# Planning Committee - October 16, 2007 > Auto-transcribed civic record · Committee · October 16, 2007 - **Permalink**: https://meetings.lexingtonky.news/meeting/187 - **Source video**: https://lfucg.granicus.com/player/clip/187?view_id=14&redirect=true - **Date**: 2007-10-16 - **Body**: Committee - **Last revised**: February 1, 2026 - **Length**: 9,857 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed by OpenAI Whisper-1. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude Sonnet. Speaker labels and verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Lexington-Fayette Urban County Council Planning Committee convened on October 16, 2007, at 1:00 PM with Ms. Gorton presiding as the meeting chair. The committee addressed two agenda items during the session, focusing on economic development and financing matters affecting the urban county. The committee took one formal vote during the meeting, which resulted in tabling the DDA Land Bank Budget Amendment for future consideration. The second agenda item involved an informational presentation on Tax Incremental Financing, providing committee members with educational content on this economic development tool without requiring formal action. No public comments were heard during this meeting, indicating either limited public interest in the specific agenda items or that the committee did not allocate time for public input on these particular matters. The meeting's focus remained primarily on internal committee business and information gathering related to development financing mechanisms within Lexington-Fayette Urban County. ## Attendance All committee members were present for the October 16, 2007 meeting. **Present:** • Gorton • Blues • Gray • Ellinger • James • Beard • Stevens • Stinnett • Crosbie • McChord **Absent:** None **Late:** None ## Votes and Decisions The Committee took one formal action during the October 16, 2007 meeting. **DDA Land Bank Budget Amendment Review** Dr. Stevens made a motion to review the DDA Land Bank Budget Amendment after more structure is provided. The motion was seconded by CM James. The motion passed unanimously, though specific vote counts and individual member positions were not recorded in the meeting documentation. This decision indicates the Committee's desire to revisit the Downtown Development Authority's Land Bank Budget Amendment once additional organizational framework or details are established. The unanimous support suggests broad agreement among Committee members that further review would be beneficial with enhanced structural information. No transcript timestamp was available for this vote in the provided documentation. ## Budget and Financial Actions The Committee addressed one financial matter during the October 16, 2007 meeting. **DDA Land Bank Budget Amendment - $150,000** The Committee considered a budget amendment totaling $150,000 for the Downtown Development Authority's Land Bank program. This amendment would provide additional funding to support the DDA's land acquisition and development activities in the downtown area. The financial action involved allocating these funds specifically to the Downtown Development Authority to enhance their capacity for land banking operations, which typically involve acquiring, holding, and preparing properties for future development or redevelopment projects. No specific resolution number was provided in the available documentation for this budget amendment. The Committee's discussion and any voting outcomes on this $150,000 allocation were part of their regular financial oversight responsibilities for downtown development initiatives. ## DDA Land Bank Budget Amendment The Committee discussed a DDA Land Bank Budget Amendment during their October 16, 2007 meeting. This agenda item, listed as Item 1, focused on examining the proposed budget amendment along with its background and implementation requirements. Key speakers during the discussion included Harold Tate and Darby Turner, who addressed various aspects of the land bank budget proposal. The conversation centered on the amendment's history and the current status of the DDA's land banking activities. A primary concern raised during the deliberations was the need for additional organizational structure before moving forward with the budget amendment. Committee members expressed that the proposal required more detailed framework and planning to ensure proper implementation and oversight of the land bank program. The discussion highlighted the importance of establishing clear guidelines and procedures for the DDA's land banking operations before committing financial resources through the proposed budget amendment. This structural foundation was deemed necessary to effectively manage and utilize the land bank program's intended functions. After reviewing the amendment and considering the various points raised during the discussion, the Committee determined that the item needed further development. The lack of sufficient structural framework was identified as a key barrier to immediate approval. The Committee ultimately decided to table the DDA Land Bank Budget Amendment, postponing any final decision until the necessary organizational structure could be developed and presented. This outcome reflects the Committee's cautious approach to ensuring proper planning and oversight before proceeding with significant budget modifications related to the land bank program. The tabling of this item indicates that future meetings will likely revisit the DDA Land Bank Budget Amendment once the required structural elements have been addressed and incorporated into the proposal. ## Tax Incremental Financing The Committee received an informational overview of Tax Incremental Financing (TIF) and its potential applications in Lexington during agenda item 2. Harold Tate and Darby Turner served as the key speakers for this discussion item. The presentation focused on explaining the fundamentals of Tax Incremental Financing as a development tool and exploring how it might be utilized within Lexington's economic development strategy. The discussion examined the structure and mechanics of TIF programs, which allow municipalities to capture increased property tax revenue from development projects to fund infrastructure improvements and other qualifying expenses within designated districts. Committee members received information about the potential benefits and applications of TIF in supporting local development initiatives. The speakers addressed how this financing mechanism could be structured to meet Lexington's specific needs and development goals. The discussion identified areas where additional information and framework development would be necessary before implementing any TIF programs. This included the need to establish proper administrative structures, legal frameworks, and evaluation criteria for potential TIF districts and projects. As an informational item, no formal action was taken during this discussion. The presentation served to educate Committee members about TIF as a development financing tool and to begin preliminary consideration of its potential role in Lexington's economic development toolkit. The Committee indicated that further research and planning would be needed to develop a comprehensive approach to Tax Incremental Financing implementation. The discussion established a foundation for future consideration of TIF programs while acknowledging the additional work required to create an effective framework for their potential use in Lexington. --- ## Decisions - **Motion** — passed (0-0): Review DDA Land Bank Budget Amendment after more structure is provided --- ## Full transcript ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ ¶¶ This issue goes back to 2006 when the council approved a recommendation to move $150,000 from the Division of Planning budget to the Downtown Development Authority. And in June, on June 12th of this year, when your Purchase of Service Agreement came up, this item was tabled. So you're here to talk about this. Yes. Harold Tate, welcome. Sorry, I can't get my breath. I just came from a luncheon presentation from the women's business owners, and they were interested in what was going on downtown. So I apologize for being a few minutes late. Connie is handing out some information to you, and you should have three