Frankfort, KY - Both the Lexington Distillery District and the Phoenix Park and Courthouse area project in conjunction with CentrePointe are closer to reality as the Kentucky Economic Development Finance Authority (KEDFA) gave both projects preliminary approval Thursday morning in Frankfort to take part in the state's Tax Increment Financing (TIF) program.
From here the projects could get final approval and start collecting tax increments within 90-120 days under the Cabinet for Economic Development's timeline. A third party consultant for the state, Chicago-based Economic Research Associates will work for the state to determine the projects' feasibility and increments.
"By granting preliminary approval, KEDFA would enable staff to begin working with the Office of the State Budget Director and the Department of Revenue to create criteria for which a consultant would review the project feasibility including financing, appropriateness for the use of the TIF program, and potential increments, and whether the project represents a net positive impact to the commonwealth," Cabinet for Economic Development material stated in the explanation of the process which is new to the cabinet from the original TIF law passed in 2007. "Upon completion of the consultant's report and if it is determined that the project provides a net positive impact for the commonwealth, staff will then begin the negotiations to determine the level of participation by the commonwealth and what taxes will be used for incremental financing. Once negotiations are finalized, staff will then present the project to KEDFA for final approval."
Both projects were given unanimous preliminary approval from the small KEDFA board with relatively little discussion of the projects.
Distillery District developer Barry McNees called the board's vote "a huge, significant step."
The CentrePointe project, which itself is not reliant on the TIF approval, but instead will be used to fund projects at the old courthouse and Phoenix Park is working on getting lane closure permits along Main and Vine to allow for construction according to Kimberly Bryant, and attorney with Greenebaum, Doll and McDonald.
Bryant also said architectural engineering is going on for the under ground parking garage to be associated with the project.
TIF laws in Kentucky allow for areas deemed blighted to capture tax revenue above current levels that are generated by redevelopment to go back into the TIF district to fund public projects such as infrastructure and public spaces. While the taxes themselves are not higher than any other area of town, any new tax money from the area which normally would go into the city and state coffers will go to reimburse the eligible projects for 20 years in the case of the Distillery District and 30 years for the CentrePointe project.