company Economic Impact

Putting all three areas of economic impact together

(non-resident attendees, school groups from beyond the

metro area, and traveling production companies), we estimate

that performance events at The Kentucky Center are annually

responsible for $7.2 million in new direct spending in the

Louisville metropolitan area, supporting 115 jobs in the 12

county Louisville MSA with a combined payroll of $1.8

million. The ongoing local economic output supported is $6.6

million. But after the subsequent rounds of spending and re-

spending of that money by local businesses and households,

the ultimate effect of The Kentucky Center’s fine facilities

being able to host such attractive performance events is $12.2

million of economic output supporting 160 jobs with an

annual payroll of about $3.3 million.

The Tax Impact for Local and State Governments

Tourists pay taxes directly to state and local

governments in the form of transient room taxes, sales

taxes on retail purchases and automobile rental, and gasoline

taxes. Additionally, the people employed in tourism related

industries pay local income and occupational taxes and state

income and sales taxes. These are the largest taxes collected



Total Effect 160 $12,158,189 $3,258,862


Average Annual Economic Impact to the Louisville MSADerived From Performance Events at


Total Tourist, Touring Shows & School Group Impact


by state and local governments and for which we can make informed estimates.

Our estimates of the tax revenues generated by tourism activity are summarized

in the next table.

State and local governments benefit from over three-quarters of a

million dollars in tax revenues generated annually by the economic impact of

The Kentucky Center. Of that, the tourists and touring shows themselves pay

$435,000 directly, half in sales taxes and about 40 percent in transient room

taxes when they stay in area hotels, motels, and Bed & Breakfast establishments.

While Jefferson County benefits from about $80,000 in transient room tax

collections, the state of Kentucky gains the lion’s share, with $308,000 in sales

and gasoline tax revenues from tourist and touring show spending each year.

Employees of tourism affected industries, through their income and

household spending, contribute roughly $334,000 annually to state and local

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governments. About two-thirds of that benefit goes to the state of Kentucky in the form of income and sales taxes. The state of

Indiana collects $61,000 in taxes from its residents’ KCPA tourism related income. Local governments in Jefferson County benefit

from $53,000 in occupational taxes on income directly or indirectly associated with The Kentucky Center’s tourism attraction. Of that,

Jefferson County Public Schools receive about $15,000.

It is important to note that all the economic and fiscal impacts discussed are continual and recurring benefits of The Kentucky

Center’s ability to attract productions and performers that draw visitors from an area ranging from one to five hours drive from

downtown Louisville. The jobs that are supported by the incoming dollars continue from year to year, while the dollars of output,

payroll, and tax revenues recur year after year.

Transient Room Taxes

Retail Sales Taxes Gasoline Taxes Totals

Jefferson County $79,835 $79,835So. Indiana Counties in MSA $6,343 $6,343State of Kentucky $79,941 $196,735 $31,805 $308,482State of Indiana $11,101 $24,609 $5,277 $40,986

Totals $177,220 $221,344 $37,082 $435,647

Local Income/ Occupational

TaxesState Income

TaxesState Sales

Taxes Totals

Jefferson County $53,298 $53,298So. Indiana Counties in MSA $9,803 $9,803State of Kentucky $94,078 $115,160 $209,239State of Indiana $28,968 $32,493 $61,462

Totals $63,101 $123,047 $147,653 $333,801

Derived From Non-Resident Attendees, Touring Shows, and School Groups

Note: The tax figures paid by MSA residents include the indirect and induced economic impacts of the tourism industry in the metro area.

Taxes Paid by Tourists, Touring Shows

Taxes Paid by MSA Residents

at The Kentucky Center for the Arts, Fiscal Years 2010-2013

Estimated Average Annual Tax Revenues

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Some of the benefits of The Kentucky Center do not

lend themselves to quantification in an economic impact analysis,

but are important to consider in a comprehensive treatment

of KCPA impacts. We cannot know how many residents have

businesses that actively seek out or depend on The Kentucky

Center performance-goers or touring productions and artists for

a significant chunk of their revenues. We also do not know how

many businesses decided on a location in the Louisville region

in part because of the presence of amenities like The Kentucky

Center’s excellent performance venues, resident companies,

and schedule of touring shows and artists. Another important

but difficult to measure impact is how The Kentucky Center

contributes to the economic vitality of downtown Louisville,

though we know that the area is vastly different and better than

it was thirty years ago. Finally, some events have a philanthropic

component that improves the well-being of residents who

benefit from the event.