sets of information, two that deal with land bank and one that deal with the TIF, and we'll deal with the land bank first. Okay, the issue was tabled because some of the council members were interested in us going back and seeing what other cities were doing with land banks and how they worked and how they operate. So that's what we've been doing over the past few months is talking to people, meeting with people. Darby Turner and Kim Bryant with Greenbaum have been helping me on this issue in terms of the legal aspects of a land bank. And in addition to that, there was a small group of people that had been meeting with me about the land bank. Harry Richard with National City. Richard was in some of those meetings as well. Maloney, TG People. Jack Birch in terms of what are other cities doing in terms of land banking. We talked to Kentucky League of Cities and found out that there were several programs in the state. But there was one that was very, very successful, and that was the program in Louisville. And the Louisville program has been going since 1988. They have been able to bring in over 3,000 parcels of land that have been distributed to various agencies, non-profits, and for-profits both. And Darby will cover this a little bit more in detail, but the state through KRS created the ability for the establishment of land banks. Basically they're made up of three members, one that's appointed by the mayor, one that's appointed by the school board, and one that's appointed by the governor. All three of those people have to be residents of Fayette County, and they can be employees of that agency as well. What this allows you to do is to, one good thing is that if a piece of property goes on the county courthouse steps for sale and it does not meet the qualifications, that property automatically goes to the land bank. So that's been something that's been very helpful in Louisville in terms of getting additional land given to them to use back into the system for developers, be it for-profit or non-profit. They also acquire property with funds in Louisville, and they have developed a series of policies. They've developed a series of policies that deal how that land gets back into the system so that there is a way that a for-profit would come in and acquire the property at a reduced price. A for-profit agency, if they see a piece of property that the city has that they would like to, they basically pay market rate. But these policies were created by the city itself, and I believe the statute allows that to occur. So the policies can be created at a local level, but the state information establishes the basis for that land bank itself. So they do have a certain set of things that they can and cannot do, but then the local policies allow more direction to occur. The staffing in Louisville is done through community development, so it is done in-house. They have approximately three to four people that work on this program in terms of getting the information together for the board. They do work with other agencies to obtain information of parcels. Let's say code enforcement had a piece of property, and the property owner did not want to have that property anymore. They've worked with the land bank, so the land bank has picked up that property as well. Staffing-wise, they said it does take some time, though, because one thing that's very important is that when you turn that property over, it has clear title, that there are no liens on the property. So in some cases, they do have to do title search. They do have to obtain title insurance as well, so that when that property is turned over to whoever it is, it is clear title. Now, another thing that we found that I included in your packet, if you see there's a thing that says Louisville, there's three sheets to it. The first one talks about the land bank, a basic summary of the land bank itself, but then the second page talks about a vacant property review commission, and this is also something that was set up through KRS, and it is a commission that reviews property to determine if it's blighted or not. Now, the land bank does not attain a lot of land through this commission, but what this does allow is authority for code enforcement or whoever to clean up some properties in certain neighborhoods. And one thing that they do that's very unique, and we don't know if we can do it here in Lexington or not, we're still doing the research, is that if it's a vacant property that's been determined blighted by this commission, they get a tax that's three times the normal value. It's a way to encourage that property owner to fix up his property. So we wanted to give you that information as well, and that's on the third page at abandoned urban property. So that's how that agency works in terms of helping clean up some of the neighborhoods as well. I'm going to let Darby talk a little bit about the legal issues on this. Harold, we might see before we go on if anyone has questions about what you just covered. Okay. Be fine. Do any council members have questions? No. Okay. Thank you. Welcome, Darby Turner. Thank you. I'm glad to be here. I will tell you, I'm subbing for my colleague, Kim Bryant, who was taken ill late this morning, so forgive me if I'm not. She is the real expert in this area, but I think we can, hopefully can cover any questions and issues. Harold has very succinctly covered some of the legalities involved in a land bank. The land bank that Louisville uses, and keep in mind, you can establish a land bank under any criteria that you want to. However, if you do it under KRS 65350 through 65375, you have certain attributes that are distinctly advantageous to the land bank program. But under the statutory land bank, as Harold said, in Lexington, it would essentially be composed of a three-member commission, one appointed by the LFUCG, one appointed by the superintendent of public schools, and one appointed by the governor. Any employee may be of any of those entities may be that appointed member, but do not have to be. So that's the statutory composition. As Harold had mentioned, that land bank can, in fact, acquire properties in the traditional way. It can buy them, it can trade for them, and so forth. But the real advantage that the statutory land bank has is, per the statute, in any tax lien foreclosure sale, and that is after a foreclosure action for taxes has taken place and has been reduced to judgment, and there is an actual sale ordered by the judge, if the minimum bid, which would be the sum of all taxes owed on the property, is not attained, the property automatically goes to the land bank for no consideration. At the time the land bank then sells the property, well, one other point there, it goes to the land bank free of all of the tax liens. So it is clean title through the court sale and the extinguishment of all the tax liens. Now, upon the sale of that property by the land bank, the proceeds of the sale are required to be distributed first, obviously after the costs associated with it, first to the plaintiff for their costs in the foreclosure action. And as you know, in Kentucky, and particularly in Fayette County, it's not uncommon to sell tax bills and the foreclosure action may, in fact, be brought by a private party. So they're entitled to their recovery of their costs. And then a pro rata distribution among the taxing authorities whose taxes were extinguished of the remaining sum, then goes back to the taxing authorities. So you recover. The object is the property comes into the land bank. It has the ability to clear that title. It can then be conveyed out for productive purpose. There are provisions in the statute that it cannot be conveyed out to someone who's going to hold it to flip it later. It has to go to somebody who's going to develop the property. Those are laid out in part of the policies that can be established for it. And then the property goes back on the tax rolls for productive use being redeveloped either for housing, if that's where it came from, or any other particular use that it may have been. If it had been commercial property, it may go back into commercial use, et cetera. So those, that together with the ability to impose the vacant property tax, additional tax, is another mechanic here that really dictates or would seem to dictate the utilization of