Politics & Government

Horse Park officials still want hotel, but issue tied up in court

Now that the Alltech FEI World Equestrian Games are over, Kentucky Horse Park officials are returning to the idea of building a hotel on the grounds.

"I have never stopped thinking that a hotel is what we need to do," said Horse Park director John Nicholson, who said new facilities built for the Games will bring even more tourists and competitors to the park.

There's one problem, though: The most recent attempt to build a hotel there ended up in a lawsuit last year that is pending in Franklin Circuit Court.

The developer, Brad Burgess, says he's willing to build a luxury hotel at the Horse Park. He's urging state officials to work with him and Circuit Judge Phillip Shepherd to reach a settlement that would resolve the lawsuit and keep his group as the hotel's builder.

"It's important for the success of the Horse Park, as well as for Kentucky's economic development, and we have a contract to do it," Burgess said.

Officials with the state Finance and Administration Cabinet won't comment on the litigation, but numerous documents say they canceled Burgess's contract in 2008.

The hotel saga began in 2004, when then-Gov. Ernie Fletcher included a hotel as part of Kentucky's winning bid for the Games.

Burgess won the bid, and he and the Fletcher administration worked out a complicated deal whereby a non-profit set up by Burgess would build the hotel, even though the land would be owned by the state. Burgess's group would have received a $5 million development fee.

However, some legislators questioned the deal, and officials in Gov. Steve Beshear's administration set up a deadline in 2008 for the $118 million bond sale to build the hotel. About $75 million of those bonds were backed by the developers, but the commonwealth could have been liable for an additional $42.17 million if the hotel didn't succeed.

When the bond sale was not completed by April 15, 2008, the state terminated Burgess's contract. Burgess then sued the state, saying the original contract had no deadline to sell bonds.

Burgess says he's willing to agree to a settlement in which he would work out financing for what he estimates will still be a roughly $120 million project. It's not clear what burden the state would have. He says the hotel would bring 130 full-time jobs and $83 million to the state's General Fund during the next 20 years.

But an Aug. 11 letter to Burgess from Deputy Finance Secretary Lori Flanery said the issue was moot because the state terminated Burgess's contract. Flanery said the entire process would have to start over with bidding and approval from the General Assembly.

"I believe the next step would be to have the General Assembly authorize a hotel project on the grounds of the Horse Park in the 2011 regular session of the General Assembly," Flanery wrote. "If that is accomplished, then we can work through the remaining obstacles."

In his correspondence, Burgess has urged state officials to come to some agreement with him, rather than risk losing what could be an expensive court ruling.

"We do believe we will win the case, or else there would have been a ruling in their favor months ago," Burgess said.

Nicholson would not comment specifically on the litigation, but he said the hotel is part of the Horse Park's future, no matter who builds it.

"We have multiple audiences, tourism and event. To totally ignore either one is not wise," Nicholson said.

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