Fayette County

Lexington says CentrePointe developers making progress on financing, hiring

Grass and weeds were growing on the sidewalks inside the construction fencing at the proposed CentrePointe site in downtown Lexington, Ky., Wednesday, August 5, 2015.
Grass and weeds were growing on the sidewalks inside the construction fencing at the proposed CentrePointe site in downtown Lexington, Ky., Wednesday, August 5, 2015. Charles Bertram

Lexington officials said new investors in the long-delayed CentrePointe development are interviewing construction managers and are actively seeking financing for the downtown project.

The city agreed Friday to give the group that includes a New York real estate investment firm a 30-day extension on a city order to fill in the site, originally issued to the previous developers.

Mason Miller, a lawyer for the city, said the city is satisfied that the group is making progress on putting together a complex development.

“They are almost done with the interview process of hiring construction managers — they are looking at both national and local firms — as well as lead architects,” Miller said. “They have also made a lot of progress talking to both local and national banks.”

Miller said the city has not yet seen the group’s financing. It was still too early for that information, he said.

The new developers — Bridgeton Holdings of New York and Matt Collins of Lexington — announced their intention to take over the project in August. After the announcement, the city set aside an April 28 fill order issued to the Webb Companies, the former developers, for 90 days. The city issued the order after alleging no work had been done on the site for 60 days, a charge the Webb Companies denied.

Miller said the Bridgeton Holdings group can receive up to three 30-day extensions. The clock is now ticking on the first 30-day extension.

Jonathan Miller, a Lexington lawyer who represents Bridgeton Holdings and Collins, said the developers are referring all comments to the city. "We are deferring press inquiries to the mayor’s office during this negotiation phase,” Miller said.

The proposed CentrePointe development had originally included an office tower, a hotel, apartments, an extended-stay hotel, retail and restaurant space in the downtown block that has been vacant since 2008. The Bridgeton Holdings group has proposed moving city hall to the center of the development and nixing the office tower.

City officials have not committed to moving city hall to CentrePointe.

In October, the city paid Jones Lang LaSalle, a real estate consulting group, $198,500 to conduct a market analysis to determine if it’s more cost effective for the city to lease a new city hall or build its own. That report will not be completed until January, said Sally Hamilton, the city’s chief administrative officer, during an Urban County Council meeting last week.

There was no reason for us not to grant the 30-day extension when part of the delay is on our end. And we know they are making progress.

Mason Miller, a lawyer for the city

Mason Miller said if CentrePointe is to move forward, the group needs to know if the city is interested in putting a new city hall on the CentrePointe site.

“We aren’t prepared to discuss that until the Jones Lang LaSalle report is completed,” Mason Miller said. “There was no reason for us not to grant the 30-day extension when part of the delay is on our end. And we know they are making progress.”

The city has toyed with moving city hall out of the former Lafayette Hotel for more than a decade. The current government center on Main Street is costly to maintain,with the city spending millions of dollars on upkeep on the building that opened in 1920. Most recently in 2006, there was a proposal to build an eight-story city hall for $47.5 million.

But efforts to move and build a new city hall stalled after the city's finances plummeted during the recession.

The investors plan to inject $166 million into the project. The developers also said in August that they might ask the city to guarantee a loan to help build a three-story underground parking garage. The Webb Companies had proposed using money from tax increment financing — or new taxes generated from the project — to pay off a $25 million bond. The bonds were never sold because of the announcement in August that Collins and Bridgeton Holdings were taking over the project.

Beth Musgrave: 859-231-3205, @HLCityhall

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