The Cordish Company is no longer partnering in the project to develop a 600-room luxury hotel in downtown Louisville.
Louisville Mayor Greg Fischer announced on Tuesday that Omni Hotels and Resorts will take over the entire planned project for a hotel, more than 225 apartments, a grocery, two restaurants, retail space, 70,000 square-feet of meeting space and a multi-floor art gallery.
“As we got deeper into the project and it grew in scope and size we realized that it would be best to simplify the project and have a single developer, and Omni agreed to take over the entire project,” Fischer said.
Cordish will continue to focus on Fourth Street Live operations, Fischer said.
He added that $900,000 was given to the Cordish Cos. for Fourth Street development “to help facilitate the transition to a single developer on this project.” That money is in addition to the remaining $2.1 million Cordish received in a deal with the city in 2007 for “soft costs” associated with Fourth Street Live development, Fischer said.
The city also “agreed to give $250,000 a year to Cordish for the next nine years” in the way of tourism tax credits, he said.
The project is slated to be completed no later than May 2018, Fischer said. It will be located at what is known as the Louisville Water Co. block near Muhammad Ali and Second Street.
Here is a rendering of the project. It is set to become the third tallest building in downtown Louisville.
The project is estimated to create 765 construction jobs—with 20 percent minority and 5 percent woman-owned business participation—and 320 permanent part-time and full-time jobs, Fischer said.
All of construction jobs will be prevailing wage positions, he added.
Funding for the project will come via a public-private partnership, Fischer said. Omni will pay 52 percent of the development costs—about $150 million—and the remaining 48 percent, $139 million, will come from the city and state through a tax increment financing, or TIF, district.
The TIF district for the project will be isolated to the block where the building will be developed, Fischer said.
“Once the Omni is open and operating the state will rebate a significant portion of the new taxes generated by the project back to the project, and the city will rebate a percentage of the new occupational taxes on the jobs that previously did not exist,” Fischer said.
He added that block is currently “non productive” in terms of producing taxes.
“With the Omni project all of that changes in a super-dramatic way,” he said.
The city will issue $120 million in bonds in a 30-year transaction which will be paid primarily in TIF revenues, said Tom Howard, managing director at Commonwealth Economics.
“It would be a general obligation of the city, but current estimates have the revenues in excess of the required debt,” Howard said.