Update on CentrePointe
On Tuesday, September 16th, the developers and the administration together brought forward a new CentrePointe TIF proposal for council consideration. The council voted unanimously to support a bonding mechanism for the parking garage, an initiative coordinated by the Kentucky League of Cities. My vote for this project was guided by two beliefs:
1.) A successful development in the heart of our city, complete with a downtown parking facility, is a good outcome for our community.
2.) The project’s many twists and turns as well as its financial complexity have made the funding mechanisms difficult for the public to understand. This is why I have supported a clear bottom line throughout: no liability for the Lexington-Fayette Urban County Government.
Beth Musgrave with the Herald-Leader provides a straightforward summary:
The city’s only obligation is pledging the new tax revenue from the project to pay the debt, Juett said. If the development is not successful, the city and the League of Cities will not be responsible for paying off the bonds. All the risk is on the buyer of the bonds.
During the meeting, Vice-Mayor Linda Gorton also highlighted an important concern: what if the bonds do not sell? We learned that this risk is reduced when a private underwriter purchases all of the bonds up front and then resells them to bond buyers, which we were told is likely. In either case there is no risk to the city.
As the Herald-Leader reported, the city’s only role in the agreement is to pledge a portion of the additional tax revenue to pay back the bonds. That means if the project is economically successful and brings in more tax revenue to LFUCG, a portion of that new revenue will help pay back the bonds. The TIF bonds will be used to finance the new parking facility and no other aspects of the CentrePointe development.
The council was unanimous in its support for this latest financing proposal. It is my hope that, with this last financing piece in place, this long-delayed project will now go forward successfully.
