Even before ground is broken this month for two Bowling Green development projects, the investment in the Tax Increment Financing district is fast approaching its $150 million signature TIF status.
So far, $143.65 million has been spent on projects.
And as work progresses in the next two months on projects under construction such as Bowling Green Municipal Utilities’ new office building, the Warren County Downtown Economic Development Authority will ask the state to certify that signature TIF status, according to its chairman, Doug Gorman.
Nearly $30 million more in projects are under construction in the TIF now, which would count toward that certification. The TIF runs from Western Kentucky University to the river and is bounded in part by U.S. 31-W and Adams Street, but does not include Fountain Square.
When you consider the commercial project to be built on two sides of the parking garage and WKU’s School of Nursing, both of which will begin construction this month, the total will then amount to more than $200 million, according to TIF documents. Work has to be finished before it can count toward the status.
Clinton, Chris and Ed Mills are the private subdevelopers for the commercial project on the parking garage wrap, and Commonwealth Health Corp. will sell bonds for its building that will contain WKU’s School of Nursing.
The TIF actually has until December 2014 to reach the $150 million level. The significance of reaching that signature level is that the city and developers of many of the projects in the TIF then would start to receive a portion of the taxes created by the new jobs and sales made in the 49-block TIF area.
That money would be used to repay both groups for their work thus far.
Gorman said once the state certifies that signature status, it would calculate those payments. Any additional development in the district over the next 27 years will allow those tax returns to continue coming back to the TIF.
Some have been critical of the perceived lack of private funding that has gone into the project, something that rifles Gorman a bit.
“We had a man from Massachusetts spend $8 million of his own money to bring a baseball team here,” Gorman said. “This community has been blessed by Mr. (Art) Solomon.”
Having that baseball team here created 20 full-time jobs and 120 part-time jobs and has been the impetus for some of the development since, he said.
There has been private investment in medical facilities, residential housing, fraternity housing and other projects totaling more than $46 million that has already been spent, according to TIF documents.
More than $3 million in private funding is being spent to purchase and renovate the old Bowling Green Junior High School. While part of the property had an apartment building on it, the remainder had been a perpetual construction site with little work going on for years.
Since the purchase last fall, construction fences have come down but work has steadily progressed, with the lease-a-bedroom housing facility to be ready for WKU students in the fall.
One of the largest private projects was the nearly $24 million expansion and improvement of The Medical Center.
The Medical Center’s parent company, CHC, will add even more to the total of private funds invested when it breaks ground this month for a nursing building. The project is expected to cost $16 million to $18 million, with WKU’s lease of the space being primarily paid with tuition fees from the new students that an expanded program can serve.
WKU’s alumni also are funding the Augenstein Alumni Center, which is in the TIF and adjacent to WKU’s campus.
“The alumni association has raised $5 million for the project so far and would like to raise $1.5 million to $2 million more to pay for furnishings,” WKU President Gary Ransdell said. “That is all being paid for with private funding.”
The funds will be used to pay for the lease on the building, just as the WKU Student Life Foundation will pay for the lease on the housing wrap around the parking garage.
“Western won’t actually own any buildings in the TIF, but it is contributing to its development through lease payments,” Ransdell said.
The center is expected to be completed in late December with a move-in date of January.
Ransdell said on hold for now are WKU’s plans to build campus police offices and a bookstore on the other side of the parking garage that has the student housing on two sides of it now.
“We had wanted to use New Market Tax Credits for that, but Kentucky didn’t get enough ... allocated for us to use them,” Ransdell said. “So we are seeing if there are credits from somewhere else we can use.”
Ransdell said if the university can’t find the credits, it will look for other funding to at least build the campus police offices, something that is a priority.
Ransdell said he is still working with a single developer to build a hotel in the block next to campus and the alumni center.
“That talk had been quiet for a while ... but now the developer is back and engaged,” he said. “We are hopeful, anxious and optimistic. But we are going to be patient and work with this one developer.”
Has there been public money spent? “Yes,” Gorman said. “And now we are seeing private investment.”
Some of the public projects include parking garages, the ballpark and the Southern Kentucky Performing Arts Center.
SKyPAC bonds are being repaid in part with a special motel tax, and other projects will be paid for when the TIF revenue comes back. The TIF revenue also would be used to pay off a portion of the SKyPAC debt.
More than $5 million in public funds was used to purchase land and improve infrastructure that includes more than $1 million to improve stormwater drainage in the area, Gorman said. There is a large underground drainage system that was installed under the parking garage, and a few months ago a retention basin was installed off Adams Street.
The city also received a Community Development Block Grant to improve drainage in the area, according to city public works Director Jeff Lashlee. That project, which cost about $126,000, was near the Bowling Green Area Chamber of Commerce.
Since those projects were completed, the flooding that previously occurred at intersections on College and State streets’ lower blocks has mostly disappeared, Lashlee said.
People outside Bowling Green are starting to see the fruits of the labor here, Gorman said.
Outside companies have requested information about the commercial space that will be available on the ground floor of the wrap of the parking garage.
Both Gorman and Ransdell are excited that the signature status will be reached well ahead of the deadline.
“It’s a terrific tribute to the leaders across the community,” Ransdell said. “So many people have been important to its success.”