Downtown Lexington district gets $25,000 loan for start-up costs

A new management district that its backers hope will make downtown Lexington safer, cleaner and more visitor-friendly is getting a jump start thanks to a $25,000 loan from the city of Lexington.

The Lexington Urban County Council approved the loan Thursday. The loan will be paid back over the next two years.

James Frazier III, chairman of the downtown management district board, said the loan would allow the group to hire a company to develop a website and pay for other start-up costs before a new tax on downtown properties is collected and returned to the district in October.

“We need some seed money to get started,” Frazier said. “We need to get some infrastructure in place before the money is collected in October.”

The Urban County Council voted in May 2015 to approve the district bordered, by Midland Avenue, High Street, parts of Second Street and Newtown Pike.

Property owners inside the district will pay a tax of 10 cents per $100 of assessed value. For example, for a property worth $300,000, the tax would be $300 a year. Initial estimates show taxes on the 567 parcels within the district would generate about $415,000 a year.

State law requires that to set up a 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. The group had the signatures of 51 percent of all property owners in the district, representing 62.5 percent of the assessed value.

Frazier said the board has selected a vendor for the district’s website and someone to design logos and stationery. The group will send letters to all property owners in the district notifying them of the tax increase come Oct. 1 and soliciting ideas for the types of services the district should provide. In other cities, downtown management districts provide additional cleaning, signage, graffiti removal and act as ambassadors for downtown visitors.

The group also has issued bids for a private company to provide management of the district. Frazier will return to the council June 14 with a budget for the council to approve. That budget also will be provided to all property owners, Frazier said.

“We hope to select a vendor in July and hope they can do some work in August,” Frazier said. “We would like to do something this fall while the weather is nice and Keeneland is in session so we can have some early successes.”

It took supporters several years to get enough signatures and political support to create the district. A bid to get the council to approve the district failed in 2013. In 2015, the council ultimately agreed to pass ordinances creating the district.

On Thursday, Jennifer Scutchfield was the only council member to vote against the $25,000 loan. Scutchfield has voiced concerns that creating yet another downtown group was unnecessary. The services the district is supposed to provide should be provided already by the city, she has said.

There are more than 1,200 similar management districts across the country. Louisville created a management district in the early 1990s; its boundaries have been expanded several times.

The downtown management district will sunset after five years. If downtown property owners decide the extra tax is not producing results, the district may be dissolved.

This story was originally published May 15, 2016 at 6:07 PM with the headline "Downtown Lexington district gets $25,000 loan for start-up costs."