Monday, December 22, 2014

Ordinance allowing Midway Station redevelopment with tax-increment financing passes; county action next

The Midway City Council gave final approval Monday morning to the ordinance that will allow redevelopment of Midway Station by paying for public infrastructure improvements with the increased tax revenue from the development.

Approval came quickly, as soon as city attorney Phil Moloney read the lengthy title of the complicated tax-increment financing ordinance. All five council members present voted for it; Sara Hicks was absent.
Council members raise hands to vote for TIF as attorney Moloney, Mayor Bozarth and City Clerk Phyllis Hudson look on.
The TIF ordinance authorizes 80 percent of the new property and payroll taxes generated at Midway Station (not including school and fire taxes) to be used to pay the estimated $31 million cost of redeveloping its public infrastructure: parking areas, streets, sidewalks, utilities and so on, as well as the associated costs of demolishing the existing infrastructure, which was designed for an industrial park.

The park has generated only about 10 jobs, leaving the city and Woodford County with $4.7 million remaining in debt from the $6 million in bonds issued for purchase of the property and its development.

Lexington developer Dennis Anderson is paying the $11,400 monthly interest on the bonds in return for an option to buy and develop the property as commercial and residential, under an agreement with the property owner, the Woodford County Economic Development Authority.

Some of the property, and an adjoining tract on which EDA has an option, was recently rezoned back to industrial to help attract one or more industrial prospects, such as a supplier plant for the Toyota Motor Manufacturing Corp. complex at Georgetown.
Optioned tract recently zoned industrial is white outlined in purple. Area earlier rezoned industrial for prospective factory is mainly yellow outlined in purple. Area in solid purple has been zoned industrial since original development of Midway Station.
County Judge-Executive John Coyle said recently that he expects the county fiscal court to join with the city in applying to the state for approval of the TIF district, which would funnel county taxes to it as well as city taxes and state property taxes.

Anderson has said he has secured private financing for what would be a $126 million project, with development lasting as long as 20 years, the maximum life of a TIF district. His consultants estimate that the project will generate $94 million in tax revenue over 20 years.

Under the ordinance, the mayor will be primarily responsible for overseeing the TIF district and its finances. Midway will get a new mayor on Jan. 1, one-term Council Member Grayson Vandegrift, replacing Mayor Tom Bozarth, who did not seek re-election to a third four-year term.

"Thank you very much," Bozarth said as he adjourned his last meeting as mayor. "It's been a pleasure and a joy. Hallelujah."

Council Member Bruce Southworth told Vandegrift after the ordinance passed, "Here's the ball; it's the handoff."

Vandegrift told reporters after the meeting that TIF appeared to be the only way to get Midway Station off dead center. He said he doubted that a developer would be available without such incentives.

"The only disagreement I heard from people about the TIF [district] was a philosophical disagreement as to whether taxpayer money should be used in this way," he said, adding that was a question for state legislators, who passed the law allowing it.

Asked if the city would have approved TIF if it were not on the hook for half of the bonded indebtedness, he said, "I'm sure it had something to do with it."

He added later, "The fear is, if we let this go down, it is just going to sit there for another 20 years. . . . I don't know of anybody who doesn't want Midway Station to do something . . . especially given the fact of how much money we owe."

Vandegrift concluded, "This whole Midway Station thing has been a long, really, nightmare. We've got a chance to get it moving. . . . This is going to be the kind of slow, sustainable growth that we're looking for."

No comments: