Framing the Issue
With support from city government through tax increment financing, developers of Gateway Commons are moving forward with their $390 million mixed use project off Highway 54 along the by-pass that will include a new arena and convention center.
What does that leave for downtown and the riverfront? What action steps can we, as a community, take to improve our downtown without these key anchors?
When state legislators expanded tax increment financing (TIF) in March 2007, cities and entrepreneurs across the Commonwealth responded with alacrity. Local developer David Hocker was the first to announce an intention to apply for a “Signature TIF.” He proposed an ambitious mixed use commercial development off South Frederica Street that would also include several major public facilities: a new events center, ice arena, tennis complex and more. These public projects and the project infrastructure would have been financed through new tax revenues generated from a designated TIF district – taxes that otherwise would be going to Frankfort. The public projects purportedly would generate traffic to enhance the marketability of the commercial space.
When Hocker could not secure commitments from major retailers that were central to his proposal and timeframe, he abandoned the project, leaving Gulfstream Enterprises as the only other local firm gunning for a “Signature TIF.”
Gulfstream proposes a $390 million Gateway Commons project off Highway 54 along the U.S. 60 By-Pass: 630,000 square feet of retail space; 240,000 square feet of restaurants and office space; 115 condominiums; 116 apartments; a $12 million 250-room hotel; a $77 million 6,000-seat arena; and a $50 million 130,000 square foot convention center. Developers estimate that the project would generate thousands of jobs.
City government officials not only endorsed the Gulfstream proposal, they agreed to work with the firm on an exclusive basis for a year with regard to a TIF District. They adopted a Memorandum of Understanding followed by an ordinance on August 28 that sets forth the agreement.
The developers subsequently agreed to shorten the exclusivity clause in the agreements to allow the city to pursue another TIF district in the downtown area beginning January 1, 2008.
The Gulfstream proposal faces challenging hurdles: approval of the state TIF review board; confirmation of anchor tenants; completion of a feasibility study that will satisfy bond underwriters and prospective bond buyers. It may be many months before the feasibility of the Gulfstream project is determined.
Meanwhile, an opposition group, Citizens for Public Accountability, is challenging the legality of the ordinance adopted by city government that establishes the TIF district for Gulfstream.
On a parallel track over recent months, a new Downtown Development Corporation (DCC) was meeting to develop a master plan for the downtown area. The DDC examined previous studies, met with stakeholders, secured a design firm, and released a plan that recommended:
The DDC concluded that funding for these projects could come from private investors and developers, state and federal government grants, tax increment financing (through a “blighted area” classification that is less ambitious than the Signature TIF), occupational tax, hotel tax, restaurant tax (would require state authorization and a local referendum) and more. Both city and county governments have expressed a commitment to downtown, but tax increases for that purpose have received lukewarm response.
The DDC went on to recommend that an authority be established to acquire downtown property, that incentives be developed for facade restoration and conversion of upper level space for downtown apartments and condominiums, that an arts and entertainment district be developed that builds upon the RiverPark Center, museums, Fridays after Five, festivals and more.
The DDC was not charged with the responsibility of attracting a developer for purposes of making a TIF district proposal for the downtown. DDC officials recommend that a strong public sector investment be followed by incremental requests for proposals from developers connected with specific sites.
The Greater Owensboro Chamber of Commerce and Economic Development Corporation (EDC) endorsed the Gulfstream proposal. EDC offered many of the same recommendations as the DDC, but the agency also suggested an urban village theme for downtown, a boutique hotel, recruitment of corporate headquarters, enhancements to the courthouse square and more.
The City of Owensboro’s federally funded Community Development program and state funded Main Street program is working together to develop a user-friendly electronic database of downtown properties. The Main Street manager is attempting to mobilize downtown property owners and tenants for visual enhancements, business development, joint promotions and more.
Meanwhile, the city continues to implement the federally funded Riverfront Master Plan. A new English Park boat launch facility is under construction, to be followed by the installation of a retaining wall and Smother’s Park expansion that will get underway in the spring.
County government is completing an impressive restoration of the Smith-Werner Building facade and is moving forward with a parking garage in conjunction with Audubon Area Community Services. County officials have expressed a preference for a downtown arena and convention center over the Highway 54 option.
The Owensboro Metropolitan Planning Commission adopted an “Overlay District” along Veteran’s Boulevard (First Street) to restrict new first floor uses to those that are accessible to the public and thematically complementary. OMPC has also opposed the rezoning of the Gateway Commons property because, officials claim, the project is incompatible with the goals set forth in the agency’s Comprehensive Plan that has already been adopted by city and county government.
Downtown Design Standards are in place, adopted in the 1980s by city and county government as a guide for building restoration. The guidelines have facilitated several quality improvements, but building owners are not obligated to comply.