FRANKFORT — A measure that would let the University of Kentucky use tax breaks to help spur a multiuse development at its long-troubled Coldstream Research Campus cleared the House budget committee Tuesday.
Under House Bill 310, university research parks and military bases could apply to receive tax increment financing, commonly called TIF, for development projects. Tax increment financing uses taxes generated from a development to pay for infrastructure improvements, such as new streets, utilities, demolition, landscaping and parking structures.
Rep. Bob Damron, D-Nicholasville, the bill's sponsor, said UK would like to add a multiuse development on a 35-acre plot that would include laboratory space, retail and restaurants near the Embassy Suites off Newtown Pike. About 10 acres of the area is parkland and would not be developed.
George Ward, executive director of Coldstream, said in a statement that a TIF district would help create high-paying research and development jobs.
"It is highly unlikely that a developer could be found that would be willing to build the laboratory space without an incentive," Ward said.
Tax increment financing is an economic development tool that allows cities in Kentucky to redevelop economically distressed areas. The General Assembly gave Louisville the authority to use TIF in 1988 and added TIF eligibility for other cities in 2007.
If the latest TIF bill is signed into law and UK trustees approve a development project, UK could begin trying to find a developer within 60 days, Ward said.
The university hopes to add three buildings that include laboratories and incubator space for high-tech start-ups. The new development eventually would create 1,500 to 2,000 jobs, Damron said.
The bill also would allow a TIF development within 3 miles of Fort Campbell near Hopkinsville. That development — a mix of retail, restaurant and other spaces — eventually would help the state generate much-needed sales tax revenue, according to its backers.
Rep. Arnold Simpson, D-Covington, said he supported the measure but would like to see more done to track whether TIF financing actually works.
Several TIF projects have been built around the state in recent years. In July, TIF financing was approved by the state for a Lexington entertainment/apartment district on Angliana Avenue. TIF financing also was considered for the CentrePointe complex on Main Street, which has not been built.
At Coldstream, UK officials have been frustrated for decades by the slow pace of development. Most recently, the 735-acre campus has been envisioned as a national center of pharmaceutical development.
In 2009, construction of a signature building at Coldstream, the Lexhold International Center for Technological Innovation, fell substantially behind schedule amid claims of unpaid bills and troubles with the developer.
The building has since been completed, and ground was broken at Coldstream in 2010 for the new 300,000-square-foot Eastern State Hospital, a mental health facility that will cost $129 million.
Selma Owens, who operates a catering business and cafe in the Lexel building on Bull Lea Road on the Coldstream campus, said that while her catering business doesn't rely heavily on foot traffic, being in a busier neighborhood would be a benefit to nearby businesses such as the Embassy Suites hotel.
"I don't think anybody who runs a business out here would not be happy ... for day-in, day-out business," Owens said. "We love the location. ... It's close to the university, it's close to downtown and it is a good spot."
Ron van Haaren, general manager of the Embassy Suites, said TIF financing would make the area more attractive for relocating companies and regional headquarters.
"The way we have developed Coldstream the last 12, 13 years hasn't generated all that much more jobs," he said.
The TIF bill, van Haaren said, "will be beneficial, not just for us, but for Lexington in general."
Coldstream, he said, is "a piece of land we can do a lot more with than we have."