Developers of the downtown CentrePointe project declined Tuesday to publicly identify the project's financial backers, a stance that led to some tense moments in front of a city task force.
Vice Mayor Jim Gray wanted a letter from the investors saying the money has been pledged to build CentrePointe. Previously, developers have said the project would cost $250 million, but a financial impact analysis released Tuesday put the cost at $205 million.
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“We want to guarantee this project goes forward,” Gray said.
In answer to Gray's question about revealing the investors, attorney Darby Turner, representing developer The Webb Companies, said, “No, we won't do that.”
Asked afterward why the secrecy, Turner said, “We have private investors who don't want to be part of the public discussion. They are private people.”
The exchange came Tuesday afternoon at a meeting of the city's Tax Increment Financing Task Force, made up of several council members and Mayor Jim Newberry. The city's TIF consultant, Jim Parsons of Covington, was on hand to answer questions.
Meanwhile, Newberry began sending out a series of e-mails this week defending the development and addressing what he described as myths about the project. In the first e-mail, Newberry said that the CentrePointe debate “has demonstrated yet again that Lexington has difficulty dealing with development issues.”
“I do not consider it to be a perfect development,” Newberry said in the e-mail, “but on balance there has never been a doubt in my mind but that the best interests of Lexington are served by the completion of CentrePointe.”
The city is hoping to use tax-increment financing to fund public improvements associated with the development. Those would include a public parking garage as well as public art and a permanent location for the Farmers Market.
TIF financing allows the city to issue bonds to pay the up-front costs of the improvements and then repay the bonds using portions of the future tax revenue generated.
Councilman Tom Blues questioned the financial viability of the CentrePointe project. “How sure are we at this point that the project will be built? Don't we have to know how it's going to be financed, and shouldn't the city have to have that answered?”
Gray said it's in the public's interest to know the project's investors, especially because the developers have said the project's financing is in cash.
“TIF makes this a public project, and it is in the public interest to ask these questions,” he said. Equity financing is “very unusual in America today.”
Gray said he doesn't want to raise public hopes about improvements downtown, only to have the project fall through.
Parsons, the city's consultant, said, “The more you know about the financing, the better, but it is not critical” at this point.
But Parsons added that the investors' identity becomes “very important” when it comes time to sell the tax-increment bonds to pay for public projects downtown.
A list handed out on Tuesday of possible uses for TIF money included a parking garage below Phoenix Park ($10 million), a redesigned Phoenix Park, ($4 million), sanitary sewers ($1 million), and a covered market house for Farmers Market ($3 million including land costs). Also on the list: sidewalk and streetscape enhancements around CentrePointe ($2 million), pedways ($3 million), improvements to the new courthouse plaza and a music and entertainment venue on North Limestone.
The task force will come up with a final list of projects that will be submitted to the Urban County Council for approval, said Joe Kelly, a senior adviser to Newberry
A public meeting Tuesday night to solicit comments on proposed TIF projects was sparsely attended and drew only a half-dozen individuals who spoke.