Lexington Center Corporation wants a developer to redevelop a Rupp Arena parking lot, and is proposing the creation of a tax-increment financing (TIF) district to back the project.
Home to University of Kentucky basketball, Rupp Arena is set to receive numerous renovations as part of a project that includes an expansion of the Lexington Center convention facility (depicted in the rendering above). In order to compliment that expansion, Lexington Center Corporation–the agency that runs the facility–hopes to recruit a developer that would build several amenities on what is currently a parking lot across High Street from Rupp Arena, with the project potentially backed by TIF.
The vision for the potential TIF district development includes several amenities, highlighted by a 160-room hotel, 70,000 square feet of restaurant and retail space, and a parking garage. The proposed TIF district is not final, as it will have to go through several layers of approval in order to move forward. More from the Lexington Herald-Leader:
Tax increment financing uses new taxes generated within the district to pay for public infrastructure, such as parking garages. According to documents submitted to the city, an estimated $101.9 million in tax revenue generated by businesses in the new district would be given back to Lexington Center over 30 years instead of going to the state and city. That includes $90.3 million in state taxes and $11.6 million in local taxes.
If approved, Lexington Center would use the first $65 million to pay for a parking structure, sewer infrastructure and other site work. If a private developer builds the garage, Lexington Center will reimburse the developer, but only if new tax dollars are generated by the development, said Lexington Center officials.
The proposed district includes the High Street parking lot, Rupp Arena and the attached convention center, and what city leaders hope will eventually become Town Branch Park, a proposed 10-acre park behind Rupp between Jefferson Street and Oliver Lewis Way.
The Lexington-Fayette Urban County Council must approve the TIF district. Kevin Atkins, chief development officer for Lexington, said the council will likely hear more about the proposal later this month. If approved locally, the application goes to the Kentucky Economic Development Finance Authority, which has final say on the tax break.
The proposed TIF district would not would factor into the funding for the $241 million Rupp Arena and Lexington Center renovation, which already has its own dedicated funding sources. Ground for the expansion/renovation was broken in July, with work slated take place in phases. That will allow Rupp Arena and much of the Lexington Center convention facility to continue operations during the construction period. The project is slated to be complete by November 2021.
Rendering courtesy NBBJ.
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