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State board approves financing for public projects

A Kentucky state board has given final approval—for $69.8 million—to the Urban County Government's plan for public improvements around the CentrePointe project in downtown Lexington, Ky., according to www.kentucky.com.

Major improvements planned include adding a parking garage, restoring the Fayette County Courthouse and courthouse plaza, and a new Phoenix Park. The city has two years to begin the tax increment financing (TIF) projects. Spokeswoman Susan Straub says the city does not anticipate starting the TIF projects until the currently empty block (because CentrePointe construction has stalled) is producing new tax revenues; if no projects are started within the two-year period, the city can apply for a two-year extension.

The purpose of TIF projects is for governments to invest in improving infrastructure and then pay for those improvements using new tax revenue, which the areas are expected to generate when the projects are completed. With this specific proposal, the Urban County Government would recoup the costs through an 80 percent recovery on additional withholding, sales and real estate property taxes.

The TIF plan largely depends on the construction plans of CentrePointe developers The Webb Companies, Lexington. A report from consulting firm Economics Research Associates of Chicago regarding CentrePointe states: "Every project will have some question marks as it goes into development. We believe the question marks are more with the lease concessions necessary to sign retail and office tenants and the time it may take the hotel to reach its revenue per available room forecasts. However, we do not believe any of these is a major barrier to the project's feasibility."

10/7/2009