the statutory form to gain those advantages that might be had. But that's, in a real nutshell, the legal structure. You do, when you set one of these up, there would be an interlocal agreement between the LFUCG and the school board in this instance that you can create a lot of policies and a number of those things that Harold mentioned that Louisville has done. So that's kind of the mechanic of how they're set up, and that's really the advantage of using the statutory scheme as Louisville has done it. I'll be happy to answer any questions along those lines. Thank you, Darby. Are there Councilmember questions? Councilmember Blues. Thank you. Mr. Turner, you said that on the sale of a property by the land bank, the plaintiff has first refusal. No, it does not have first refusal. The proceeds from that sale get first distributed in an order of priority, first to the plaintiff who brought the action for their costs, not profit or anything else. Keep in mind, this only kicks in when there is no bid higher than the taxes owed on the property. Okay? Not what they paid for them, but higher than the taxes actually owed on the property. So they get their costs back. Then it gets distributed pro rata to the taxing authorities who were owed taxes in the original action. Now, on the sale, then, of the property, I was looking at item F here, that it cannot be sold to an entity that does not intend to use the property and intends to hold the property for investment purposes only. Can the land bank set up certain other rules of that? Absolutely. Absolutely. But that's created, obviously, to make sure the property goes back into productive use. Right. And so you can set rules that I'm thinking in terms loosely here of affordable housing or certain kinds of units and so forth. Right. And if those are affordable, yes. Thank you. I mean, if it's that type of property. Council Member Stephens. Thank you. And this would apply if it's adopted as laid out here to any property in Fayette County? That's correct. And it could be used for any purpose, as Mr. Blues suggested, for habitat or some affordable housing group that was looking for properties? And I think Harold may be able to speak to this, but in most of your situations, particularly in Louisville, most of the properties go to nonprofits and so forth who are engaged in rehabbing and putting that type of property back into productive use. Several months ago, we visited the state, the borough state college in Pennsylvania and investigated a program they have there of what they call student home buyback. And what they do in the borough through the local government, when a structure that's been used as a student home becomes available on the market, they buy it, rehabilitate the property, and they have created a land bank. And the land bank retains ownership of the land, but then this borough sells the house to a person who intends to be an owner-occupant, and that's the only stipulation they have on it. But they retain the ownership of the land. Would some program like that be a – could it work with this program? Yes. I mean, a land – what you're talking about is a land trust concept, and that's being discussed for utilization with the Davis-Bottom area, with Newtown – some of the land of the Newtown Pike extension to make that more affordable in terms of – So that would be different than the land bank? Well, it could be done in conjunction with the land bank. In other words, the land bank may or may not be the – might or might not be the actual trust, but if it wasn't, you could create the land trust in which the land bank could convey the property to to accomplish the same purpose. So it could be worked in cooperation with them? Yes. Is the one at Davis-Bottom going to be involved with this? I'm not exactly sure what the structure is. I know the land trust structure is – if it hasn't been approved yet, I think that's the main mechanic that they're utilizing in the redevelopment of that area. There was a sideways nod from somebody standing right behind you. Harold, let me let Harold talk about that. I think the intent of that is basically for that neighborhood only, in terms of the land trust being for the Davis-Bottom area. So land trusts don't apply to the whole county, they just apply to one area? No, the way that they're reviewing it right now, they're only looking at that one area, as Darby said, if this is something that policy wanted to address and include, it could be done. You could have multiple – I mean, you could have more than one land trust, depending on what you're trying to accomplish with it. Okay, thank you. Council Member Stinnett. Thank you, Chair. Darby, two additional questions on the legal structure. Is the school board participation, is that by statute? Is that by policy that we would set? What is the rationale for including the school board in on some of these land bank programs? Well, it is statutory. Okay. And the rationale is because usually they will have a significant – Property tax. They have something at stake with regard to particularly the tax foreclosure sales. Okay, I just wanted to make sure that was by statute. And Harold, feel free to answer this as well. Did you all look at Louisville and some of the land that they have purchased? Do they have a long waiting list, such as our PDR program may have, because our funds obviously would be limited to how much we could put towards it each year. Is there a big need for this in Louisville, where they have a waiting list a mile long? Yeah, there is a waiting list. It goes through periods where they'll get rid of land very quickly, sometimes where they won't get rid of the land. A lot depends upon the situation and where it's located. They gave us a couple examples that I'd like to share with you. In one case, we were concerned, well, why don't you get a piece of property that's like a brownfield, contaminate it or whatever? I mean, do you have the right to refuse it? Well, an interesting response from her was that, no, we want that because we can then take it and apply for the brownfield money, clean up the property, and get a viable piece of property back into the system again. So they were not discouraged by a property that was, quote, contaminated. As a matter of fact, they were trying to get as much of that as they could. So how do they become aware of properties? Do they have a staff that goes out? Do they take nominations from the council community? Can anyone nominate a piece of property for them to take a look at and they go out there? I mean, it's done a whole series. They do have, like I said, various staff people from different divisions who work with the staff to say, you know, there's a piece of property here. A gentleman's having a problem with it. He really doesn't want any more. They've had some cases where they have worked with a developer who has said, I'm interested in doing a piece of property, you know, and you own this property. Would you be willing to sell it to us? And that was one of the things we liked so much about the Louisville program is that with these policies, I mean, they specifically say if you're dealing for church, it's one way. If you're dealing for non-profits, it's a different situation. If you deal with a for-profit, it's a whole different situation. And like I said, it's been going since 1988, been very successful, but like they do have some periods where it's kind of slow and then it kind of speeds up again. They were talking about one situation. They were in a neighborhood that was kind of at that borderline of really coming back around, and a developer came in because he was developing a piece of property across the street and he wanted to see if he could get the other property that the land bank owed to include in his project. And they went ahead and sold it to him, not at minimum price but below market rate, because they felt the investment that they were going to make was going to help turn that neighborhood around, which in the long term would help, you know, the whole value, the city, the neighborhood, whatever. So the staff really does do a lot of homework and research before they take that property to the land bank board itself. And when we're talking about property, Dr. Stephens asked this a second ago, we're talking about all property within our urban service boundary, but