Tom Eblen

CentrePointe TIF meeting with council gives pause

I'm sure it's because I've heard too much of the slop that has replaced intelligent discourse in our presidential campaign. But as I listened Thursday night to Urban County Council members and others discuss whether to go forward with a tax increment financing project tied to the CentrePointe development, one phrase kept running through my mind: Lipstick on a pig.

Granted, some good lipstick was offered up:

Developer Dudley Webb agreed to pay the estimated $50,000 cost of a state-required TIF feasibility study for his proposed 35-story CentrePointe tower, which would house a four-star hotel, luxury condos, offices, restaurants and shops.

Mayor Jim Newberry indicated, and Webb's attorney seemed to agree, that any decision about building a $10 million parking garage under Phoenix Park could wait a couple of years until we see if CentrePointe is built and the garage is needed.

Those two moves made it more attractive, and less risky, for council members to let the CentrePointe TIF process play out, and they voted 10-5 to do just that.

It won't hurt to further scrutinize the downtown redevelopment projects that city officials want to pay for with TIF money. And it certainly would be good to have a public hearing, so citizens could have their say. That hearing is scheduled for Tuesday, Oct. 14 at 6 p.m. in the council chambers.

I'm skeptical of asking the state to approve a CentrePointe TIF project, for several reasons, not the least of which is that state law must be bent like a pretzel for this project to qualify.

Plus, as Vice Mayor Jim Gray keeps pointing out, a TIF project makes sense only if the development it is tied to makes sense. That's because CentrePointe must be a long-term financial success to provide the tax money needed to fund TIF public improvement projects.

CentrePointe makes no economic sense to a lot of people. The mystery surrounding its financing — whether it is real, and where the money is coming from — deepens public skepticism. Last week's turmoil in the financial markets offered further reason for caution.

When Webb unveiled CentrePointe on March 4, he said he needed TIF financing to make it work. Faced with public opposition, he then said he didn't need it. Now, while claiming he doesn't need it, Webb and his brother, Don, and nephew Woodford are working hard to get it.

Some council members speculate that the Webbs need the city's TIF stamp of approval to secure financing for CentrePointe. Or that they need the $10 million city-owned parking garage. Or that they need the city on board so they can seek loan guarantees or other support if CentrePointe runs into trouble.

Some council members who support the TIF project argue that if Lexington doesn't partner with CentrePointe, it could lose an opportunity to fund some much-needed downtown improvements, such as renovation of the old Fayette County Courthouse that now houses the Lexington History Museum.

They think powerful rural legislators will gut the TIF law next year, so Lexington had better grab what it can now. They may be right, but a flawed CentrePointe TIF application would only give those legislators a fat target.

And who could blame them? Is it in Kentucky's best interest to build Lexington a downtown parking garage that's twice as expensive as it could be? Or to spend $3 million on pedways between CentrePointe and two public parking garages?

It would be short-sighted for the General Assembly to abolish TIF financing. Despite Kentucky's historic urban-rural jealousy, it's more true than ever that cities are the economic engines that drive the state. TIF is a great tool for keeping those engines chugging along.

The General Assembly must move beyond the old notion that investing in the Golden Triangle is bad for the rest of Kentucky. Burkesville or Grayson isn't competing with Lexington — Kentucky is competing with Illinois, and they're both competing with the rest of the world.

The old Kentucky way of thinking focuses on whether UK can compete with U of L on the football field and basketball court, rather than on whether they both can compete with North Carolina and MIT in the classroom and laboratory.

The game should no longer be about how to divide Kentucky's pie, but how to make the pie bigger. Sound urban TIF projects that conform to the law will do that. Flawed ones like CentrePointe probably won't.

If Lexington does send a CentrePointe TIF application to Frankfort, I think state officials will view it as pork. And rural legislators know how to butcher a hog.

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