EDA and city start 'new era' at Midway Station, consider how to maximize value, pay off debt and still create jobs

Mayor Grayson Vandegrift spoke to the Woodford County Economic Development Authority board Friday.

By Collin Kruse and Kristi Fitzgerald

University of Kentucky School of Journalism and Media

               Now that developer Dennis Anderson no longer has an option on the Midway Station industrial park, the City of Midway and the Woodford County Economic Development Authority are wrestling with the development's future.

               The board of the EDA, which owns the land, discussed the future of the property, and its debt, at its monthly meeting on Feb. 22 in Versailles. It was the board's first meeting since Anderson terminated his option Feb. 7.

               Anderson had paid the interest on the property's mortgage in return for the option, which he exercised on several lots, selling them. Beginning July 1, the city and county will each have to start paying interest of $3,000 per month on the $2.477 million debt remaining on the land. 

               It may be hard for the EDA to be particular about land sales when the need to get money to pay debts is tying them down.

               EDA Chair John Soper suggested that the agency might be faced with the prospect of selling lots to employers who would create few jobs, as happened in the first phase of development many years ago. He said that would conflict with the original, long-term goal of the project.
               “Our goal is to produce long-term, re-occurring revenue, not just land sales, but the debt gets in your way,” Soper said.

               The treasurer’s report at the meeting said the land is valued at $2.967 million, based on sales amounts subtracted from the approximately $5 million that Anderson would have paid EDA if he had exercised his option. If that figure is accurate, the land is worth half a million dollars more than is owed on it, but EDA also has to spend money on legal work, engineering and maintenance.  

The board saw a potential redesign of the property in Midway Station
Station under and adjacent to the two high-voltage electric lines.

             If the land available in Midway Station sells for its estimated value, then the EDA could be short of paying the city the $600,000 it owes it on natural-gas and water lines built to the property. Mayor Grayson Vandegrift asked if Midway could receive a share of funds from future land sales after an unspecified “grace period.”

               Soper said, “We’ve got some immediate maintenance issues we need to deal with over there,” and money for that could come from getting additional lots from land at the east end of the property that has not been platted for development. He said that would require approval of banks that hold the debt.

               Vandegrift also showed interest in this section of Midway Station, suggesting that if access can be granted to the South Elkhorn Creek, the more rugged portion of the land that was left undeveloped could be used for recreational purposes.

               The land along the creek is owned by Homer Michael Freeny Jr., owner of 138 acres next to Midway Station that the city is annexing. He has expressed a desire to make that area public property for access to the creek for canoeing and other activities, with access through Midway Station and/or the tract being annexed.

               The mayor thanked Soper and the EDA board members for their "hard work," said Midway Station had entered "a new era" and it would be better for them, the city and county to finish developing the property than for an outside developer to do it: “It is important that we as a community develop it rather than outside interests.”

               The board made two definitive moves with the intention of getting the most value out of the land. First, it passed a motion to request rezoning of about nine acres, the last residential zone in Midway Station, into industrial.
               Some areas will remain zoned for professional offices. Planning Director Pattie Wilson said that would create “a good transition” from the commercial section in the front of Midway Station to industrial section in the back. Soper said the change would make Midway Station’s land more marketable because buyers won’t have to worry about the rezoning process.

               The board also agreed to have lawyer Bill Moore take a closer look at the deeds for tracts that have been sold to identify any provisions for maintenance of the industrial park, such as a property owners' association. “Somebody’s got to have some kind of responsibility for maintaining the common area,” board member Gene Hornback said.

               A strip of high voltage electric lines that run through Midway Station was also a topic at the meeting. Original plans were to have two-story commercial buildings accompanied by parking under the lines, but Soper has been working on a redesign to maximize the property value. “What you end up with on both sides of those lines is not much buildable land,” he said. “We’ve got to deal with this in some form or fashion.”

Council OKs paying off debt for sewage-treatment plant, saving money that will be used to lower customer bills

By Sarah Ladd

University of Kentucky School of Journalism and Media

The Midway City Council decided Monday to grant Mayor Grayson Vandegrift’s request to pay off the sewage-treatment plant’s bond issue and eventually lower sewer bills for Midway.

Vandegrift sent a letter to council members on Friday asking them to consider cashing in one of the city’s three certificates of deposit to pay off the $196,885 left on the wastewater plant. The city has been paying $30,000 on the debt twice a year, plus $9,000 in interest and fees to the Kentucky Infrastructure Authority, a state agency.

Paying off the bonds will use 42 percent of the city’s CD savings of $473,483. The city’s annual budget is about $1.1 million. The CD that the mayor plans to cash in is worth $285,490. The remaining $88,605 after paying off the treatment plant would be rolled into a new CD, he said.