we wouldn't go past that boundary, correct? Because of the PDR program? I think it's such a way that you can do it, you know, pretty much wherever. I will say right now Louisville is strictly dealing with the property of the city of Louisville because they just merged and they're in the process of changing that. But when we met with her, she was specifically talking about property within that old city boundary, but they were in the process of changing that. Because I know a lot of times, especially in our packet, it says on our description that only properties within the side of New Circle Road, which some of us do represent districts that don't have any property inside New Circle Road. So that would be a concern, you know, to make sure we're looking at all parts of the urban service boundary. I can think of a couple pieces on Long New Circle Road there that would be excellent candidates, of course, along my district. And one final question, would any staff members be employed by LFUCG to manage this, or would this be a total separate entity and staff and everything would be outside? Louisville does it within the city itself. So it is a staff responsibility of an agency within Louisville. That's just the way to do it. I'm not saying that's the way to do it, but that's how they do it. Very good. Thank you all. Council Member Baird. Thank you. Melvin, in your courthouse steps scenario, insert a lender in there and tell me who goes when and where. You might have thought I would ask a question like this. Well, yeah, if there is a lender involved in there, this only kicks in if there is no minimum bid that exceeds the taxes owed. So if a lender is in there, the lender has to protect itself with at least a minimum bid to cover the taxes. To cover the taxes. Right. And so the automatic mechanism does not kick in unless there is no bid above the tax or at or above the taxes that are owed. And in this program, is there any consideration we have the LexTran tax and the library and the conservation district and all that? We have conveniently left them out in some of our discussions about the taxes. We have that same question, frankly, and I don't have the answer for that. We're still looking into that, whether those additional essentially taxing authorities like the school board are not taxing authorities, but tax recipients have a seat at that table as well. But it's not stated that way in the statute. Thank you. Council Member Maloney. Thank you, Chair. I've been to a couple of these meetings. I appreciate Harold and Harry Richard for allowing me to sit in on those. Louisville did a great job last week doing their presentation. One thing that Kevin brought up, he was worried about Louisville just being an inner city. I think one example was that they are out in Hirshborn, which is now merged with the city. And it's a pretty nice neighborhood. They have a house out there that just the code enforcement went out there, and they've got major fine violations on it. And they're going to ask right now to take that house over and try to sell it to homeowners to be able to bring the money back in the land bank so that it would be used for your district, my district, and a lot of council members outside the city. Now, my question goes to Harold. Have you talked to Paula Keene on any of this yet to see how she feels about it? No. Because basically what Joe asked is for me to go out and do research in terms of what's been done. And, you know, at this point, yeah, to me, you know, the DDA is interested in this. But I think we need to start talking more than just Paula. I think David Jarvis needs to be brought in on this. The law department needs to be brought in on this. But we didn't want to get too far along if this wasn't a direction that you as the council felt we should move with. And I think this is a great idea. What I like about it is it's something that I brought up about a couple months ago when we did the $2 million infield redevelopment that I thought we need somehow to keep this money in-house. And to me, this is a prime example how they do it in Louisville with the land bank, that we could probably use our $2 million in the same scenario that we could set this committee up and let them also look at our $2 million for it. And I think all of it could come together. And that would be $650,000 on top of $2 million. That can also have a huge impact. And we can all follow the same kind of rules and guidelines. And maybe you might want to change it a little bit with the $2 million. I know it's for infield redevelopment. In my opinion, infield redevelopment inside the urban service. And a lot of people get the attitude that the infield redevelopment is downtown. And I just want everybody to understand, for instance, Dr. Stevens' idea about over there in Elizabeth Street and places like that, I consider that infield redevelopment, to revitalize the neighborhood inside the urban service area. And this, to me, would be the perfect place with our $2 million that the mayor proposed in his budget, that we copy this for the land bank, that it all ought to be under one umbrella. And also, community development also works with retails. A lot of people don't know that, but they do look into the retail business, and there may be times when we need, maybe have some ideas to do some retail downtown or someplace. But I think all this can be under the same pot the way it is. And Louisville does a tremendous job. And I've been bragging about Louisville for the last ten years about how good they do. And I keep, when we did the vacant lot about six or seven years ago, I was on that committee. I asked our law department to go find out how Louisville does it so good. And they just didn't, at that time, they really didn't want to do anything. And now we're finally getting to see where other cities like Louisville, Covington, and places like that are really working real hard for infield redevelopment. And I'm glad to commend you guys for finding a way to get through the loophole and educate this council that I've been trying to do with the law department for the last ten years on how easy these programs work in other cities. And I think this is a great way to start. And I really hope you all support this. Dr. Stephens. Thank you. My suggestion would be that in drafting this thing, that includes all properties within Fayette County because there are some areas that are, such as Athens, that are also known as Athens, which are a community of people living there that might be applicable to this, and that would be outside the urban service boundary. I see that from the notes that for some reason on September the 19th, 2006, I voted against taking money away from the Division of Planning and giving it to Harold. And I think that's because the Division of Planning, I thought, needed it more at that time. But I certainly support this issue now. Maybe not with $150,000, but thank you. Council Member James. Thank you, Chair. I did want to make a couple of comments to Council Member Maloney, and you talked about the infill and redevelopment area and how it should be considered either all of Lexington or all of the urban service area. And there's actually an infill and redevelopment committee. And within that committee there is a defined line. If you go to planning and ask them where is the infill and redevelopment area, someone at some point actually drew a line and they determined an area that's considered infill and redevelopment. So if we are going to properly do infill and redevelopment, we do need to make sure that the IR committee is aware and either they need to redefine the boundaries of infill and redevelopment, but we don't need to have different committees having a different definition. We talked about this in our council retreats of what is our definition of whatever, and we need to make sure that council and committee and infill and redevelopment and a land bank or whatever program that it's clearly defined. So we need to somewhere on ELMO or put it on paper, but make it official, what is our true definition of the infill and redevelopment here in Lexington first before we move forward with anything. And also to answer your request about Paula. Paula King and I have spoken extensively regarding a proposal for a land bank program. She's supportive of that and