City leaders spent three hours Tuesday debating the pros and cons of the controversial CentrePointe construction project, a discussion several Urban County Council members said they should have had two years ago.
”This is the first time the council has sat down and really discussed this,“ councilman Dick DeCamp said. ”I think it is really ludicrous that we are having our first discussion of (tax incentives for the project) at this late date.“
CentrePointe is a proposed $250 million hotel, condominium, retail and office complex slated to be built by developers Dudley and Woodford Webb on a prominent downtown block.
Preservationists favor development of the block, but want to see some of the existing structures saved.
Darby Turner, attorney for The Webb Companies, answered questions about the project from council members, who asked basic questions about how tax increment financing worked.
Turner said the company would like to build about $35 million in public infrastructure as part of the project. Tax increment financing (TIF) would allow the company to recoup that money over time from the tax revenue generated by the project.
Council members wanted to know a variety of details, including: What can TIF money be used for? Do the Webbs need TIF money to make the project work? What amenities would the city get if it partnered with the Webbs?
The wide-ranging discussion was sparked by a joint resolution introduced by DeCamp and councilman Tom Blues that would have prohibited CentrePointe developers from razing historic structures on the block until CentrePointe's TIF application was approved by the council.
Also, it would have required the developers to show that financing for the massive project is ”secured and verified.“
DeCamp feared a repeat of the 1981 World Coal Center fiasco, he said. The future Gov. Wallace Wilkinson had planned to build a 50-story tower, and the Phoenix Hotel was razed. However, the project never got built.
Instead, the city was left with a large hole in the heart of downtown for several years.
Blues said the resolution was not meant to block the project. ”It is intended to bring clarity to the financing of the project,“ he said.
Turner said CentrePointe had private financing lined up and will not apply for TIF money ”unless the city asks us to.“
After the lengthy discussion, the resolution failed.
The Council did pass by an 8-to-5 vote a motion to place a resolution on Thursday night's docket to encourage the Webbs to apply for TIF funding in order to get public improvements for downtown.
Linda Gorton, initially opposed to the CentrePointe TIF, changed her mind because she said it was the only way the city could afford amenities such as a redesigned Phoenix Park.
TIF funds can only be used for public infrastructure such as sidewalks, parks, parking garages and public art.
For the first time, Turner said one of the improvements could be renovating the old Fayette County Courthouse and adapting it to another use, possibly new space for the Explorium, the children's museum.
Councilmen Julian Beard, Jay McChord and George Myers said they favored encouraging CentrePointe to apply for TIF funds.
Vice Mayor Jim Gray said he was confused by the Webbs' stance on TIF funds. ”If CentrePointe could be built with private money, why had it even considered TIF funding?“ he asked.
To be eligible for TIF money, state law stipulates that a project must show it needs public assistance to be built.
John Farris, a former state finance secretary who helped draft the 2007 TIF legislation and is now a consultant to the Webbs, responded that ”we are talking about two different projects.“
CentrePointe could be built as a privately funded project. Or, if the city wanted to participate, it could be a public-private partnership, bigger in scope with public amenities, he said.
”If we encourage the public-private partnership, then meaningful dissent would have to be listened to, like retaining some of the historic fabric of the block,“ Gray countered.
The Webbs will meet with council members to discuss what public infrastructure to include in the TIF application, Turner said. However, he said there would be no compromise on saving the old buildings and altering the design of the 35-story structure.
Several council members expressed concern that the council was being rushed into making a decision.
”Here we are, almost at the 11th hour with a gun to our head to do TIF or not do TIF,“ said Councilman Don Blevins.
Blevins said his fear was that the complex would fail. ”I hope I'm wrong. But what if I'm right?“ he asked. ”What we have is a vertical Lexington Mall, right in the heart of downtown.“