Last year, NPQ reported on the $100 million replica of Noah’s Ark in Williamstown, Kentucky, a creationist theme park called The Ark Encounter. The theme park drew criticism when it received an $18 million tax break from the state after initially being denied due to the park’s religious affiliations. However, the judge later granted the tax break and even allowed the organization to refuse to hire those not following the same religious beliefs. In addition to receiving the $18 million tourist attraction tax break, The Ark Encounter gets a tax increment financing deal that gives them back 75 percent of property taxes due on the increase in land assessments for 30 years.
A religiously affiliated theme park that is receiving government-sanctioned tax breaks and discriminating against applicants based upon religion at the same time drew backlash, since it gives the appearance that the state is actively promoting one religion and ignoring the separation of church and state.
Back in 2010, Ark Encounter chose to operate as a for-profit company to qualify for the tourist attraction tax break, and it seems that this incentive has been beneficial for the organization. The incentive is not available to nonprofits.
Recently, the Freedom From Religion Foundation, a national group that promotes separation of church and state, found the Ark Encounter in breach of their agreement. The Ark Encounter owners transferred the theme park to Crosswater Canyon, a nonprofit subsidiary of Answers in Genesis, for $10 in June. The deed describes the property as worth $18 million even though the Grant County PVA has assessed the land for $48 million. As a nonprofit, Ark Encounters could claim religious tax exemptions that it could not qualify for as a for-profit. The debate between business and charity status, which NPQ has reported on repeatedly, brings to the light the importance of ethical standards of an organization.
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The transfer happened at the same time that the Williamstown City Council’s new approved tax took effect. The city imposed a 50-cent tax on every admission ticket sold at $40 for adults and $28 for kids, to go towards assisting the city’s emergency services that cover the park, whose attractions include a petting zoo and zipline tours.
The Ark Encounter negotiated a cap with City Council to pay upwards of $500,000, but the offer was rejected. Nonprofits are exempt from this fee.
However, transferring the organization to a nonprofit resulted in The Ark Encounter losing the $18 million tax incentive it had as a for-profit and on Friday, July 21st, the property was transferred back to the LLC. All this transferring back and forth, given the public issues surrounding the park, has created much doubt about the motives of the organization. Much of what the organization has done is rather standard, but the very public nature of their fight has put them in the limelight. Many nonprofits have associated LLCs, but they are considered for-profit for local tax purposes. Additionally, negotiating pay for emergency services and the conveniently timed nonprofit transfer make it seem like the organization is not supportive of public safety. The transferring back to the LLC could be viewed as a publicity stunt to get back in the graces of the community, and it is all incredibly unpleasant.
Could The Ark Encounter be experiencing financial complications and afraid of disclosing that to the public? There are reports that businesses within one mile have not been seeing enough customers coming from the ark park. Furthermore, the economic impact of the negative publicity of the theme park has yet to be determined. The Ark Encounter may need to consider more transparency to the community that they serve in order to figure out the best ways to support and sustain their businesses.—Suja Amir