actually feels, and I won't speak for her, but I personally feel like community development would be a great place for this program to be housed because we deal with all of Lexington, and like you said, CDBG funding goes for housing, for business, for all types of things, and they're here for the purpose of community development. And I do believe that they're one of the most underutilized areas of our government, yet we expect a lot out of them when we go to them, where they need to have their hands in the fire of what's really happening. They deal with things after the fact, and they need to start getting on the front end of getting into pots of money where there won't be a year-and-a-half waiting list for CDBG fundings to fix up your house. Instead, we'll be creating good, safe housing and whatever else through community development. And I do agree with you that this would be a great place for that $2 million for infill and redevelopment. As long as the program was managed equally throughout Lexington, it should be a program that deals with all of Lexington and community development for all because if you don't live in the inner city, you're going to live somewhere else. And we all move around. We might live in the first district one year, and you might live in the fifth or sixth the next. So we need to make sure that we're taking care of all of our districts. I am interested in sitting with Louisville and seeing how things work as well. I feel a little bit left out that I didn't get to go with Richard and participate in that. So if anybody has any meetings regarding it, I'm really interested in this program and would really like to be included as much as I can. I do have one concern. I have a couple of concerns, and that's just, I mean, it might just be in naming, but the DDA land bank. I think it kind of, it just gives me a feeling, when people think of downtown development authority, they think of downtown. And there's some clear defined, again, boundaries of downtown development. And it's kind of scary when you think about everything that needs to be done in Lexington within the urban service boundary, and something is titled very specific. And maybe that's just the way it's come across. And I'm very appreciative of all the work that Harold does. I know you're at every meeting. I don't know when you have time to sleep, eat, or do anything, because you're at every meeting possible regarding development here in Lexington. So I'm supportive of the land bank program, and I want to have continued conversation. I want to make sure that we are discussing this as much as we can, that we are addressing the results of the Infill and Redevelopment Task Force. When we get that report out, I'd like to make sure that the land bank was addressed. And I think I did request for that to be included in some of those task forces. But I want to see a report out of what a very researched, widespread, and diverse group of folks come forward with of what is needed as far as land banking. So I would ask Dr. Stephens, do you know for sure if the land bank was included in any of those task forces, and if you know the report out of the task force or the Infill and Redevelopment Committee so that we don't jump the gun on anything, so that we don't go forward with one thing and then, you know, and we're messing up somebody else's hard work. Do you know, Dr. Stephens? Did you want to answer that, Dr. Stephens? I'll save that up until she's finished, and then I can answer it. Okay. Done. You're done. Dr. Stephens? I believe it is. Mr. King is in the back, and he's nodding in the affirmative. The core committee of the Infill and Redevelopment Initiative is meeting with the task forces and the advisors on Wednesday, and we'll make sure that that's so when we do that. And I agree that the original definition of the Infill and Redevelopment Area was the city limits in 1936. That's how it happened that way. And that related to certain ordinances that we were proposing at that time, which were subsequently passed, but that definition probably is subject certainly for review, and I would anticipate that it will be enlarged significantly. Thank you. And as far as the $2 million is concerned, if we want to put it all in the land bank, that's not going to leave much for other things, so we still have to figure out how the best way to spend that money is. Thank you very much. One quick question about the infill and redevelopment boundary that was set that many years ago. And then I think this committee has been working maybe ten years, I think, the Infill and Redevelopment Committee, and it's interesting that those that are interested in developing still have a difficult time even within those boundaries that are already defined as infill and redevelopment. If you restrict it, any type of development or rehab or anything of any type of housing in that infill and redevelopment area, developers would tell you this is some of the most difficult, difficult area to do anything with because of lead paint, because of asbestos siding, because of the size, the lot sizes, and things such as that. So while we are looking to expand the infill redevelopment boundaries, I do believe that at some point we need to pay particular attention to, as the mayor calls it, the Athens of the West, and from that time, this was the core of the city. This was the city, yet it continues to be neglected because it's difficult to do anything with, and we need to step it up. We need to step our bar up of what it's going to take. We may not be able to do what we traditionally do to rehab houses or to build houses, and closer to the urban service boundary, we can't build a house with brand new materials necessarily within the zoning constraints that were established so many years ago in the way that those neighborhoods are set up. So please, as a committee and as council members that are talking to folks and residents and thinking about development of Lexington, please consider the fact, take a drive-through. If you want to ride through that area, I'd be happy to go through that, but let's talk about some of the constraints in that area and what stops it from being able to be developed, and thank you. I probably took up too much time. Thanks. No, you didn't at all. Do other council members have questions? Chris King would like to maybe respond. Not so much respond as to make one very important clarification, and it's one of the most misunderstood concepts we have is the infill and redevelopment boundary. There is, in fact, no boundary in terms of what we study and what we look at and what potential you have in terms of setting policies towards infill and redevelopment. The boundary that we set was specifically designed to meet a very specific need that we had to do some differentiation in terms of requirements across zoning, and it was there's a small loophole in the state statute that let us define a boundary and therefore to loosen up some zoning restrictions and tighten up some zoning restrictions both within the defined infill boundary. We have begun to call that the regulatory infill and redevelopment boundary to help distinguish that from other types of areas that we may want to study from a policy area. So, again, I want to assure everyone that in terms of our policies and the things we are concerned about for infill and redevelopment, it's not limited to that boundary that we were forced to set to meet a requirement of state statute. Thank you very much, Chris. If there are no other questions, I have a couple of questions. And since I'm not offering any opinions, I won't turn the chair over to the vice chair. My first question is, Harold, on this Operation 2B, it talks about, or Darby, I guess you talked about that, meeting the minimum bid. In Fayette County, how many houses each year about fit into that category on average? I'm not sure I can answer that question. Typically, there are, and I don't even want to come up with a number. I know the foreclosure sales, courthouse sales, have increased radically, obviously with the difficulties in the housing market, mortgage market. Most of those sales have a tax component to them, but are not pure tax foreclosure sales. And as discussed earlier, there's usually a mortgage, a bank or other mortgage holder involved in those suits Not only is there a minimum