A fund that Lexington developers could tap to help pay for parking, sewer and other infrastructure costs received final approval Tuesday from a Lexington council committee.
The goal of the fund is to provide limited money for infrastructure projects that would create jobs or provide public infrastructure, city officials have said.
The Urban County Council’s Budget, Finance and Economic Development Committee gave tentative approval to the fund during a meeting in September. A final draft of the ordinance was approved by the committee Tuesday.
It will now go to the full council for a vote.
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Even if the full council gives the new program its blessing, there’s no money in the budget for the fund.
“We will have to appropriate money in the next budget,” said Councilman Kevin Stinnett, chairman of the Budget, Finance and Economic Development Committee.
City officials told the council Tuesday the administration plans to ask for $1 million for the new program in next year’s budget.
Stinnett said the council must also approve the board — which would include two city council members and several key city officials — to oversee the fund. But the creation of the board would be approved in a separate ordinance.
Projects that would qualify include parking, public roads, sidewalks, streetscape improvements, sanitary or stormwater improvements. The parking must allow for public use and cannot be entirely private, city officials have previously said.
To qualify, a development must either create jobs or have a direct capital investment. All projects must show that they are using private money and that the development’s plans are compatible with existing zoning and plans for the area, according to the draft ordinance.
Infill development would be given priority. Those are projects in or near Lexington’s core, as opposed to the outskirts of the city.
Projects that increase affordable housing, add new retail and residential units in infill areas, develop underutilized or vacant properties and projects that create jobs that pay more than the Fayette County median income would be given priority.
The maximum for a grant would be $300,000. The maximum for a loan would be $500,000, which would be repaid. The agreement between the city and the developer would also require a certain number of jobs be created over a period of time, the ordinance says. That period of time could change depending on the agreement. If the developer or company does not create the jobs, the money would have to be repaid to the government.
Construction must begin within six months of the money being approved. If construction has not begun, the funding can be revoked.
The grants will be monitored for compliance, the ordinance says.
Councilwoman Angela Evans said $300,000 or $500,000 was not a lot of money, given the cost of construction.
“What can you get with $300,000?” Evans said.
Doug Burton, director of the city’s engineering department, said the fund is not designed to fully fund a project. Developers must have private or other funding.
“This is gap financing,” Burton said.
Burton added that several developers have already inquired about applying to the fund.
Others questioned if projects that include affordable housing or infill should be given higher rank than other projects. The city has another economic development fund — the Jobs Fund — that gives incentives to companies for creating jobs.
The full council is not expected to take its first vote on the fund until April.