Downtown Lexington management district moves forward with preliminary council vote

After years of discussions and debate, a new management district for downtown Lexington is finally moving forward.

The Urban County Council voted 12-1 during a Tuesday council work session to put an ordinance creating the new management district on the council's agenda. The first reading will be Thursday. A public hearing to discuss the new management district has been set for April 30 before the council takes a final vote.

A similar effort to create a downtown management district failed in 2013.

Drew Fleming, chairman of the Downtown Lexington Corporation, the nonprofit group that spearheaded efforts to create the district, told the Urban County Council Tuesday a management district acts similar to a homeowners association. In this instance, it will collect taxes and spend those taxes in downtown to help keep the area clean, safe and welcoming.

There are more than 1,200 such districts in cities across the country. Downtown Louisville has had one since the early 1990s.

"This is a proven track record," Fleming said of the districts. "We have overwhelming support for this district. We have 51 percent of tax-paying property owners that own 62.5 percent of the value."

The proposed district boundaries are from Midland Avenue, High Street, parts of Second Street and Newtown Pike. The district includes 567 parcels — 265 are commercial, 206 residential and 26 are tax exempt — such as government buildings, churches and other nonprofits.

Properties inside that district would pay a tax — 10 cents per $100 of assessed property. For example, for a property worth $300,000, the tax would be $300 annually. Initial estimates show taxes on property within the district would generate approximately $362,000 each year.

Supporters of the new district packed the council chambers during Tuesday's meeting.

Bob Cole, who owns property downtown and whose company manages four other downtown buildings, said he was opposed to it when it was first proposed in 2013. Now, he supports it.

"I see the opportunities for improvement," Cole said.

Steve Byars, a lobbyist for the University of Kentucky, told the council the university is also backing the efforts to start a new management district. A thriving, clean and safe downtown helps the state's flagship university recruit students.

"That's a competitive advantage for us," Byars said.

Others, however, said they felt that the new management district was unnecessary.

"We don't know the benefits," said Farra Alford, a downtown owner. The effort is creating a new tax and a new entity to provide services the city should provide, he said.

Councilmember Ed Lane, who has an office in a building inside the management district, was the sole vote against on Tuesday. Lane said he is concerned the tax will be passed on to downtown tenants. Rents are higher downtown and downtown businesses have to pay for parking.

"I am concerned for the rental market downtown," Lane said.

Many on council expressed reservations about creating another tax on downtown residents but ultimately voted to move the issue forward.

"I am truly conflicted on this," Councilmember Jennifer Scutchfield said. Even though the supporters of the project received more than enough signatures required to start the district, "It's still not everybody."

State law requires that to set up the management district, backers must have the support of 33 percent of all owners in the district who must represent 51 percent of the assessed value.

Councilmember Jake Gibbs, whose district includes much of the proposed management district, said he supported it and reminded council members that those in the management district who don't support it will be angry with him, not other members of the council.

"I think it will enhance downtown," Gibbs said.

This story was originally published April 14, 2015 at 6:20 PM with the headline "Downtown Lexington management district moves forward with preliminary council vote."