Ignoring community and social impacts of The

Kentucky Center diminishes the value of an economic analysis.

However, guesses about the value of some impacts are likewise

unacceptable. Perhaps the best alternative is descriptive material

offered in addition to the impact analysis to provide the reader

with a more comprehensive understanding of the full scope

of the benefits of The Kentucky Center to the Louisville and

Kentucky economy.

We conclude this report with a description of benefits

that were not captured by the economic analysis. We begin with

community outreach programs, then discuss advanced student

education programs, and finally programs for educators.

Community Outreach Programs

The Kentucky Center engages the community through

several outreach programs. From children’s programming

to nurturing aspiring artists to bettering the lives of hospital

patients, The Kentucky Center’s outreach efforts add to its

economic impact on the city of Louisville. Many of the benefits

of these programs are hard to capture in a truly economic sense,

but their effects are far-reaching; they contribute to an overall

positive environment, develop community spirit, and support

mental, emotional, and creative health. The programs that bring

these benefits to the community are Arts in Healing, ArtsReach,

and ArtsReach Kentucky.

Arts in Healing

Arts in Healing is a program designed to bring the joy

of the arts to patients healing from whatever ails them, from

substance abuse to movement disorders, from adults suffering

wounds of war to children recovering from physical and

emotional abuse and abandonment, from seniors embracing the

Social and Community Impacts of The Kentucky Center

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pursuit to bring the arts to people in need. As expected, the

surveys are only completed by willing and able participants, but

are able to provide a picture of the mood and disposition both

pre- and post-program. While this evaluation process includes

the collection and analysis of quantitative and qualitative data,

KCPA does not correlate any of the outcomes with health

diagnoses or prognoses. The incentive for these programs is to

help people living with health conditions and to alleviate stress

for both patients and caregivers, not to seek cures for their

participants. By following national and international research

on the topic of arts in healthcare and arts in healing, KCPA is

equipped with knowledge about the potential positive effects

of such programming. Additionally, they include such research

in many of their foundation applications and reports, setting

an industry standard for responsibility and stewardship. The

budget for this program is $150,000, and the staff consists of

one full-time employee and one intern. The program operates

through the use of 19 contract artists, who put in about 620.5

contact hours per year, at a rate of $65 per contact hour. Most,

if not all, of the artists who participate in Arts in Healing are

residents of the Louisville metro area. Arts in Healing serves

over 17,500 people per year, including over 9,000 patients, over

4,000 staff, and nearly 4,000 caregivers and family members.

end of life to families dealing with homelessness, or patients

undergoing cancer treatment. The Kentucky Center partners

with Kentucky’s vibrant arts scene and Louisville’s renowned

healthcare providers to select professional local artists and

provide them with intensive training from national and regional

trainers. Individually designed programs are developed around

the needs of patients, family and staff of healthcare facilities,

ensuring the most effective and impactful experience for all

participants.

The Arts in Healing programs take place in healthcare

facilities of varying kinds across the city, in an attempt to bring

the arts into the community, as well as to better serve participants,

many of whom are unable to leave their facilities. There are

many benefits to the Arts in Healing program, including creative

self-expression, relief from pain and anxiety, and empowerment

in an environment where patients and families often have little

control. Patients, health workers and caregivers have all praised

the program for providing positive experiences during difficult

times.

The success of the program is measured using a three-

prong evaluation, which involves surveying artists, staff, and

participants. The results from these surveys are evidence of

the unique community in which the programs are provided and

allow KCPA to better facilitate each specific population in their

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ArtsReach

When The Kentucky Center opened its doors 30

years ago, one of its key missions was to bring the arts to the

community. Not only by providing a home for the performing

arts but also by making the arts accessible to everyone. That

is exactly what ArtsReach does. By serving as a community

connection, ArtsReach is nurturing and developing new,

young, and diverse artists and audiences. ArtsReach is also

dedicated to providing professional development and network

opportunities for local community center staff. In addition to

quarterly meetings, ArtsReach offers an Institute through which

community center staff members immerse themselves in hands-

on art workshops, learn about raising funds for the arts and how

to design and implement art programs.