tax bid, but there's also a minimum bid based on an appraisal that has to be met before there's not a redemption right. Most lenders try to extinguish that and take the property so they can dispose of the property. So right now, if a property doesn't get the minimum bid, the property gets turned over to the mortgage lender, or how does that work? Usually, the mortgage lender will, in any of those types of situations, the mortgage lender will make what is called a minimum bid. It's not the tax bid, but it's a minimum bid to make sure that there are not any redemption rights in the original owner. So the property then can be put back on the market with a clear title and disposed of. And that's usually about 80 percent, I think it's 60 or 80 percent of appraised value. Two-thirds. Two-thirds, there you go, of appraised value to extinguish that. So that's usually, in those types of situations, that's usually where the bidding starts. Not all the time, but that's usually where the bidding starts. Okay. Okay, my next question is a budgeting question. Where is this $150,000 right now? Since this was a June fiscal year 07 action, where is that money? It is still sitting in FY07 and will lapse to fund balance when we close 07. Okay, so it never, it's, is it technically in planning or is it in the lapse? No, it was actually moved to the DBA's department ID number. It was? But the process for approving them to get the money never finished in time for the fiscal year end. Okay. So we didn't have any authority to give it to them because their purchase of service agreement had not been amended. Okay. So it stayed there. Okay. So I guess my follow-on question then is, if I understand correctly, we haven't signed the purchase of service agreement. Is that correct? That's correct. And. The amendment to it to include the $150,000. Okay, just the amendment. Yes. Okay, I was going to say I hope that. His original agreement for his normal money was done. Okay, I hope we've signed that. Yes. So it's just that amendment. It's an item that would need to be considered when we do reappropriations, and we'll be doing those when we know where we are at the end of 07 when we actually get closed. Okay. All right. Thank you very much, Connie. Council members, what is your pleasure with this particular item? Would you like to see more? Dr. Stephens? I would move that it be recommended to the council for adoption. There's a motion to move this to the council for adoption. Now, I think I heard a couple of folks say that it needs a little more work, maybe. They're both shaking their heads yes. Dr. Stephens? Bring it back when the work is done. Okay. How about, well, there were several questions about different entities besides the school board and some other questions that maybe need fleshed out. Is it the sense of the committee that you would like to see this back in a more final form? Yes. Okay. May I make a comment? Yes. Since the Infill and Redevelopment Committee is researching this through their task force, would it not be appropriate to not deal with this, not do anything with this money until after the task force reports out? I think the money issue is separate from the land issue, the proposal for the land issue. And, Dr. Stephens, was your motion to do with the money or the land? No, I was to set up the machinery to do this, but not to decide how much money to give them. So that's very good clarification. Council Member Maloney? My question goes out to clarifications you all are wanting. Now, it sounds like maybe I support the concept. And to me, if we go on past this, the questions and concerns that you all have, shouldn't that be developed by this committee that, I mean, whoever, like Paula and whoever the three boards are, answer those questions, and then come back to you all, whoever, and answer those? Because they're the ones that really are going to have to do the research on all that. I don't know where this body, where these guys, all hell did was go out and find out that a city, what they do is doing this. And it seems like to me the ones who really need to answer all these issues and questions are the ones that are going to be doing the work. And I'm just trying to figure out who you're pointing the finger at to go out and get all this information back to come back to you all as a whole. And really, I think the concept should go on past and let them do all the work. Because it seems it would take collaboration with Harold and Paula King and some various other folks to put the final structure on paper. Yes. I would like a suggestion that I do get with Paula, Chris, David Jarvis, probably somebody from the law department, and that we kind of finalize it for you and then bring it back as a recommendation. And I'm happy to do it, but it's not just a downtown issue. It's a bigger issue than that. I would be happy to withdraw my motion and move that we review this when Mr. Tate brings it back. I hear a second. If you'll push it in on the computer, please. A motion by Dr. Stevens, seconded by Council Member James, to review this after you bring us back some more structure. Will do. Okay. Those in favor, please vote aye on your board. Yes. Thank you very much. Our next issue is the tax incremental financing, and we have some of the same players here. Harold Tate, would you like to start us out there? All righty. If I could give you a background on TIFs, tax increment financing. This is an issue that goes way back probably two or three years. The state had created a program of tax increment financing that Louisville was using to some extent. They've been very successful developing four projects and have two more that are underway. At this time, I was asked, Darby, how come Lexington could not participate in this TIF program? And basically it was because the way the language was written, and I think Darby will cover that in a minute. So with that, I went and talked to Kentucky League of Cities because Sylvia and her staff were very interested in TIFs as well, not just for Lexington, but for many cities across the state. So about two years ago, Kentucky League of Cities and I, we started going to Frankfurt and basically trying to see what we could do to get that language changed so it would become something that could be used by more than just Louisville. We were successful this year. The first year we were not. This year, though, we were successful. There were basically three programs that were created. I mean, I know you all are very interested in this program, but I'll be honest with you. We're getting information weekly in terms of what the final results and final procedures are that we'll have to go through in terms of developing a TIF for each city. Harold, occasionally people from the public watch these meetings. There are at least two, I'm sure. Could you explain particularly for the public the basic of tax increment financing, what it means? Yes, I can, but I think I'll let Darby do that. Yes, or Darby. Just before we get into the further discussion, I think it would be good, especially for the public, to know what in the world this is. Sure. I'll be glad to. Tax increment financing is a method of using a portion of taxes generated from property to pay for public infrastructure related to the redevelopment or development of that property. For example, what you, and it depends on the type of, the tax increment financing mechanisms are called TIFs, tax increment financing. And there are several, as Harold said, there are actually four different types in Kentucky under the new legislation. But the simple example is if you start with a piece of property or you define a development district and you take the property within that development district as a baseline, and that property will produce tax revenue, either ad valorem property taxes, sales taxes, payroll taxes, income taxes, et cetera, that property is generating a baseline level of taxes. You provide an escalator to that so that that baseline tends to, in a model, that baseline would escalate as inflation and time go by. Then you apply a tax base as if the property were developed after development, and you will have an increment between the base and the now actual level of after development taxes. And you take all or a portion of that tax base, that tax increment, and you use that to generally