Dudley Webb, the local developer and chairman of The Webb Cos., has a defi ant message for the many detractors and naysayers when it comes his divisive CentrePointe development, the long-delayed downtown project that so far has produced little more than a city block-size crater in the heart of the city.
“Everybody should sit back and watch the show because it’s going to be a wonderful project for downtown Lexington,” Webb told Business Lexington in a recent interview. He added that in the 40 years he’s been in business, “We never started one we didn’t finish – ever.”
Webb and his company are locked in a high-stakes game of chicken over the project, with the city warning it could enforce a fi ll-in order after March 30 as part of a restoration agreement. The company, however, never agreed it has been out of compliance and insists work is going forward at the site, which has stood empty since 2008.
“We are going to do it on our own,” he said.
Webb has broken his silence on the project after plans for new developers to take over the project fell through. The new developers — Kentuckian Matt Collins, along with New York development company Bridgeton Holdings — dropped out of the project in early February after their plan to develop the site with a new city hall anchoring the project met resistance from the city council. Webb said after that he “re-worked the numbers” and made the decision to move ahead alone.
But Webb continued to expand on themes contained in a scathing six-page missive he issued March 2 — formally addressed as a “statement to the public” — which took sharp aim at city officials and media reports.
“There are two sides to this story, and one side has never been told,” Webb said.
Webb maintains that he has tenants lined up for 40 to 50 percent of the planned office space, which could rise to between eight and 12 stories. Two hotels are planned for the site, said Webb: a Residence Inn and a Marriott.
“Nothing has changed,” said Webb. “This is the same plan that was approved when we applied for the building permits and excavation permits and which were approved for the TIF (tax increment financing). We’re going back to our original plan, which we waited on to try to make the project better.”
Webb says a parking garage, for which a mammoth, city block-wide pit was dug two years ago, will be built first. That is expected to take nine to 10 months.
“Then we go right up with the two hotel buildings, the office building and a Jeff Ruby’s Steakhouse building,” Webb said. “The project is a go, and everyone should be excited.”
Ruby in recent months has issued angry notes on his Twitter account about the project and Mayor Jim Gray, some of which he later walked back. He has also talked of seeking another site for a Lexington restaurant. Through a spokeswoman, however, Ruby declined to comment on Webb’s recent statements.
Apology, with caveats
As for the crater that has dominated the center of downtown for two years, Webb offered an apology to the people of Lexington, but one saddled with recriminations against city officials and media outlets.
“I apologize for that, but I also apologize for the actions of many others who have frustrated this process,” Webb said. “Every time we had good news, it seemed that they (city) countered it and (the media) ran negative stories about the project and personal attacks on me.”
Webb says he already has spent $28 million on the project and that when completed the total investment will rise to $180 million. As for the financing of CentrePointe, which has been a key stumbling block and a sore point with critics of the project, Webb remained cagey and defiant.
“I’m not going to tell you that. That’s not relevant at this time,” Webb said. “It’s all a private development, and everybody needs to understand that.”
Friction with city
But financing remains a main point of contention. Webb criticized city officials for making public comments about the use of tax money. After Collins and the New York developer dropped out and Webb said he was resuming work, the mayor’s spokeswoman issued a statement dripping with skepticism about the project’s prospects.
“If real progress is occurring, then it would represent a major turn of events,” the statement from Susan Straub reads. “Hopefully this isn’t more of the same that we have experienced for eight years. Our responsibility is to continue to protect taxpayer dollars.”
Webb insisted that there is no public money in the deal. However, he cites the city’s refusal to issue bonds to finance the garage portion of the project as devastating to the overall project.
Looking back to the dawn of the drawn-out project, Webb related his view of events and how he thinks he has been mistreated by the city. Webb said he got into the project because of a need for another downtown hotel with 350 to 500 rooms. In 2008, Webb said, he signed a TIF agreement with the city and state with the understanding the city would issue bonds for the parking garage.
“Not to guarantee them, not to sponsor them or to underwrite them, just to issue them, just like they do for schools and churches throughout the community,” he said.
Meanwhile, a European investor that Webb said he was counting on (and who to this day remains nameless) apparently died. The man’s family declined to invest in the project, according to Webb. Then, in the fall of 2008, the Great Recession began to take hold.
“The worst one ever,” Webb described it. “All new real estate development around the world stopped. That was true for the next five years.”
In 2013, money markets improved and Webb says the Marriott hotel chain was still interested in CentrePointe along with two tenants who wanted major space in the office building. One was Stantec, a company that provides professional design and consulting services. Webb said Stantec wanted five floors, while another local tenant wanted six floors.
In 2014, when the city brought in a special counsel, attorney Mason Miller, to help it through various CentrePointe issues, Webb said Miller “was intent on fouling it up and he did.”
Messages left seeking comment from Miller were not returned.
Webb said the city wouldn’t issue permits to excavate for the parking garage unless he agreed to sign the restoration agreement.
“We resisted and protested that,” Webb said. “Never before or since has that ever been required of anyone. For several reasons, we had to sign that agreement, under protest.”
Webb said he had construction equipment standing by, had a TIF deadline to meet and tenants who were waiting.
By summer 2014, Webb said the city still hadn’t issued bonds for the garage. Eventually, the Kentucky League of Cities agreed to issue them. But the delays were costly, said Webb, and major tenants began dropping out.
“They had every right to leave because we could not deliver the project on time,” he said. “That was a huge loss for the project. It happened and there wasn’t much we could do about it.”
Pressure, maneuvering
Last year, the city began making moves to pursue the fill-in order. By late summer the Collins group and Bridgeton Holdings were offering to build a new government center as part of the CentrePointe development.
“It was not the best use of that prime property,” said Webb. “It wouldn’t generate the taxes a private property would bring but at least it was a good use and it could be an iconic building.”
But the city hall idea was abandoned last month and everything funneled back to Webb and his latest plans for the site. Since Webb announced the project was moving forward, workers have been spotted at the site but it’s unclear exactly what was being done.
So now a city grown weary of the project’s delays and inconveniences watches as the possible March 30 showdown with city approaches. Webb for his part betrays no room for talk of fi ll-ins, take-overs or further delays.
“It’s our money, on our property, and the key is that it’s now ready to go,” he stated.