Wednesday, September 7, 2016

Council OKs measures to bring 262-employee plant to Midway Station; property-tax cut; snow-removal bid

By Elizabeth Allen, Claire Johnson, Alex Kearns, Emily Priddy and Ben Wolford
University of Kentucky School of Journalism and Media

The Midway City Council approved financing mechanisms for Midway's soon-to-be largest employer, a tax cut for property owners and a bid for snow removal at its meeting Tuesday evening.

Lakeshore Learning Materials, an educational-products company, is expected to bring 262 new workers to its new distribution center in Midway. They will receive a tax break, paying an occupational tax of 1.5 percent instead of the normal 2 percent for 10 years, as part of the incentive package that helped attract the company.

Paul Chisholm, VP of Lakeshore Learning Materials
Paul Chisholm, the company's vice president of Eastern U.S. distribution, said he and his colleagues spent 15 months in "five or six states" looking for a location for the new facility. “It was really the culture of Midway that fit with our third-generation, family-run business,” he told the council.

There are other incentives. The financing package will put the future Lakeshore property in the name of city. In turn, the city will lease the property to the company, and the lease payments will be equal to the bond payments, about $50 million. This is less than the American Howa auto-parts plant being built in Midway Station, which will employ about 60.

Bond attorney Mark Franklin of Louisville said the city will have no liability, and the package is the only way in state law to exempt an industry from state, county and city property taxes. However, the deal will not shortchange Woodford County schools, because a "payment in lieu of taxes" agreement sets Lakeshore up to pay the schools what they would have paid in taxes.

"Generally, companies do not want to short the schools, especially a company in the business of providing educational materials," Franklin said.

Veteran Council Member Dan Roller asked what would happen "if our new friends decide to walk away in five years." Franklin said Lakeshore would pay off the bonds and take title to the property, making it taxable.

Two council members asked about support facilities that could make Midway a more attractive as a potential residence for new workers and their employers.

Roller asked if a child-care facility would be provided, and Sara Hicks asked if a gym could also be considered "so we could keep our workers healthy." Such facilities could also make Midway an attractive place of residence, rather than a commuting destination, for new workers and their employers.

The child-care center is a good idea, said John Soper, chairman of the Woodford County Economic Development Authority, which owns the property. EDA Executive Director Craig McAnelly said a gym has also been discussed. Chisholm said the company has a child-care facility at its California headquarters.

Mayor Grayson Vandergrift thanked Soper and McAnelly for bringing Lakeshore to Midway Station, which had been a failed industrial park and will now be a mixed-use development, with commercial and residential areas too.

“A lot of people worked to get this done … and I appreciate it,” Vandegrift said. “We’ve had an empty piece of land there for a long long time that had an uncertain future and in the last year we have basically set our city on a financial path forward. Not very many small cities in Kentucky can say that.”

Property taxes: The council passed on second and final reading an ordinance setting a lower real-estate tax rate for bills that will be mailed this fall: 10.2 cents per $100 of assessed valuation, down from 10.7 cents last year. The rate will generate about the same amount of money because property values in the city have gone up. The personal property tax rate for 2017 rate will remain 14 cents.

Park board: The council approved the first reading of an ordinance to establish a park board to "conserve, manage and sustain" the city's parks, following a recommendation from from the Citizens Advisory Committee. Council Member Libby Warfield said the board would take some of the burden and responsibility for the park from the council.

The board would have five to seven members, including at least one council member, all appointed by the mayor and confirmed by the council. One member would serve as park manager, reflecting the high level of recent volunteer activity at Walter Bradley Park. Members could live outside the city limits but would have to be residents of Woodford County.

Snow removal: The council geared up for winter weather by extending the deal with the city’s snow removal contractor, Wright’s Farm Services of Richmond, after removing a provision that would have required the city to provide a backhoe for loading salt. "Salt's hard on equipment," said Council Member Bruce Southworth, who asked for the change.

The other bidder for snow removal was Parks Landscape Group of Versailles, which asked for $30,000 for the winter or $90 per truck hour plus $225 per ton of salt. Wright's bid was a maximum of $1,562 for a 2-inch snowfall, with lesser charges for salting without plowing. The bids are part of the council's document packet, downloadable here.

A helping hand: The council heard first reading of an ordinance for refinancing of $1.8 million in tax-exempt bonds for the Lexington Montessori School. All Kentucky cities can issue a limited amount of tax-free bonds each year; Midway's limit is $10 million, but Lexington has already exceeded its limit, Vandegrift said. Four students from Midway attend the school. City attorney Phil Moloney said such bonds incur no liability to the city.

Basketball blacktop: The city's current blacktop contractor reduced his bid for resurfacing the city basketball court to $5,000, from $9,000, leaving the total cost of this year's paving just under the $80,000 the city budgeted. The contractor is getting about $74,000 to pave Northside Drive, and city officials argued that his incremental cost to do the basketball court would be much lower than what he bid.

Smoke alarms: Vandegrift noted that the Red Cross and emergency-services volunteers will canvass targeted neighborhoods Saturday to install free smoke detectors. He said volunteers are still needed, and should meet at the city firehouse at 9:30 a.m. Lunch will be provided.

Sidewalk repairs: The mayor said a list of sidewalks approved for cost-sharing from the city, because repairs would improve public safety, will be provided at the next meeting, Sept. 19.

Information for this story was also gathered by Marissa Beucler, Matthew Hunter, Olivia Jones, Evan Merrill and Kaitlin Taylor of the University of Kentucky School of Journalism and Media.  

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