Why are we giving $2 million to soccer, horseracing out of infill fund? | Opinion
Last year, Mayor Linda Gorton introduced what seemed like a very good idea. She wanted to take $3 million from the general fund to create an infrastructure investment fund to provide repayable zero-interest loans to developers to develop in-fill properties.
Gorton said the funding would be “gap” financing or the last money into the project.
This was aimed at new business and affordable housing projects, which are notoriously expensive and difficult to finance. It also, I thought at the time, was a good response to the development group known as Lexington for Everyone, which kept running ads about opening the Urban Service Boundary for new businesses and homes.
But about 18 months later, we find, that fund’s first two projects are for neither in-fill nor development. Instead, they are being used as forgivable $1 million loans to the Lexington Sporting Club to build a new stadium complex out by Athens Booneboro and I-75, and to Keeneland to help with their $93 million expansion.
Even though these two projects are neither in-fill nor redevelopment and have absolutely nothing to do with affordable housing, they’re allowed to get this money because it’s allocated by the Economic Development Investment Board.
Kevin Atkins, the city’s Chief Development Officer, said in-fill and redevelopment was “a focus, but not a requirement,” of the $3 million infrastructure fund, he told council Wednesday.
The projects “had to lead toward economic development and job creation,” and these two projects will do that, both on site and through more restaurant and hotel service jobs. The money has to be used for infrastructure like parking.
Now, I don’t blame Keeneland or the Lexington Sporting Club for looking for all the help they can get. One million here, $1 million there, and pretty soon we’re talking real money. Also, I guess as of last month, the sports club is technically inside the Urban Service Boundary, thanks to some last-minute changes by the Planning Commission.
What I object to and have done so extensively in these pages is the misguided way governments use economic development incentives, both randomly and so frequently that hardly anything private gets built anymore without corporate welfare.
Here are just a few: The developers who got incentives to evict a trailer park of its low-income residents to build a gas station in Morehead. The way a developer rewrote state law so incentives could cover the shopping mall he wanted to build. The incentives to young developers to build a hotel in the Distillery District, already thriving without any government interference.
This is more of the same.
Lexington Sporting Club initially said it wouldn’t use public money for a stadium until county governments started fighting over them with incentives. Full disclosure, as a low-level soccer mom whose kid’s team was absorbed into LSC, I’ve gone to other tournaments around the state and in Ohio and seen how many people soccer tournaments bring to other towns.
This project will bring a lot of people here, and it’s already promised to host all of Lexington’s high school soccer and lacrosse tournaments. Still, carving soccer fields out of farmland is not really in-fill and redevelopment.
But Keeneland?
We don’t know how much money Keeneland sits on because it keeps its finances very secret, but it gets money from racing and sales — last year, it got commissions off of $700 million alone — and the historical racing slot machines at Red Mile and now its cut of sports gambling.
Ginny Ramsey is over at the Catholic Action Center holding bake sales to get shelter for homeless kids and we’re giving $1 million to Keeneland? The optics, as they say, are not great.
Atkins said that Keeneland needed proof of local support to get tourism tax credits from the state. One million dollars in support? We love Keeneland. We support it, and I bet we could all write letters to that effect.
But when Lexington is facing the kinds of problems it has, money from a fund that was supposed to help developers build affordable housing should not be going to a horse racing facility. (If I’m wrong, and Keeneland is struggling to get by, then they can show us their financials, which they did not have to do when they made the request to the city. I will happily write another column.)
On Wednesday, a couple of council members raised questions about this. They also talked about using some of the city’s fund balance to build a new day shelter and transitional housing facility.
That’s great. Also great is the city’s investment in homeless prevention, roughly $47 million since 2014. But before this comes up before council on Thursday, I think council members need to spend more time discussing what the city’s money is designated for and what it’s spent on, particularly when it comes to hugely successful and already established businesses.
This story was originally published November 1, 2023 at 7:46 AM.
