The city of Lexington owns 658 properties. Should it sell some for much-needed cash?
The Lexington council agreed Tuesday to set up a special committee to look at whether it should sell one or more of the approximately 658 properties the merged government owns.
Some of those properties are large — including the city’s five golf courses.
Other properties are tiny.
The city’s division of water quality — which oversees its sewer and water systems — has the most property with 350. Some of those are pump stations. Others are sewer treatment plants. Some are flood-prone parcels the city purchased, Jamshid Baradaran told the Lexington-Fayette Urban County Council’s Budget, Finance and Economic Development Committee on Tuesday.
Baradaran, the director of facilities and fleet, said the city’s parks department is a distant second with 190 properties, more than 100 of those are city-owned parks and green spaces.
The city also owns multiple performing arts venues. Those include The Kentucky Theatre, which recently announced it would have to temporarily close on Oct. 1, The Lyric Theater on Third Street, The Pam Miller Downtown Arts Center on Main Street and Arts Place on Mill Street.
Baradaran recommended the council consider several key factors in determining whether to sell a building or a property: use, long- and short-term costs, if city staff use the building and if selling the property would affect the delivery of core services.
Baradarn gave no recommendations during Tuesday’s meeting on specific properties.
Councilman Richard Moloney said the city should explore possibly transferring all of its performing and other arts venues to another entity. The city once owned and operated the city’s parking garages, he said. The city was able to move control of those parking garages, and the expense of the upkeep, to the newly created LexPark, saving the city a considerable amount of money.
“We may be holding these organizations back,” Moloney said of the groups that use the city-owned arts venues. “These buildings are in better shape than the parking garages.”
Budget, Finance and Economic Development Chairwoman Amanda Bledsoe said she wanted the council to explore disposing of properties to help shore up potential budget shortfalls. Even before the novel coronavirus pandemic, the city’s expenses were outpacing tax revenues. Before the pandemic hit in March, the city predicted a revenue shortfall of $29 million by 2023.
The current and prior year budgets had 15 percent cuts across many departments. The city also tapped more than $36 million in one-time funds to help balance this year’s budget.
Other council members said the city should also consider cultural significance and community benefit before deciding whether to sell a property.
Councilwoman Jennifer Reynolds asked city staff to provide more details about how much each property generates in rent. Some properties may generate enough rent to pay for upkeep, she said.
Baradaran said staff also can provide information on how much some of the properties were worth. Some properties were purchased using federal grant dollars and have restrictions on future use. Some properties may not be sold without the city repaying some grant dollars, he cautioned.
Some of the properties the city purchased because they were prone to flooding are not going to be worth much, he cautioned.
Bledsoe said Tuesday she will appoint a subcommittee of the council likely later this week to start the process of determining if there were properties the city could sell.
This story was originally published September 23, 2020 at 7:45 AM.
