By Sarah Brookbank
University of Kentucky School of Journalism and Telecommunications
Despite the elections on Tuesday, Monday evening was a full
of business for the Midway City Council, starting with the regular council
meeting and ending with a public hearing on tax increment financing for
redevelopment of Midway Station's commercial and residential zones.
The big-ticket item at the council meeting was the approval of the rezoning from residential to industrial 38.22 acres on Georgetown Road that touches the edge of Midway Station. Without discussion, the council approved the rezoning, requested by the Woodford County Economic Development Authority.
The EDA has an option to buy the property. That would create 80 acres of industrially zoned property, and EDA representative Craig McAnelly said between the meetings that the agency is looking to put as many as three plants on the property.
Prospects for redevelopment of Midway Station have been
centered on tax-increment financing, which allows developers to use the
increased tax revenue from a refurbished area to retroactively pay for the
public infrastructure of a development. Lexington developer Dennis Anderson has proposed the financing method.
Citizens at the public hearing raised
questions about the necessity of TIF.
The first comment came from John Schaaf, a resident of
Ironworks Estates in Scott County, just across Elkhorn Creek.
“I would like to speak in favor of free enterprise rather
than a free handout to this particular developer and his financial backers,”
said Schaaf.
Schaaf said that it was his understanding that developers
recover the money that they put into infrastructure through sale of the
property. Schaaf’s concern was that Anderson would get “a double return on his
infrastructure costs” through TIF and sale of the developed properties.
“If this is going to be a successful development I think it
should be undertaken in the spirit of free enterprise,” Schaaf said. “He should
take the risk, he should put in the infrastructure and he should recover that
money from the people who intend to benefit from having property in that area.”
“I don’t know that the taxpayers of Midway, or the state of
Kentucky should be underwriting this project.”
Schaaf said the property’s location and the improving
economy mean that it should be able to be redeveloped without TIF. He said
that he did not have a problem with the development, but with the way it will
be financed.
In response, Anderson consultant John Farris of Commonwealth
Economics said the city of Midway would retain 20 percent of incremental tax
revenues, and TIF does not apply to school taxes.
“We estimate an additional 200 to 300 thousand dollars
coming in to the city of Midway just on the 20 percent, not the school taxes
and property taxes,” Farris said.
Farris said the redevelopment has a very large amount of
infrastructure that needs to be done and it comes at a high cost. At an earlier
meeting, Farris presented a list of infrastructure work totaling $31 million,
including nearly $15 million for public parking.
Midway resident Nick Bentley, who has experience as a
real-estate broker and a developer, spoke next.
Bentley said that he was pleased to see the rezoning of the
38 acres, since residential areas cost more for a city to service and maintain,
and the area will need to be balanced between retail, industrial and
residential so that it will be a net positive.
“My biggest question is, why as a taxpayer, as a developer,
as a builder, as a Realtor, as a businessman, do I have to compete against
subsidized property?” Bentley asked. “Why as a landlord do I have to say ‘Oh,
no one gave me any money when I rehabbed blighted property,’ and I mean a
nickel, but now I’m going to be asked to compete on the open market with a
subsidized housing project?”
Bentley asked what would happen if millions of dollars are
spent on infrastructure and the property never sells. He asked where the money
that would be spent on infrastructure would come from.
“It’s the EDA that put this thing in place to start with,”
Bentley said, noting the project’s failed 25-year history. “It’s a question of
how do you trust the horse that takes you to the poisoned well. I don’t.”
Bentley called the estimated infrastructure costs
“ridiculous” based on his own experience in the area.
“I’d sure like to see the books, because if I spent 30
million doing that property I’d be going broke,” he said. “So why are we asking
the taxpayers to spend more than they need to? I don’t believe those numbers.”
Bentley said the TIF program takes the fiscal responsibility
off the developer.
“In this case they’re asking the taxpayers to pay 30 million
dollars, instead of ponying up what a developer would normally have to do,” he
said. “I don’t get it, I think it’s kind of anti-American if you ask me
personally.”
In response, Farris said that the $14.9 million for parking
is an estimate, and reminded the council that the project is “receipt based,”
meaning the developer has to spend money to get reimbursement. He said that
this is a way to make the developer spend less money.
Farris also addressed who would pay for the infrastructure.
The City of Midway has yet to determine how this project would be funded, but
there are options. Some cities bond the TIF rather than pay upfront. Others,
such as Lexington, make the developer take the risk on the infrastructure
costs, and some take a hybrid approach.
Later in the hearing, Council Member Dan Roller also asked
about retaining sales tax from the development. Farris said that 80 percent of
incremental sales taxes would be available to pay for infrastructure, under
state law.
Roller also asked about the timeline of infrastructure
development and the payment. Farris said
development will be needed before the property can be sold, and that
some of that involves updating the current infrastructure and putting down the
basics. Farris also said that much of the development timetable will have to do
with demand.
EDA Chairman John Soper said the EDA is confident in
Anderson’s ability to finance the project. Soper also said that he feels like
the EDA has the confidence of the city council, fiscal court and of their
banks.
Soper stressed that the project needs to be started so that
they can go back to the banks in 2019 when the bond on the property matures and
renegotiate finances.
“It makes all the sense in the world to do it, and to do it
now,” he said. “Especially with the economy, it is recovering and we’re
starting to get calls at least weekly about these properties. We haven’t hit
the home run yet, we’re having a lot of conversations and that’s a whole lot
better than it was two years ago.”
Soper also said he hopes the council and citizens of Midway
could get behind the TIF application process because it would solve
infrastructure problems and boost employment.
Contrary to expectations, there was not statement at the
meeting from Woodford Forward, which identifies itself as “a group of citizens
and business owners that advocate for innovative policies that promote the
highest and best use of urban land and the agricultural use of productive farmland
throughout Woodford County.”
Billy Van Pelt of Woodford Forward said the organization
would announce its position known after a meeting with Anderson. Anderson was present at the hearing but made no
comments.
Council meeting
Other business at the council meeting included a
conversation with Keith Slugantz, the director of emergency management in
Woodford County. Slugantz fielded questions from council members Grayson
Vandergrift and Aaron Hamilton about the issues with tornado sirens in Midway
in early October.
On Oct. 7, a tornado warning was issued for Midway and surrounding areas by the National Weather Service, but the sirens in Midway went off 17 minutes after they should have, due to an equipment malfunction. The sirens had to be set off by the emergency management department through a portable radio that did not reach all the sirens in the area. Slugantz reassured the council that the issue had been resolved and would not happen again.
Renovations of the Rau building were also discussed. The historic green and red Rau building sits on the corner of Main Street, housing City Hall, offices and the Breckinridge shop. Contractor Phil Kepler said that to keep the historic building from constant repair and damage, that it should be redone and modernized with better wood and new glass. This will keep drafts out of the building, stop the wood from rotting and will make the storefront last much longer.
At the end of the council meeting, outgoing Mayor Tom Bozarth made a statement regarding the next day’s election for mayor, between Council Members Sharon Turner and Grayson Vandegrift.
“I want to thank Grayson and Sharon for their hard work.
You’ve both ran a very good campaign. It’s been very positive… Good luck
tomorrow.” Vandegrift won with 53.4 percent of the vote; for a report on the mayor's race, click here.
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