RICHMOND — A company that is co-owned by state Sen. Ed Worley, D-Richmond, will get about $410,000 a year in rent from Kentucky taxpayers under a deal arranged by Madison County Judge-Executive Kent Clark, Worley's friend and political ally.
Worley, who is the Senate Democratic leader and a private developer, spent $765,000 over two years buying up most of a downtown Richmond block full of 19th-century, Italianate-style buildings, which he demolished.
He's now building a two-story, brick-veneer office building on the site to house Madison County's family courts division.
Worley said his position in the General Assembly doesn't make his development deal with the county and state court system a conflict of interest when he takes state money in his private life.
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He said his development companies sometimes get work from local and state governments, including Eastern Kentucky University in Richmond, all of which he has power over as a legislator who helps craft the state budget.
"We bid on projects all the time," Worley said. "I'm not prohibited from building for or having relationships with the city or the county or the state if something is put out for a solicitation or a competitive bid."
Initially, Worley said, he couldn't find tenants for the large office building he planned to erect on the spot.
"We talked to Pattie A. Clay Hospital about building a clinic in there, but that fell through," Worley said. "We talked to Richmond Utilities, which took the concept to their board, but that fell through. We talked to the city about moving their downtown revitalization and tourism office in there. That fell through."
On Jan. 23, Clark asked Madison County Fiscal Court for permission to seek out a new home for Madison County's family courts division. It has been in a county-owned building next to Worley's property since 2002.
The county-owned building is too small and needs repairs, Clark said. And he said there is no room for family courts in the county's existing courts buildings, including the Madison County courthouse, the Madison Hall of Justice and the sprawling $5 million courthouse annex that opened three years ago.
With no appropriate space, the county had to find a private landlord and pay outside rent, Clark said. He advertised for anyone who could offer 15,000 to 16,000 square feet of office space within two blocks of the courthouse.
Rent up 166 percent
Worley's Downtown Holdings LLC was the sole qualified applicant. Worley owns the company with Richmond lawyer Michael Eaves.
Madison County and Downtown Holdings signed a deal. Starting next spring, when Worley's building is finished, the Kentucky Administrative Office of the Courts is supposed to pay — through the Madison County Fiscal Court — an annual rent of $409,356 to occupy most of the building.
That's 166 percent more than the $154,050 a year the AOC pays for the family courts in the county-owned building. The new space will be nearly three times larger — 16,600 square feet versus 6,162 square feet.
Kentucky Chief Justice John Minton did not respond to a request to comment on the deal.
AOC spokeswoman Leigh Anne Hiatt said the AOC has indicated in writing its intent to lease Worley's building, but it has not signed the lease yet. The effort to find a bigger space for the Madison County family courts began under the previous chief justice, Joseph Lambert, who retired last year, Hiatt said.
Clark said the deal is good for everyone, including the people of Richmond, because the old buildings that Worley razed had become an eyesore.
"I'm excited about this," Clark said. "It's gonna add to our downtown."
The Richmond Board of Architectural Review asked Worley last September if he could renovate the old buildings rather than demolish them or, failing that, if he could preserve the façades, said Brandon Powell, the board's chairman.
Worley said he couldn't. The board voted 5-0 to approve the demolition.
"I don't know that there was much historic value to these buildings other than they had been part of the downtown streetscape for a long, long time," Powell said.
Worley and Clark are friends and Democrats who have supported each other's re-election efforts and shared campaign aides. Clark publicly credits Worley for the millions of dollars in state funds Worley steers to Madison County, using his clout as a Democratic leader who regularly sits with the governor and other top lawmakers.
But the family courts lease was awarded fairly, without inside influence, the men said. Anyone was welcome to apply for the contract, Clark said, and it just so happens that Worley's company was the only one qualified.
"Ed and I have been good friends for a long time, but that has nothing to do with it," Clark said. "This is just a good business deal."
Cecile Schubert, chairwoman of the Richmond Board of Ethics and a member of other public watchdog groups, said she recognizes Worley's right to make a living. But Worley should not take state money while he sits in the legislature, she said.
"This has been a problem across the board in Kentucky, where we have people in government who suddenly own the land where the government plans to build something," Schubert said.
She added that she was speaking as a local citizen and not for any of her organizations. No ethics group is known to be examining the deal.
"It's hard to see how that's not a conflict of interest," Schubert said. "He needs to step back."