Urban County Council gave tentative approval on Tuesday to ordinances creating districts around two downtown developments so tax money from those districts can be used to help pay for city improvements.
The ordinances include establishing the development areas, outlining the proposed projects to be funded and the development plans that have been established for each project.
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The Phoenix Park/Courthouse Plaza ordinance was approved by a vote of 9-6. It pay for improvements in an area surrounding the planned CentrePointe hotel and condominium project being develop by The Webb Companies.
The council unanimously approved the ordinance for the Distillery District, a proposed arts and entertainment area along Manchester Street. It would include the refurbishing of two historic distilleries.
The ordinances still require two official council readings for final approval. First reading is scheduled for Thursday at the regular council meeting. Final approval could come Dec. 4.
Once the tax increment finance ordinances are given final approval, the two applications will be filed with the Kentucky Economic Finance Development Authority, said Jim Parsons, the city's TIF consultant.
KEDFA will decide whether the state will be involved in either of the projects. The state does not have to be involved for the city to move forward with the projects.
Each ordinance approves the local participation agreement between the city and the project's developer - Barry McNees, developer of the Distillery District, and Lexington Fayette Urban County Government, developer of the Phoenix Park/Courthouse Plaza district.
The Phoenix Park agreement "is a little unusual," Parsons said, "because you are having a contract with yourself."
Some of the projects in the Phoenix Park district, including a parking garage below Phoenix Park, would benefit the nearby CentrePointe project, but the tax money does not go to The Webb Companies.
Other projects in the Phoenix Park TIF district include pedways connecting the underground garage to CentrePointe, streetscaping around the hotel and burying utilities on South Upper Street.
Neither ordinance provides a guarantee or "pledge of full faith and credit" by local government, meaning the city is not guaranteeing the bonds that must be sold for each project. "That's real clear ," Parsons said. If either project fails, the city is, therefore, not on the hook to repay the bonds.