A divided Urban County Council narrowly gave preliminary approval Thursday night to a proposal that would create a delegation led by the mayor to negotiate tax incentive deals for major construction projects.
While the CentrePointe project, a 35 story hotel-condominium proposed for an entire downtown block, was not mentioned by name in the resolution, its many controversies were an obvious focus in the discussion.
A second reading comes Tuesday night at the council's last regular meeting before summer break.
The resolution encourages developers with projects that qualify for lucrative incentives known as tax increment financing to work with city leaders as they apply for TIF. The document also creates a ”delegation“ made up of Mayor Jim Newberry and ”three to five council members“ to ”negotiate“ TIF deals.
The resolution declares that those negotiations ”shall respect the history and heritage of our downtown and its enormous economic opportunity for the region.“ The ”delegation“ would report its results to the full council.
Vice Mayor Jim Gray, who has criticized the CentrePointe proposal, voted for the resolution ”because CentrePointe developers are leveling the block today and effectively have started the process without our participation.“
Developers Dudley and Woodford Webb say they want to build $35 million in public infrastructure — parks, parking garages, public art, etc. — as part of the project. Tax increment financing would allow the company to recoup that money over time from the tax revenue generated by the project.
Gray said he hopes the resolution opens up official communications between the city and the Webbs.
”We can ask them to please stop leveling the block until we know where the money's coming from for their replacement project, regardless of the TIF,“ he said.
Gray and other council members have expressed concern that the Webbs might not be able to successfully finance the $250 million project, leaving Lexington with a barren block on Main Street.
It is crucial, Gray said, that the community knows ”Where's the money?“ Several council members expressed overwhelming concern that the public must be involved and have input in future TIF projects. The public needs to be assured they will have a voice, councilman Julian Beard said.
Councilman Don Blevins worried that the resolution was creating public policy ”on the fly.“
Methods for dealing with developers and coming up with TIF projects to benefit the city need to be well thought out and well planned, Blevins said, because there are several more TIF projects ”coming down the pike.“
For example, Barry McNees, developer of the proposed Lexington Distillery District on Manchester Street, invited council members to stop by the Old Tarr Distillery on Friday to see designs for a redevelopment project. McNees will present an over view of the master plan to the council on Tuesday and said it will require tax increment financing.
Blevins asked that Newberry come up with specific procedures to guide the council through the next TIF project ”so we do this as a community instead of at the last minute like this one seems to be going.“
Newberry agreed to take on the task. Similarly, councilwoman Andrea James urged the council to set up comprehensive guidelines for dealing with TIF projects before agreeing to a CentrePointe TIF application that could have enormous impact on the city.
The project includes a 247-room luxury hotel, 77 high end condominiums, 26,000 square feet of retail space and 85,000 square feet of office space, plus restaurants.