City deadline for downtown CentrePointe project is Wednesday

Lexington officials remained mum Tuesday about what will happen Wednesday when a series of extensions on an April order to fill in the CentrePointe block expires.

Under an agreement, the city could fill in the hole if The Webb Companies fails to do so

The order was issued last Aprilafter city officials alleged no work had occurred on the long-delayed downtown project for 60 days. The developer vehemently denied that.

Susan Straub, a spokeswoman for the city, declined to say Tuesday whether the city would enforce the April fill-in order or has communicated with The Webb Companies.

Developer Dudley Webb said in an email Tuesday that work continued at the site. An email Webb received late Tuesday from Hunt Construction said that reinforcing bars, or rebar, had been installed on several of the columns for the parking garage and that the construction company should start pouring concrete for those columns as soon as Wednesday morning.

Webb said he had not heard anything from the city about the April order.

“We haven’t and don’t expect to,” he said. “It appears that we are now in unison and moving forward to bring this project to fruition. That is good.”

That order was set aside several times after a group of investors led by Matt Collins of Lexington announced their intent to take over the project. But when the Collins group said in early February that it was backing out, The Webb Companies announced that work had resumed at the site.

The city had given the Collins group a series of extensions — a 60-day and three 30-day extensions on the April fill-in notice as they explored the finances to take over the project. Those extensions were set to expire Wednesday, according to a February email sent by a lawyer for the city.

Since March 2, workers have been spotted periodically on the site that takes up an entire downtown block, bounded by Main, Vine, Upper and Limestone streets. The site was excavated for a three-story underground parking garage before the Collins group announced interest in the development that is supposed to include a hotel, an apartment building and extended-stay hotel, an office tower, and restaurant and retail space.

Officials with The Webb Companies have not said how they are going to finance construction of the parking garage. Before the Collins announcement, The Webb Companies was exploring issuing bonds for the parking garage through a nonprofit arm of the Kentucky League of Cities.

Jonathan Steiner, executive director and CEO of the league, said Tuesday that the nonprofit had spoken with The Webb Companies recently.

“We … stand ready to work with them,” Steiner said. “We have told them we are happy to move forward on the bonds on their time line as needed.”

The Webb Companies has said that the city originally agreed to issue the bonds. The city’s refusal to do so caused some of the delays, the developers say. The city has said the most recent agreement between the city and the developers, signed in 2013, did not say the city would issue the bonds.

The city and the developer signed an agreement in December 2013 as part of a much larger agreement regarding tax increment financing. Tax increment financing uses new taxes generated from a development to pay for infrastructure costs. In this case, the new taxes were supposed to help pay for the underground parking garage. Under that agreement, CentrePointe agreed to restore the surface to pre-disturbance conditions (fill in the hole) if it failed to do work toward completing the garage for a period of 60 consecutive days.

“As a result, CentrePointe must either complete the garage or restore the property to preconstruction condition by March 30, 2016,” Mason Miller, an attorney representing the city, wrote in an email to the Urban County Council on Feb. 11. “If CentrePointe fails to do so, the city has the right, but not the obligation, to enter into the property on March 31, 2016, or any time thereafter, and restore the property itself, seek reimbursement of up to $4.4 million from CentrePointe, and foreclose on the property if CentrePointe doesn’t reimburse the city.”

With the exception of more than $75,000 in attorney fees, no public money has been spent on CentrePointe. It is a private development on private land.

This story was originally published March 29, 2016 at 5:07 PM with the headline "City deadline for downtown CentrePointe project is Wednesday."