Frankfort, KY – New incentives are under consideration for the long-awaited CentrePointe development.
The Kentucky Economic Development Finance Authority met Thursday to consider an impact report on tax increment financing (TIF) for a redesigned CentrePointe, a mixed-use development in the core of Lexington’s downtown.
The group met in a closed special session to discuss the findings of the report. Its details were not maybe public by the board, which is its protocol. After the meeting, CentrePointe consultant John Farris, president of Commonwealth Economics, confirmed the group discussed a CentrePointe TIF.
“There’s a necessary process that we have to go through, and this was one of the steps that gets us closer,” Farris said. “Our goal is to have final approval from the state in July.”
Farris, who was accompanied in the closed meeting by CentrePointe developer Dudley Webb, said the findings of the report by the Chicago office of the Los Angeles-based AECOM, will be presented to Lexington’s Urban County Council in the next couple of weeks.
Farris said he was pleased with the findings of the report, which AECOM associate Kimberly Gester said could become public soon.
“If the city decides to release it, it is up to them. In the past Lexington has decided to release its TIF reports,” she told Business Lexington following the closed-door meeting
Originally announced in March of 2008, CentrePointe has gone through many incarnations, all based around a large hotel and residential presence with some commercial and retail space to be included around the street level. Demolition of the block meant to house the project commenced in the summer of 2008, but no further construction occurred as the nation’s economic crisis took hold.
The most recent set of plans for the block show separate buildings spaced around the block rather than one large building with a center tower, as was the original plan. In May, Cincinnati restaurateur Jeff Ruby said he would open a steakhouse on the now empty block in Lexington’s downtown in May of 2015. At the time, Webb said there was still work ahead, including TIF approval, before any potential tenants could be officially announced.
The TIF incentives CentrePointe is after allows developers to recoup certain expenses in the construction of large-scale developments. The scope required of those developments has been lowered since the state originally approved TIFs in the 2007 General Assembly. The law – designed by Farris who served at the time as the state’s Finance and Administration Secretary under Gov. Ernie Fletcher – originally required a $200 million investment by developers. This year the legislature dropped it to a $150 million threshold, with that change taking effect Tuesday.
With the TIF, a district is designated and developers are eligible to capture local and state tax revenues above what is currently being generated within the district’s boundaries. While those newly generated tax dollars — from greater property values, increases in the amount of sales, corporate income and personal income taxes — in the district would normally head to state and local coffers for general distribution, all of the newly generated money would be returned for specified improvements in the outlined district.
In other public business, the economic development board improved incentives for local expansions by engineering company Stantec, Brown-Forman’s Woodford Reserve Distillery and Toyota.
Stantec to Bring 30 New Jobs to Lexington
According to documents released by the Economic Development Cabinet, Stantec is looking to consolidate its two Lexington offices, one on North Forbes and another on East Vine into one location in addition to adding 30 “engineers and/or scientists and support staff.”
The jobs would reportedly come with compensation of $50 an hour on average including benefits and be phased in over seven years. The state documents show Stantec would plan to add 20 of the jobs within the first year.
The board approved Stantec for a 3 percent reduction on taxes for 10 years based on the salaries of the new jobs, and stated Lexington would do the same up to 1 percent, pending council approval. In addition, Stantec would receive $450,000 in incentives.
The board was told Stantec is considering two different locations in Fayette County to consolidate its offices, and informed that if it chooses a TIF district, the percent based incentives would not be returned to the company.
Lexington does not currently have an operating TIF district.
Stantec's Regional Leader for the United States Southeast Region, Don Armour, said he could not comment on where the company is looking to place its state and regional headquarters.
Webb said he could not comment as to whether Stantec was considering CentrePointe.
Stantec currently has three offices in Kentucky, the two in Lexington and one in Louisville. The company has more than 200 offices worldwide and employs more than 12,000 people.
The new jobs in the Lexington area would be an expansion of their current operations which focus largely on civil engineering with the main clients being the Army Corps of Engineers, the Tennessee Valley Authority and the Kentucky Transportation Cabinet, Armour said.
Woodford Reserve to Expand Capacity
The board gave the same salary incentives to the Brown-Forman Corporation for adding 15 jobs at its Woodford Reserve Distillery in Woodford County. Those incentives could reach $2.5 million as the company looks to invest $35 million in the bourbon distillery. In addition, the board approved Brown-Forman for tax benefits up to $500,000 through the Kentucky Enterprise Initiative Act, which allows companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing equipment.
Brown-Foreman VP and Director of Global Community Relations, Rusty Cheuvront, Jr., said the company will be adding stills and warehouses for aging barrels at the facility to keep up with demand. The Woodford Reserve Brand saw a 28 percent increase in sales last year, he said.
“The business is really going well, the industry is really going well,” he told Business Lexington outside the board meeting.
Toyota to Expand Georgetown Facility
As part of its already announced plan to build the Lexus ES 350 in Georgetown, Toyota was granted a $2.6 million incentive to construct an additional 310,540 square feet onto its production plant for a new assembly line.
The board will meet again on Thursday July 25, where it is expected to consider the TIF for CentrePointe.