Tuesday, August 25, 2015

County approves tax-increment financing for Midway Station; state approval, last hurdle, comes next

The plan to redevelop most of the Midway Station industrial park into a residential and commercial community cleared its next-to-last hurdle Tuesday evening, as the Woodford County Fiscal Court joined Midway's plan to do it with tax-increment financing: subsidizing the redevelopment costs with most of the added tax revenue from the development.

The magistrates and County Judge-Executive John "Bear" Coyle added one new element: No money can be paid to the proposed developer, Dennis Anderson, without the county's approval. In tax-increment financing, a developer applies to the local authority for reimbursement of the costs of providing public infrastructure, such as parking lots, streets, sidewalks and utilities.

The county's passage of the ordinance creating a TIF district means that county tax revenue will be included in the 80 percent of payroll- and property-tax revenue, not including school and fire taxes, that would be dedicated to paying for public infrastructure that Anderson has estimated will cost $31 million.

The ordinance passed without dissent, but had been delayed for months while some magistrates sought assurances about TIF from the state auditor. Stephenie Hoelscher, spokeswoman for the auditor, told the Midway Messenger, "Essentially, we said we’d take a glance at it, but we cannot bless any sort of contract or agreement. That’s not what we do. They may have a great contract that falls apart upon implementation. We advised that they should make sure there are sufficient oversight capabilities."

Midway Mayor Grayson Vandegrift said in an email last month, "The delays by the fiscal court have surprised me, especially since the heavy lifting will have to be done by Midway. I have no problem with them being as cautious as possible, though." Vandegrift will be the official primarily responsible for overseeing the TIF district.

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.

The county and city developed Midway Station, north of Interstate 64, as an industrial park 25 years ago. The project has largely failed, creating about 10 jobs. That has left the county and city on the hook for interest payments on the bonds used for development, now at $11,400 a month. Anderson is making those payments in return for an option to buy the property from the Woodford County Economic Development Authority, which holds title to the property.

Anderson has said he has the financing to begin the project and hoped to begin work this fall, but that is unlikely to happen before spring because the TIF district must still be approved by the state. Preliminary approval usually takes one to two months and final approval at least four months, said John Faris, a consultant for Anderson.

Anderson has said the project will cost $126 million, with development lasting as long as 20 years, the maximum life of a TIF district. His consultants have estimates that the project will generate $94 million in tax revenue over 20 years.

Midway Station was rezoned several years ago for commercial and residential development, but the Great Recession prevented development. More recently, as prospects for industry presented themselves, the rear part of the property was zoned back to industrial, and the EDA optioned an tract between that and Georgetown Road and got it rezoned industrial. The EDA board will hold its regular monthly meeting at 8 a.m Friday at the courthouse in Versailles.

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