The Louisville Metro Council is hosting a public hearing this week to gauge public opinion on a proposed ordinance that would provide millions of dollars in incentives to developers looking to build a pair of hotels in downtown.
Developer Steve Poe and his partners are planning to spend some $70 million on a project that would erect a pair of upscale hotels at the eastern edge of Louisville's historic Whiskey Row.
To offset that cost, they're seeking up to $6.3 million in tax incentives via a tax increment financing district, according to a filing with the council's labor and economic development committee.
Tax increment financing districts, or 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.
The financing tool has 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.
The council's public hearing is set for 4 p.m. Tuesday at City Hall in downtown Louisville.