For 23 years, ArtsReach has collaborated with community

centers and organizations throughout Jefferson County. Since

1991, ArtsReach has engaged youth in community settings

through studio arts instruction in dance, violin, and visual

arts, residencies with renowned artists, affordable tickets to

performances, and the opportunity to perform at The Kentucky

Center at the monthly Open Mic series, and the annual Keepers

of the Dream Celebration of Dr. King’s Vision and Showcase

programs. All of those performance opportunities are produced

in collaboration with River City Drum Corp.

There are several pieces to the ArtsReach program, including:

ArtsReach Studio: This program provides ongoing

arts instruction with professional artists in Suzuki violin, visual

arts and dance. Students receive an average of three hours

of instruction per week and participate in special residency

workshops with guest artists. Participants learn new skills,

expand their horizons and develop a sense of self, well-being

and belonging. Dance and violin students perform in the annual

Keepers of the Dream & ArtsReach Showcase.

Keepers of the Dream, a Community Art Celebration of

Dr. Kings’ Vision: ArtsReach produces Keepers of the Dream in

collaboration with River City Drum Corp and Louisville Metro

Government. The annual celebration features inspirational and

thought provoking performances by ArtsReach Studio students,

and numerous community artists, as well as the presentation of

Louisville Metro’s Dr. Martin Luther King Freedom Award,

which recognizes citizens that have dedicated their lives to

promoting justice, peace, freedom, non-violence, racial equality

and civic activism.

KCard: The Kentucky Center’s KCard gives ArtsReach

Studio students and participating ArtsReach community centers

the chance to experience some of the world’s finest in performing

arts for just $3 per ticket. Nurturing and developing new and

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young audiences is an important step toward creating a sustainable arts

environment in the community.

Open Mic: This program provides a safe and supportive

environment for young people to express themselves and share their

talents. ArtsReach partners with River City Drum Corp’s Music Production

Mentoring Group to produce the monthly Open Mic series that welcomes

performer of all ages and disciplines.

Arts Reach Far Reaching: This program provides art supplies,

workshops, residencies and subsidized tickets to teens with autism and

youth living in residential treatment facilities. The project is funded by the

Crusade for Children and partners with Dreams with Wings, Alternative

Placement Services, YMCA Safe Place Services, St. Josephs, Uspiritus, and

Maryhurst.

ArtsReach Kentucky: Fully supported by the Kentucky Arts

Council, The Kentucky Center partners with arts and community

organizations in six counties (Boyd, Christian, Fayette, Franklin,

McCracken and Montgomery) to focus on professional development and

grant opportunities.

While the staff consists of just one full-time and one part-time

employee, the budget is nearly $400,000, and ArtsReach and ArtsReach

Far Reaching annually contract with more than forty artists who put in

nearly 1,300 contact hours.

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Advanced Student Education Programs

Governor’s School for the Arts

A three week residential summer program for the state’s

finest high school artists, The Kentucky Center Governor’s

School for the Arts (GSA), with its faculty of professional

teaching artists, provides high level arts training for over two

hundred students. Starting in 2014, Centre College will be the

host campus of this often life-changing experience. The free

program provides conservatory style instruction in nine art

disciplines, master classes with world-renowned guest artist

faculty, leadership mentoring, community service opportunities

and an inter-disciplinary philosophy that allows for graduates

to be college and career ready. In addition, the GSA summer

college fair hosts 40 plus universities and colleges. GSA has a

full time artist-in-residence who provides leadership training, a

full time counselor, and a counseling support staff person. The

budget for the summer program is nearly $350,000, and served

223 students from 49 Kentucky counties in 2014. The budget

helps support 40 part-time employees as well as contract artists

serving as faculty, counselors, artists-in-residence, and guest

artists.

