State grants fraction of tax breaks sought for Coldstream Research Park development
State officials approved a much smaller tax break than University of Kentucky officials had sought for new developments at Coldstream Research Park that are expected to include housing, office space and hotels on the sprawling site off Newtown Pike.
UK had requested $32 million in tax rebated to help pay for infrastructure improvements to build a new hotel, multifamily housing, retail space, offices and a laboratory at the 735-acre research park. The money would be a partial rebate of property, sales and withholding taxes over 20 years, in what’s known as a tax increment financing district. TIFs are used to help spur development by returning some of the increased tax revenue generated by a project to developers.
Although TIF districts were originally created as a tool to entice developers to build in blighted urban areas, Kentucky lawmakers have added numerous other allowable uses, including public university research parks.
On Thursday, the Kentucky Economic Development Finance Authority voted to give back up to $4.6 million over 20 years. The city is expected to approve tax breaks equal to the state amount, so the total tax break will be about $9 million.
“It’s less than we hoped for but we’re appreciative to get the incentive we did,” said George Ward, Coldstream’s executive director. “It’s a great opportunity to start more development at Coldstream.”
State KEDFA officials were not immediately available for comment. TIF projects are usually assessed by independent consultants who determine the likely financial return on developments, and the authority usually follows that assessment.
The new development is part of a large land swap between the city and UK, which gave the city more than 200 acres of land near Interstates 64 and 75 for an industrial or business park. In exchange, UK got control of portions of approximately 13 acres of roads on and around campus. In addition, UK got state permission to sell another 50 acres of Coldstream land closer to Newtown Pike for new businesses. Under statute, Coldstream could only offer long-term leases to business tenants.
The deal was made on the eve of a key vote on whether to expand the city’s urban services boundary, which dictates where development can occur in Fayette County. The deal created new potential sites for business expansion, a key sticking point in debate over the urban services boundary, and council members voted to leave the boundary unchanged.
The TIF district is seen as a way to turn Coldstream into a more desirable place to work by adding living and dining options, Ward told the Herald-Leader last year.
This story was originally published May 31, 2019 at 11:11 AM.