FRANKFORT — Gov. Steve Beshear is recommending $3.5 million in state bonds to help Lexington plan and design a 46-acre downtown arts and entertainment district, including a renovated Rupp Arena.
Funding for the Lexington project is included in $778 million worth of building projects Beshear proposed statewide. Of that amount, only $304 million of the bonds would be paid back using the state's General Fund, the smallest amount included in a state budget since 1996.
The proposal for downtown Lexington falls far short of the $20 million for which city leaders had hoped.
Beshear said the state money would be matched by $1.5 million from the Lexington-Fayette Urban County Government, for a total of $5 million.
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"I know you all have seen some figures like $20 million being thrown around for this project's planning and design," Beshear told reporters Tuesday as he shared his two-year budget proposal. "Obviously, we didn't have that kind of money. ... This will at least let them begin."
Lexington officials estimate the downtown improvements would take 10 to 20 years to complete. The price tag for reinventing Rupp Arena and a new convention center is estimated at up to $260 million.
Lexington Mayor Jim Gray said he appreciated Beshear's support.
"This project goes far beyond our city limits, and this funding means we can take the next step forward to elevate our brand, and grow jobs and economic opportunity," Gray said in a statement. "We appreciate the governor's vision for a reinvented Rupp Arena, and for the potential to create new arts, educational, commercial and residential value in the 46 acres the district includes."
Beshear said funding for downtown Lexington is not in competition with project requests from the University of Kentucky.
He proposed that the state allow UK to spend as much as $175 million on a self-financed project that calls for working with a private company to add 3,000 dormitory beds. That is in addition to $200 million in new agency bonds for various UK projects that pay for themselves, he said.
Beshear also would authorize other state universities to issue the following agency bonds to buy land and build or renovate buildings: $64 million for Eastern Kentucky University, $24 million for Morehead State University, $19 million for Murray State University, $67 million for Northern Kentucky University, $39 million for the University of Louisville and $39 million for Western Kentucky University.