State economic officials gave preliminary approval Thursday for The Summit development on Nicholasville Road and Man o' War Boulevard to receive tax increment financing.
The proposed 60.29-acre mixed-use development could receive economic incentives for $26.5 million in public infrastructure needs. The overall $155.6 million project is to include upscale shops, housing and possibly a five-story hotel. A final development plan must be approved by the city.
According to the Kentucky Economic Development Finance Authority, the proposal by Bayer Properties includes:
■ 20 separate buildings.
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■ More than 400,000 square feet of restaurant and retail space.
■ 350 residential units.
■ Nearly 2,500 parking spaces.
The project — which Lexington Mayor Jim Gray certified "is not reasonably expected to be developed without public assistance, including but not limited to tax increment financing" — could be the first under a new state law passed this year expanding such financing to areas that are not deemed to be blighted.
The KEDFA board approval means work can begin with a consultant to review the feasibility and impact on the commonwealth. If deemed positive, then specific taxes and other financial support will be negotiated through the state and presented to the board for final approval.
In September, the Lexington-Fayette Urban County Council voted unanimously to approve a zoning change to allow the development of the former Fritz Farm, over the objections of neighbors who argue it will increase the already heavy traffic on Nicholasville Road.
The project will create more than 1 million square feet of new residential and commercial space — the first significant retail development in Lexington in recent years — just south of Fayette Mall and across from Wal-Mart.
Bayer Properties of Birmingham, Ala., has not named specific tenants, but other Summit developments — in Louisville, Birmingham and Reno, Nev. — have included stores not already in Lexington, including Saks Fifth Avenue, Coach, Urban Outfitters and Pottery Barn.
Bill Lear, attorney for Bayer, could not immediately be reached for comment.
Construction could begin in 2015, with stores opening that fall.
"We're always pleased to see that kind of investment in our community," said Kevin Atkins, the mayor's chief development officer.