Gov. Matt Bevin’s proposed state budget includes $60 million in state bonds for a proposed $250 million overhaul of Lexington’s convention center.
The city of Lexington had asked for $75 million to help pay for the overhaul, but Lexington leaders said late Tuesday that they were thankful Bevin included money in his proposed budget.
“We believe Governor Bevin and our legislators recognize the economic necessity of this investment in public infrastructure,” said Bill Owen, CEO and president of the Lexington Center Corp. “The importance of the new convention center as an economic engine for the continued growth and prosperity of the city of Lexington, the Bluegrass region and the state of Kentucky cannot be overstated.”
Owen said designs for the project are still preliminary and that the agency will look for ways to trim $15 million from the overall $250 million budget.
“We look forward to that challenge to close that gap one way or another,” Owen said. “But this is a positive step forward for all of Central Kentucky.”
The proposed overhaul and expansion of the Lexington convention center, which was originally built in 1976, includes an additional 100,000-square-foot exhibit hall, larger ballrooms and additional meeting space at the complex on West Main Street.
The existing convention center is only able to market to about 65 percent of potential national convention business, according to one study by Conventions, Sports and Leisure.
The construction and renovation is projected to cost $190 million. The remaining $60 million is needed to pay off outstanding debt payments related to previous expansions and renovations as well as financing and other costs, Lexington Center Corp. staff have said.
Lexington Center Corp. manages Rupp Arena, the attached convention center and the Lexington Opera House.
To pay for the expansion, Lexington Center had asked for state money and a 2 percentage point increase in the hotel and motel room tax in Fayette County. The additional tax money would be used to make debt payments on $171 million in bonds.
If passed by the General Assembly, the Fayette County hotel and motel tax would rise from 6 percent to 8 percent. On top of that is a 1 percent state tourism tax, bringing the total to 9 percent. Owen said the hotel and motel tax increase is “critical” to the project moving forward.
The Urban County Council, local tourism groups, downtown boards and the board of Commerce Lexington have all passed unanimous resolutions backing the proposal.
Mayor Jim Gray said after his annual state of the city address last week that officials with Commerce Lexington met with Bevin to discuss the project.
The legislature has allocated money for other cities’ convention centers in the past.
The General Assembly approved $56 million in state money for a $180 million expansion of Louisville’s convention center. It also approved an increase in Jefferson County’s hotel and motel tax two years ago to pay for debt service on bonds for the convention center.
Louisville’s hotel and motel tax is currently 9.5 percent. Most cities in the region are between 8 percent and 9 percent.
Proposed General Fund Bonding
Kentucky Infrastructure Authority: $13,600,000
School Facilities Construction Commission: $194,112,000
Economic Development Bond Program: $7,000,000
High-tech Construction/Investment Pool: $7,000,000
KEDFA Loan Pool: $7,000,000
Workforce Development Construction Pool: $100,000,000
State-owned Dam Repair: $4,000,000
Lexington Convention Center Replacement: $60,000,000
Business One-Stop Portal, Phase 3: $12,000,000
Facilities and Support Services Maintenance Projects: $14,575,000
Health and Family Services Maintenance Pool: $4,750,000
Western State Hospital Electrical Upgrade: $4,867,500
Adult Correctional Institutions Maintenance and Repair: $15,737,000
State Park Maintenance: $7,600,000
Kentucky Exposition Center Roof Repair: $8,000,000
More Kentucky budget coverage
- Gov. Matt Bevin proposes slashing $650 million in state spending
- Bevin proposes $60 million for overhaul of Lexington’s convention center
- Bevin exempts Medicaid from spending cuts but vows to end Kynect
- Bevin’s budget spares K-12, cuts higher education
- Kentucky Arts Council not eliminated in Bevin’s budget
- Kentucky Road Fund to see minimal growth