The Webb Cos. spent $7 million of its own money to excavate a three-story underground CentrePointe parking garage, and it will spend more of its funds to build the $38 million structure, the companies’ co-founder said.
Dudley Webb told the Lexington Forum on Thursday that the Webb Cos. would use equity combined with bank financing to build the parking garage; it should be complete in 8 to 10 months, he said. Webb declined to name the bank that might provide the loan.
Financing for the CentrePointe project — which was announced in 2007 — was the focus of much of Thursday’s discussion at the Hilary J. Boone Center at the University of Kentucky. The development, which has been stalled for eight years, is scheduled to include the parking garage, a hotel, an office tower, an apartment building, and restaurant and retail space.
Webb said that a bond issued by the Kentucky League of Cities remains an option to pay for the garage.
“That will be used to reimburse us,” Webb said. The Kentucky League of Cities offered in 2014 to issue bonds for the parking garage, but that didn’t happen after a group of investors led by Matt Collins of Lexington announced its interest in taking over CentrePointe.
The Collins group backed out this year, and The Webb Cos. resumed control of the project in March.
Are we going to sue the city? No. Are we going to sue the council members? No. Are we going to sue the mayor? No. I think we have a real case against the lawyer that did this.
Webb declined Thursday to name an international investor who was to be a partner in the project in 2008. The investor died, causing some people to doubt whether the arrangement existed.
Webb said the man was a German national who ran a French company but was a resident of Switzerland. The man died without a will. Webb said he was told that the family had planned to invest in the project but that it ultimately backed out.
When asked why he wouldn’t disclose the man’s identity nearly eight years after his death, Webb said he had signed nondisclosure agreements.
Woodford Webb, also with The Webb Cos., told the crowd Thursday that the investor was real.
“I traveled to Zurich; I met his family,” Woodford Webb said.
Dudley Webb blamed the city and its attorney, Mason Miller, for causing delays in construction of the office tower, and he said those delays prompted the loss of tenants, including the engineering firm Stantec and an undisclosed law firm. Webb said the city didn’t issue bonds for the parking garage as agreed in 2008, causing delays. . The city, however, maintains a later agreement between it and The Webb Cos. didn’t say the city would issue the bonds.
“I will go to my grave not understanding why the city did not issue the bonds,” Webb said.
The city made the company sign an agreement in 2014 that would require The Webb Cos. to fill in the excavated garage hole if no work had occurred on the site within 60 days, Webb said. That agreement had to be signed before the company could get building permits.
No other development has been asked to sign such an agreement, Webb said, referring to the agreement as “extortion.”
In a six-page letter March 2 from The Webb Cos. and released to the media, Webb said the company would start work on the garage and “seek justice later.”
“Are we going to sue the city? No. Are we going to sue the council members? No. Are we going to sue the mayor? No,” Webb said. “I think we have a real case against the lawyer that did this.”
But when asked why The Webb Cos. didn’t use private financing in 2014 to build the garage rather than seek bond financing, Webb said it didn’t have the money or equity at the time.
“We want to put this behind us,” Webb said of the tumult.
Susan Straub, a spokeswoman for Lexington, said the city had no comment on Webb’s statements.
Webb said a tax increment financing plan would be used as planned to help build the garage. Tax increment financing uses new taxes generated from a project to pay for infrastructure, in this case the parking garage.
The tax increment financing may be used to pay off bonds for the garage. Webb said the company had to put private equity into the project first before a bank would give the group financing for the rest of the garage.
Webb said only 150 parking spaces in the 700-space parking garage would likely be available for daily use. Many of the 700 spots will be on monthly contracts for employee and customer parking for downtown businesses, he said.
“To be clear, this will be a public garage,” Webb said.
The city’s downtown garages have little public parking because many spaces are rented by the month by downtown employees, he said.
Webb said crews are working on securing the interior walls of the garage. The tower cranes, which have sat idle on the site for more than a year, cost about $35,000 a month, Webb told the group.