JEFFERSONVILLE, Ind. (AP) — The southern Indiana city where Papa John's founder John Schnatter began his pizza business has removed his name from a historic gym after he resigned from the company's board for using a racial slur.

Jeffersonville Mayor Mike Moore first heard of Schnatter's admitted use of a slur against black people on Wednesday. Schnatter's name was removed from the Nachand Fieldhouse only hours later, the News and Tribune reported .

The facility is "about to become the gymnasium for our new downtown elementary school," Moore said. "I can't have children who are walking into this elementary school to get an education to have this hanging over their heads. I do not want that name and these comments crossing any little child's mind that's walking into school every day."

Schnatter began his restaurant business decades ago in Jeffersonville, where he opened the first Papa John's. He resigned last year as CEO after blaming disappointing delivery sales on the outcry surrounding professional football players kneeling during the national anthem.

The chain announced Wednesday that Schnatter resigned as board chairman after apologizing for using the slur during a conference call in May. Moore said he was "fuming" when he first heard that Schnatter said the slur during a media training exercise.

"It's just horrid news," Moore said. "I mean, this is not only from the mayor dealing with somebody who's made a large donation. I grew up with John. I've known John since I was 4 years old. These words almost knocked me down."

Schnatter's name was added to the gym last year after he donated $800,000 for renovations. Moore said a representative and attorney for Papa John's mentioned potential legal ramifications for removing Schnatter's name because of a contract tying his name to the fieldhouse in exchange for the donation.

The mayor said he hopes Schnatter decides to let the city keep his contribution, but that Jeffersonville can make do without the money if he chooses otherwise.

"I understand people of popularity and world fame are under a lot of scrutiny, but there's never a proper time to use that word," Moore said. "It's not a word you're supposed to use, and if you're 56 years old, you shouldn't need me telling you that."

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Information from: News and Tribune, Jeffersonville, Ind., http://www.newsandtribune.com