Attorney says CentrePointe groundbreaking 'is imminent,' but still needs key approvals

bmusgrave@herald-leader.comOctober 29, 2013 

CentrePointe_AptBldg02.jpg

The newest designs for CentrePointe, released Oct. 2.

CMMI ARCHITECTS

Developers of the long-delayed CentrePointe development say they hope to announce a date for a groundbreaking soon even though the development hasn't received key approvals from city or federal officials.

Darby Turner, a lawyer for the Webb Companies, said an announcement on the groundbreaking should come in the next week. Turner also said the company is not concerned that the U.S. Army Corps of Engineers has not said whether federal permits will be required for the project because of its proximity to the Town Branch creek.

Additionally, developers cannot move forward until the city approves financing behind the controversial project, which includes an office building, an apartment complex, a Marriott hotel, and retail and restaurant space.

Turner and city officials said Tuesday that those financial documents are under review.

"The groundbreaking is imminent," Turner said Tuesday. "Dudley will have an announcement in the next week or so."

Developer Dudley Webb has previously said that he wanted to have a ceremonial groundbreaking by late October and wanted to start construction on the development's 700-space parking garage by early November.

Webb told the Courthouse Area Design Review Board this month that he has a tenant for the office building and that the tenant needs for construction to start in November to be in the building in 2015. Webb has said the tenant is an engineering company, but he has not identified the firm.

According to documents obtained by the Herald-Leader through an open records request, the Webb Companies and its engineers, Strand Associates, had asked the Kentucky Heritage Council and the state Historic Preservation Office in early October if it needed additional archeological surveys on the site in downtown Lexington. The Webb Companies has to consult with state preservation officials as part of its request to the U.S. Army Corps of Engineers to waive the requirements for a 404 permit, a federal permit required if there is disturbance to wetlands or any moving body of water. Town Branch runs under Vine street, which borders the project.

According to the documents, Strand Associates did not apply for a waiver of the 404 permit until Oct. 3.

Carol Labashosky, a spokeswoman for the U.S. Army Corps of Engineers Louisville District, said the office expects to make a determination on whether the project needs the permit in the next one or two weeks.

Turner said the developers are confident that it isn't needed.

"We almost didn't make the application and decided to do so at the last minute out of an abundance of caution," Turner said.

According to a letter dated Oct. 18 from the Kentucky Heritage Council, the state historic preservation group said that if the Army Corps requires a permit, additional environmental surveys of the site would be needed before construction begins.

Moreover, the Heritage Council letter warned the Webb Companies about starting the project before the Army Corps made its final determination.

"We strongly caution against any activity on this site prior to completion of all required compliance reviews, as any work conducted ahead of permit issuance could be viewed as anticipatory demolition," the letter said.

Craig Potts, executive director of the Heritage Council and the state historic preservation officer, said the office conducts roughly 4,000 similar reviews to determine whether there are historical properties that should be protected.

"We know that on that block, there were a number of historic resources where significant archeology is still likely to be present," he said.

But Potts said the office will become involved with the project only if the Army Corps of Engineers decides that a 404 permit is needed.

Turner said that they are confident that there is little of historical significance on the site because the entire block was demolished in 2008. Much of what is on the ground is fill dirt that was brought in from another location, Turner said.

Meanwhile, the city is still trying to determine if the Webbs have financing in place and if other engineering work has been completed before it issues a permit.

The state approved tax -increment financing, or TIF, for the CentrePointe development in July. Tax-increment financing will use tax revenues generated from the project to reimburse developers for the cost of the 700-space garage. The costs eligible for recovery include $31.9 million to be spent on a parking garage and $16.9 million of the amount spent for financing it.

But the Urban County Council approved stiff guidelines in July for the Webb Companies in order for the development to go forward as a TIF project. Among the key provisions in that agreement, Webb must show city officials that he has financing for the project, must submit to the city a geotechnical report on the feasibility for the underground garage, and must certify that there is enough sewer capacity for the development.

City spokeswoman Susan Straub said the financial information is under review, but the city has not received the geotechnical report or certification from the city's division of water quality regarding sewer capacity.

"The developer agreed to these conditions in July, when he signed a master development agreement," Straub said. "Public dollars have been pledged to this project, and it's our responsibility to ensure those dollars are appropriately invested. That means we must have confidence the development will have real and sufficient private financing and that state and local approvals can be met before the city signs off."

Beth Musgrave: (859) 231-3205. Twitter: @HLCityhall.

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