the mechanism is to sell bonds, issue bonds, and to use that increment to debt service the bonds over 30 years for public infrastructure. Public infrastructure in these situations is broadly defined. Thank you very much. Thank you for the interruption, Harold. Go ahead. So, like I said, we were successful this year in getting legislation passed that does allow many cities, Owensboro, Paducah, Kentucky, whatever, to participate in TIFs as well. As Darby indicated, there are ideal situations where you have underutilized or abandoned property that gives you the opportunity to add new life back into those areas. And those public improvements that Darby talked about include everything from parking garages, parks, infrastructure, any type of improvement that will benefit to the area. What you have in front of you is a two-sheet explanation of the program. This is taken from about an inch-and-a-half thick document that was used for the creation of TIFs. One thing I want to tell you is that as we're getting this information, we have been talking to planning, to law department, to finance, so that we can start creating the process of how we'll get this information out to the public, to the planning commission, and finally to you all for approval. So we're in the process of creating what those steps will be, and as that information is finalized, that will be forwarded to you as well. But you can see for the SuperTIF programs, there's basically three areas that work, but the main ones that work for Lexington are the last two, B and C, B in the signature project. And the main difference is that on the signature project, the project has to have value of over $200 million. The example that you have heard about is Louisville with their museum plaza. That's what they consider a signature project because it is a value of over $200 million. So you are talking about a quite extensive value on these projects. So these are very large projects that would be done that would qualify for that type of TIF. The one that really can help Lexington a lot as well is the mixed-use redevelopment blighted urban area. The minimum that project value can be is $20 million, and then it can exceed over $200 million. And they have certain requirements in this type of TIF in which it does have to be a mixed-use, so it's geared toward downtown development. So that means you have to have your 20% of one use, 80% of the other. So 20% of retail, commercial, whatever, 80% of your residential. Once again, there's quite a list of things that do qualify for this cost, and that includes land preparation, demolition as well. So in Louisville, they've been receiving anywhere between 40% to 60% of the value back to the project, so it is quite a bit of a savings to the project. I think it's safe to say that this is still new to all of us. I'm on the phone with Louisville quite a bit to see how they did their projects in the past. Part of the problem, though, is effective this January, the procedure changes, so we'll all be playing on the same rules. So a lot of things that Louisville has been doing in the past, we cannot do, and they will not be able to do. So that's why we're still in the process of gathering the information and understanding how the program will work. But it is a very valuable tool. A lot of states across the country have used this. Chicago, if you go to Chicago, they have many TIF districts. And with Lexington, the way the Kentucky language is done, you can have more than one TIF district, so it doesn't have to be just one area. We can have many of them. So we can have one on the north side, south side, east, whatever. Okay. Did you want to add something else, Darby? If I could, just maybe a little more definition of the TIF. Lexington has always been able to do a TIF, but it has only been able to do a local TIF. In other words, it's only been able to deal with the ad valorem tax component that goes to local government. The difference between what Louisville has been able to do and what Lexington has been able to do is to add the state component to that. That's called, referred to in the vernacular as a super TIF, because it involves not only the state component of the ad valorem taxes, but it also can involve sales tax and state income tax. So all of a sudden we've got some money that can really make a difference. If we were dealing with a local component in previous years, it offered very little bonding support. So it's a new game with that. The mechanism will be that the local government, i.e., urban county government, will have to approve the TIF before it ever goes to Frankfurt. That's part of the new rules that they've learned. So these things, and there may be some coming in the next year, these things will come to you first, to the urban county government first, and council first to approve before they go on to state government. Thank you. Council Member Stennett. Thank you, Chair. You know, we put this into committee about a year ago when we were looking at the urban development incentives to give the developers an incentive to go into these info areas and want to redevelop the area. I was under the impression that the biggest difference between the past law and the new law was our previous law only allowed us to give TIFs on redevelopment of an area, not for vacant land. Is that right? So now we can do both vacant land, which would be a new development, and redevelopment of a building or area? You can do both. Because in a lot of urban areas, you have, you know, ten acres of land. Right. So it can be used on both. Can you all, or Joe, or somebody, develop a piece for developers and for council and make this a little bit easier to understand so that we can get the word out a little bit more so how we can best use this practice rather than waiting on a shriveling plaza or something to come to us and have a book that thick? Make it available for anyone without a lawyer or two to read through. No offense, Darby. No offense. But simply a piece to show here are ways you can save money and what it can be used for and really a meaningful program. I'm trying to get something down to a two- to three-page summary that, you know, kind of like a Cliff Notes version. For now I have to bring Darby and Kim with me to explain. But, yeah, because that is important. It is very – you're talking about three different programs. You've got to decide which program you're going to talk about. You have a different procedure for each one. So we realize it is very confusing. I think that's why we've been kind of slow coming to you all with the information because, like I said, we're still going through the process of finding out how it works. Ned Sheehy up in the 12th floor has been great about getting stuff to us as soon as it is released from Frankfurt so we can start going through it. But, yes, we will have that because this is an important tool that we could all be able to use in terms of our redevelopment. And on the local TIF side, is there a minimum dollar amount for the project before you can apply local TIF? I know in the state it's $10 million for the first one. Right. I don't believe there is on the local side, Kevin. It could be a couple million dollar office building. Yeah, but what you get into with the procedure is you have to have an economic study that will demonstrate the feasibility of the TIF. Those are not inexpensive. Okay. So it's not going to be something that every project, it's going to have to be a serious project and a serious investment to warrant the level of financial commitment that requires to even put it on the table. And this is both residential and commercial projects? Yeah. Thank you. Council Member Maloney. Thank you, Harold. Correct me, you think you are working right now trying to come up with a formula, a point system before we allow these projects to continue? If you get a bunch at one time and you all have an application that for so many points you're going to, if you do retail, so many points you do residential, so many points you do for very low income, how is this going to work? And that's part of the procedure that we're going through because the state releases the information. We have to make sure that everything that the state says has to be done is met within that requirement. So that's what we're in the process of doing right now is