Prior to the summer program, beginning during

the previous fall two parts of the GSA program are vital to

enhancing its mission of providing a potentially life-changing

arts experience to young artists from all corners of the state. The

first is recruitment initiatives and the second is the ArtShops

program.

There are five recruiters who each fall visit any area of

the state that has not had a student apply and/or attend GSA

for 3 years. Two multi-cultural recruiters work in Fayette and

Jefferson counties with a focus on increasing the diversity of

the student population, and three recruiters work throughout

the eastern, south central and western parts of the state. The

recruitment budget is about $3,500, and 1,144 students were

served last year. Of those, 242 were minority students.

Every fall, GSA holds a one-day ArtShops throughout

the state. They are free outreach sessions that focus on increasing

diversity and participation in GSA’s summer program by

reaching underserved high school students throughout the state.

The day-long sessions allow high school freshmen, sophomores

and juniors to participate in a hands-on arts enrichment

opportunity close to their hometown under the guidance of

professional teaching artists from their region. In addition,

these workshops assist students with preparation for their GSA

audition. ArtShops also include parent/teacher workshops that

discuss the GSA summer program and potential scholarship

opportunities. The budget for ArtShops is about $16,000, which

helps fund the 27 contract artists involved in the program.

Alumni of the Governor’s School for the Arts are

eligible for 24 GSA specific scholarships, invited to attend the

College and Career Day in the fall (where representatives from

45

Teachers attending the Academies for Arts Integration

receive training in understanding relevant Kentucky curriculum

standards, how to integrate creative and performance art

activities and strategies with other subjects, how to properly

assess creative work, how to make collaborative lesson planning

and co-teaching work for the classroom, and what accountability

in this process means. While there is a competitive application

process for attending an Academy, priority is often given to

teams of teachers of different subjects from the same school

attending together.

The Academies are funded by the Kentucky Department

of Education, and it has a budget of $60,000. This helps

supports 3 KCPA staff members as well as 8 trainers.

In addition to helping teachers bring the arts to their

students The Kentucky Center also helps bring practicing artists

into the schools. The Gheens Artist Residency Program helps

make possible community outreach by some of the nationally

recognized artists who perform on The Kentucky Center’s

stages. It facilitates workshops, short performances, talks,

master classes and creative interactions at various locations out

in the Louisville community, including schools, hospitals, and

community centers. It serves well over 6,000 people each year

and eight staff members administer the program.

as many as 80 colleges and universities from across the country

audition and interview graduates), and can apply up to twice a

year for professional development monies through the Toyota

Alumni Fund (which has funded $100,000 worth of projects

over the last ten years, from singing tours of Europe to dance

training at The American Ballet Theatre).

About half of the more than $850,000 total budget

comes from the Kentucky General Assembly, and the remaining

funding necessary to run the program is raised by The Kentucky

Center from a variety of public and private sources. There

are three full-time staff members who work year-round as

administrators.

Teacher Education Programs

The Kentucky Center has a number of teacher training

initiatives that seek to help teachers integrate the arts with other

parts of the school curriculum. Chief among these initiatives is

The Kentucky Center Academies for Arts Integration. These

are five-day teacher professional development seminars that

focus on the arts (two art forms) or arts integration (with such

subjects as World Languages, Social Studies, and Literacy).

They are held at various sites throughout the state, often in the

summer months. Recent and future locations include Bowling

Green, Danville, Frankfort, Murray, and Manchester.

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Each of the community outreach and education

programs we have highlighted (Arts in Healing, ArtsReach,

Governor’s School for the Arts, Academies for Arts Integration,

and Gheens Artist Residency Program) impacts people from all

regions of the state. Thousands of people each year are enriched

through direct contact with local, regional, and nationally touring

artists. And many more benefit from the valuable training that

KCPA programs provide to teachers and community center

staff from all parts of Kentucky. The Kentucky Center is able to

do all of this with an outreach and education budget of less than

$1.5 million. Though we cannot actually measure them, it seems

safe to say that the benefits of these programs far outweigh the

costs. The Kentucky Center for the Performing Arts has been


an economic impact analysis of the kentucky center for the

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