Developers planning to build a pair of upscale hotels in downtown Louisville are one step closer to getting millions of dollars in city tax incentives to help fund the project.

A Louisville Metro Council committee on Tuesday unanimously approved a tax increment financing plan for the project slated for the corner of First and Main streets. The plan will go before the full council next week for final approval.

Under the incentive plan, the developer, Poe Companies, would get a rebate up to $6.3 million through added tax revenue to help offset the cost of the some $70 million project.

Tax increment financing plans, of TIFs, allow developers to get a rebate of a portion of the newly generated tax revenue from the completed project. There are a variety of options for developers, but most local TIFs require recovery of blighted areas and a demonstrable public good.

Rebecca Matheny, executive director of the Louisville Downtown Partnership, supports the plan to send millions of potential tax revenue back to the developer.

She said the site, on the eastern edge of the city’s Whiskey Row, would likely struggle to attract a development “in the course of a long time” and bringing the pair of hotels would be a boon for the historic stretch of Louisville streetscape.

“We’re absolutely thrilled,” she said.

Laura Ferguson, an assistant director with Louisville Forward, expressed support on behalf of the city’s economic development arm. She said the project site is currently a surface parking lot and the historic facade standing along the streetscape will be incorporated into the development.

“The project is located within the state Arena TIF, so that the state revenues generated by this project will help that TIF,” she said. “It will also provide hotel rooms to help with the renovated convention center.”

Steve Poe, the developer, said his company has developed nearly 1,800 hotel rooms in Louisville since 2001. And he stressed there is a “need for more high end hotel rooms” in Louisville.

He said the KFC Yum Center, the city’s push to advance bourbon-based tourism, and the ongoing renovation of the Kentucky International Convention Center are all factors that have “changed the dynamics in downtown.”

He said the planned project would open “almost simultaneously” with the reopening of the convention center.

The pair of hotels will be about 14 stories tall with potentially a rooftop pool and bar, Poe said.

Tax increment financing plans have been used in the development of the several high-profile projects in Louisville, including the KFC Yum Center, the University of Louisville’s Shelbyhurst campus and, more recently, smaller residential developments that include the revamping of the The 800 Building downtown and Axis Apartments, slated for Lexington Road.

The incentive program is seen as a popular — and controversial — tool among local legislators.

Mayor Greg Fischer, in an interview with 89.3 WFPL earlier this year, said tax incentives for private development projects in general are not ideal, but they are necessary to generate economic development — in part because of the competition they create among cities and states.

“They come at the expense of the taxpayer,” he said. “But if [the recipient is] required to keep in-grow or attract jobs here, it’s better to have those than not have them.”

Fischer said incentives encourage cities and states to compete with each other to attract companies and ultimately jobs.

At present, there are 19 tax increment financing agreements in place throughout Louisville, totaling nearly $2.5 billion in developer incentives — in many cases stretching over decades. That comes out to some $29 million in local tax revenues, with the rest falling to the state.

Jacob Ryan is a reporter for the Kentucky Center for Investigative Reporting.