The city’s three CDs are now worth a total of $473,483. With the council’s approval of paying off the wastewater plant, that number will decrease to $276,483. Vandegrift pointed out that the city is paying more in interest on the debt, 3.8 percent, than it is making on the CDs.  

Council member Bruce Southworth said, “Anytime we can avoid paying interest is a good thing.”

City Clerk-Treasurer Phyllis Hudson said after the meeting that the CD being cashed in is paying 0.6 percent. Based on CD interest payments Vandegrift mentioned at the meeting, the one for $125,000 is paying 0.3 percent; and one for $58,000 is paying no more than 0.5 percent.

With the plant debt paid off, the city will save at least $9,000 in sewer revenue each month, which, Vandegrift reiterated Monday, should lead to lowering sewer fees by “at least 25 percent . . . in a few months.” He said lowering these fees has been a goal for a long time, but “what I did not expect is it to be this soon; but it’s a great thing . . . something that literally affects every single person in the city in a positive way.” Sewer fees are based on the amount of water used.

“It’s the fiscally responsible thing to do,” Vandegrift added, noting the city’s “healthy” general fund, which has been boosted by payroll taxes from new business and industry.

Vandegrift thanked the council (member Sara Hicks was absent) for approving the motion and said that he has received many messages from the public thanking him for working to lower bills. “Some people have said ‘I never thought I’d see this day’,” he said. “It’s been a community effort. … Thank you all very much.”

Other Business: The council tabled a funding request from extension agent Elizabeth Coots and the Homemakers and 4-H clubs for their 13th annual backpack project, which provides Woodford County students with basic school supplies. The council has $1,100 remaining in its donations budget, and Council Member John McDaniel said, “We have two backpack programs in Midway through the Presbyterian church and the Baptist church, and I would rather that money go to the programs here in Midway.”

Christian Juckett, a bond attorney with Rubin & Hays in Lexington, and Amanda Hale, development director at The Lexington School, asked the city council to again issue tax-exempt municipal bonds on behalf of the school, this time to finance a new learning center. The city would not be responsible for the $5 million in bank qualified debt, Juckett explained, but would serve as the catalyst for issuing the debt.

The Lexington School uses Midway as a financing tool because state law allows such bonds to be issued only by local governments that issue less than $10 million in bonds in that year, and Lexington issues more than that, Juckett said. He said 19 of the 600 students at the private school, and 13 staff members, are from Woodford County, and Hale said she is a native of Midway.

Vandegrift invited Juckett and Hale to return at the council’s next meeting, July 30, for a formal vote on their request.

Midsummer Nights on Main: Following the June 29 Midsummer Nights in Midway traffic arrangement that allowed the closing of the north side of East Main Street, the council agreed to follow that precedent for the next event dates, July 27 and August 24.

“I think it went very well,” Vandegrift said of the arrangement. He said the crowd seemed bigger this year, and “people fit better.” 

Mayor asks council to pay off debt on sewage-treatment plant, saying it would lead to rate cut of at least 25%

By Sarah Ladd

University of Kentucky School of Journalism and Media

Ahead of Monday’s city council meeting, Midway Mayor Grayson Vandegrift announced his intention to ask the council to pay off the city’s active wastewater treatment plant to allow lower sewer fees for water customers. 

Vandegrift would do that by cashing in one of the city’s three certificates of deposit, which total $473,483. That would leave CDs totaling $276,598.

Vandegrift told the council in a letter on Wednesday that the funds would be applied to the remaining balance on the wastewater plant, now $196,885. He said the city pays $60,000 a year on the loan, in two $30,000 installments, plus $9,000 in interest and “other services.”  He said the city would have an extra $9,000 in sewer revenue each month, leading to “lowering sewer rates for our citizens”

The next step, he explained, would be “letting the sewer fund build up some revenue for a few months,” then make some projections. “Once we feel that our sewer fund is sufficiently increased, I would then ask you . . . to vote on lowering sewer rates at least 25 percent, to begin with.” Sewer fees are based on water usage.

Vandegrift noted that the city recently paid off the old sewer plant, which had to be replaced before the bond issue used to build it was retired.

The CD that the mayor wants to cash in is worth $285,490. The remaining $88,605 after paying off the treatment plant would be rolled into a new CD, he said.

“Our current financial position is so healthy that I see no reason why we should continue to pay interest on a debt we are able to pay off,” he added. “Cutting sewer rates will help make Midway a city that is more affordable for everyone, and will be a major step in fixing one of Midway’s longest running problems.”

The council meeting is scheduled for Monday, July 16 at 5:30 p.m. at City Hall. All council meetings are open to the public.