Lexington has $1.2 million in leftover urban development grant money, and at an Urban County Council work session Tuesday the stage was set for deciding how the money might be used.
Urban County Council member Bill Farmer said there could be 15 ways to use the money for the good of neighborhoods and the community. "But we need to have that discussion," he said.
The money was left over from a grant originally given to the failed Lexington Festival Market, across the street from Victorian Square downtown.
Irene Gooding, director of the city's division of grants and special programs, told council the city had received money from the Department of Housing and Urban Development in the 1980s for economic development. The city invested in Victorian Square and Festival Market to create jobs for low-income people, and the developers were to repay the city.
Victorian Square repaid the city, but Festival Market stopped repayment after it went under in the mid-1990s. Both projects were developed by Webb Properties.
A court action ordered Festival Market to liquidate its assets and repay both the city and Kentucky Central Life Insurance, which had partnered to develop the Festival Market. Festival Market eventually repaid the city $2.3 million.
The city spent some of that money on its downtown streetscape plan, a housing project off Georgetown Street called Rain Garden Way and on Cadentown's Rosenwald School, but $1.2 million remains.
Councilman Kevin Stinnett floated the idea that some of the funds could be used for restoration of the Kentucky Theatre, in particular a digital sound system.
Mayor Jim Gray said after the meeting that the $1.2 million would be well-spent on the 21C Museum Hotel downtown. When the museum and hotel was announced for the historic 15-story Fayette National Bank Building in September, hotel owner Steve Wilson stressed that the $38 million project depended on city and state financing, including a $2 million urban development action grant loan.
"I'm hoping council would be patient and keep in mind that the 21C is a transformative project that will create 150 direct jobs, a world class art museum and restore a landmark buildings that has defined the city for 100 years," Gray said. "It will leverage substantial private investment to grow our economy."
The money to 21C would be a loan, not a grant or gift and would be repaid "so those funds could be redeployed in the future," Gray said.
Beverly Fortune: (859) 231-3251. Twitter: @BFortune2010