going through the information that we're getting from Frankfurt in terms of what the minimum requirements are. That doesn't mean that if we want to at a local level add additional things we can do that, but first we have to make sure we know exactly what the state is requiring from us in terms of information and how the program can work. Has anybody looked at Louisville, how that works? I've been looking at Louisville for four years, but like I said, the problem with the Louisville program is that those rules are coming to an end and there's new rules that will be coming out that we have to start going by effective January. Now those rules change by the state or federal or is that a city? By the state. By the state. Okay. Let me ask you this. Like, for instance, if I put a project like that together and I have 20% retail, 80% residential, and I do put in some low income, do we give more incentives, more tax breaks for those who put low income in these projects than somebody coming in here that gives just totally no low income, just affordable housing? Is there a way they do that now? Go ahead. Yes, there is, but that will be part of the procedure that we'll be working on as the program is developed. Right now, I think it's safe to say the state does not say there's a certain percentage that has to be low income, but there's nothing to say that the city can't add to that. Now, do you have any more of these applications ready to go or none like the one we just recently did on South Broadway? That was not a part of this program. It's not? This is a different program. Different program. Okay. So once we get the policy and procedures in, then you will put an application round out so folks who want to come in? Yes, everybody knows what the rules are. Okay. Thank you. Council Member Beard. Thank you, Chair. Harold, two things. One, kind of expanding a little bit on what Council Member Stinnett was discussing about a simplified, what I might call a marketing piece. Could you develop, because there are three different programs, some type of a matrix that would be easier for those of us uninitiated to understand? Yes, what we're looking at right now that we've started working on is basically a flow chart. So you'll see what the procedure is, who you have to talk to, what your time period is that you have to meet those requirements. After you complete that step, what's next and what's next. So that is something that you can hand to somebody who won't answer all their questions, but they're going to get a pretty good feeling when they leave that they understand what they have to do to meet these requirements. What I'm trying to clean up is for everybody to be able to know which program they're discussing of the three. The second question is, is the Fayette County Public Schools involved in this also, as far as their taxing piece of this action? They can be, but typically the school component in most instances is usually not touched, or if so, very little. That's what I was afraid of. Thank you. Vice Mayor Gray. Harold and Darby, thank you all for all you've worked on this. As we're hearing this conversation, it struck me as perhaps worthwhile that we might be able to invite Craig Greenberg over to talk about Museum Plaza. Craig's really the guy that's been the financial architect for the TIF for Museum Plaza, which is, unless I'm mistaken, the only one that's really gone through. There are two others that John Ferris is working on, but they haven't gone through. That's correct. And just from casual conversation with Craig, he said that he's learned a lot in this first iteration and that he would do things differently if he had to do it over again. But they were already into Museum Plaza, and when the legislation changed and adjusted and so forth, it might be, if it looks like this is really going forward or we have the opportunity for moving it forward, it probably might be worthwhile to invite Craig over to talk about the lessons learned on that project. Sometimes it's nice not being the very first person to do something. That's why it's good to hear what Lobel has experienced. He's a co-developer along with the Browns on that project. Dr. Stevens. Thank you. I would suggest when you do your cliff notes, if you could put a hypothetical example in, because in my experience, usually when you're dealing with taxes and changing them, there are some losers and winners, and it's not always possible to tell really what, and frequently it's the treasury that loses for the governmental entity that's proposing these for the benefit of development and so forth, but that would be very helpful, I think, to people if they can look at an example and see what the dollars are and how they're figured. Thanks. Very good. Do other council members have questions? Harold, let me ask you this. I'm thinking next month planning committee is discussing U.K. housing issues, and it might take our full committee meeting. I'm not sure. We do not have a meeting in December. Would you feel comfortable coming back in January, or is that too late for the committee on both of these issues that you're going to be making progress on? Council members, what do you think? We want to hear progress on the land bank, and you said that you're going to be meeting with folks about the TIF and progressing on that. Right. So would you want to bring them back in January? Sure. Okay. That'd be fine. Okay. Council members, any questions, issues? We'll be discussing U.K. housing issues in November at our meeting, and Dr. Stevens' proposal that he moved into committee. And, Vice Mayor, did you have a question? Well, my only concern would be that I guess in the absence of any significant compelling project where the monetizing of the investment can be demonstrated, then we're not under any time constraint. Is that accurate? For the TIF. For the TIF, yeah. And for the land bank, it's simply a budget. We passed a budget, and we're not making an investment. Is that correct? Well, with the TIF, that's correct. There's nothing on the table yet for you all to consider. It's an education process as well as anything else for you all to understand the program. With regard to the land bank, I think there are two issues. One is the budget issue, and two is just the mechanic of the land bank itself. So you're moving forward with the process development, right, or coming back to the planning committee? Would you prefer, based on what you just said, would you prefer the TIF come back maybe late in the spring? There's no real rush on it, is there? I think the more that what I heard Darby say is the more educated we become, the earlier, the better, because that will encourage the development or encourage developers to look more with more interest at this opportunity. And if you want to, Chairman, I can send you all information as it's developed so that it gives you time to review it so by the meeting you've had the information. Hopefully you have questions. You can call me or whatever, so we can go ahead and keep feeding you information, and then just at that January we're going to do the presentation. Okay, that's a good idea. After all, January is three months away, so that's a little, a quarter of a year. He'll be here before you realize. So if nothing else, thank you all very much for being here, and we really look forward to getting more information on both of these issues. Do I hear a motion to adjourn? Did you have a question, Council Member Stennett? Yes, Chair. One thing I'd like to point out, I know this sometimes gets overlooked in the planning committee because it is called planning, is our social services involvement. I'd like to have a report from them or give them at least the opportunity either at next meeting or the one in January to come just present what's going on in social services as an extenuation to Commissioner Helm if she'd like to come. Okay. I think they often get overlooked in this committee. Okay, just kind of an update. If they want to, yes. If there's anything going on that they would like for our community to know about. I know they're doing a lot of good work with the neighborhood meetings and assessment meetings that are going on. Okay. Well, I'll be happy to ask them. Thank you. Anything else? Do I hear? We have a motion to adjourn. We have several seconds. Thank you very much.