# Budge, Finance and Economic Development Committee - September 21, 2019 > Auto-transcribed civic record · Committee · September 21, 2019 - **Permalink**: https://meetings.lexingtonky.news/meeting/4845 - **Source video**: https://lfucg.granicus.com/player/clip/4845?view_id=14&redirect=true - **Date**: 2019-09-21 - **Body**: Committee - **Last revised**: February 5, 2026 - **Length**: 14,781 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed by OpenAI Whisper-1, with speaker labels folded in from Granicus closed-captioning. 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 Finance Committee held a meeting to review several key municipal projects and financial matters. The meeting focused primarily on informational updates across four main agenda items, with no formal decisions requiring votes on the presented topics. The committee received comprehensive updates on major development initiatives, including the Downtown Project, Winslow Site and Street Redevelopment, and The Met Project. All three project updates were presented for informational purposes, allowing committee members to stay current on the progress and status of these significant municipal investments. Additionally, the committee reviewed a Financial Update to assess the city's current fiscal position. The meeting included 2 motions and votes, though the specific nature of these votes was not related to the main informational agenda items presented. No public comments were received during the meeting, indicating the session was primarily focused on internal committee business and project briefings. The structured agenda allowed the Finance Committee to maintain oversight of major capital projects while staying informed about the municipality's financial health. The informational nature of the primary agenda items suggests this was a routine oversight meeting designed to keep committee members updated on ongoing initiatives rather than a decision-making session requiring extensive deliberation or public input. ## Attendance The following committee members were present at the meeting: • Jennifer Reynolds • Kathy Plowman • Lamb • Evans • Reynolds • Ellinger • Plowman • Brown • Kaye No members were reported as absent or late for this committee meeting. *Note: The attendance record shows some potential duplicate entries (Reynolds/Jennifer Reynolds and Plowman/Kathy Plowman) which may indicate multiple references to the same individuals in the source materials.* ## Votes and Decisions The Committee conducted two votes during this meeting, both decided by voice vote. **Approval of August 27th Committee Summary** The Committee voted to approve the summary from their August 27th meeting. The motion passed by voice vote with no recorded opposition. **Amendment to Add Phil Hollenbeck Presentation** The Committee voted to amend the meeting agenda to include a presentation by Phil Hollenbeck with Community Ventures. This motion also passed by voice vote with no recorded opposition. Both votes were conducted as voice votes rather than formal roll call votes, so individual member positions were not recorded. No specific vote counts, abstentions, or conditions were noted for either motion. *Note: Transcript timestamps were not available in the source materials for these voting actions.* ## Downtown Project Update Tom Harrington from Core Spaces provided an informational presentation regarding downtown development activities, focusing on a significant land swap arrangement with the University of Kentucky and associated campus development plans. **Key Developments Discussed:** • Land swap agreement between Core Spaces and the University of Kentucky • Development of a new hub facility on the UK campus • Integration of a Target store as part of the development project • Addition of residential properties to complement the commercial components Harrington outlined how the land exchange would facilitate the creation of a mixed-use development that combines retail, residential, and campus-oriented services. The proposed Target store represents a major retail anchor for the project, while the residential components are designed to serve both students and community members. The presentation covered the broader impact of this development on the downtown area and its connection to campus life. The hub concept appears designed to create a seamless transition between university facilities and commercial/residential spaces. **Outcome:** This was an informational presentation with no formal action required from the committee. The update served to keep committee members informed about the progress and scope of this significant downtown development project involving the university partnership. *Note: Specific transcript timestamps are not available for this agenda item.* ## Winslow Site and Street Redevelopment Melody Flowers from the University of Kentucky presented information about the Winslow site redevelopment project during the committee meeting. The presentation focused on plans for redeveloping the Winslow site and surrounding street areas. Flowers discussed the project's emphasis on integrating university and city spaces, highlighting how the redevelopment would create better connections between the University of Kentucky campus and the broader community. The presentation outlined the anticipated benefits that the new development would bring to both the university and the city. The agenda item was informational in nature, with Flowers providing an overview of the redevelopment plans and their expected positive impacts on the area. The discussion centered on how the project would enhance the relationship between university facilities and municipal infrastructure in the Winslow area. No specific concerns or debates were noted during this presentation, and the item concluded as an informational briefing for committee members about the ongoing redevelopment efforts. ## The Met Project Update Phil Hollenbeck from Community Ventures presented an update on the MET project, a mixed-use development planned for the East End. The presentation focused on how the project aims to address critical local community needs. The MET project is designed as a mixed-use development that will tackle two primary community challenges in the East End area: the lack of affordable housing options and limited access to healthy food. Hollenbeck outlined how the development would incorporate both residential and commercial components to serve these identified needs. The presentation was informational in nature, providing committee members with an overview of the project's scope and community-focused objectives. The development represents Community Ventures' approach to addressing neighborhood-level issues through strategic mixed-use planning. No specific concerns were raised during the presentation, and no formal action was taken by the committee. The update served to keep committee members informed about the progress and goals of this East End development initiative. ## Financial Update Commissioner Mara and Rusty Cook presented a financial update to the committee, providing an overview of the organization's current fiscal position. The presentation focused on revenue and expense variances, examining how actual financial performance compared to budgeted projections. The speakers highlighted specific factors affecting the organization's revenue streams, particularly noting the impact of current economic conditions. Key economic indicators discussed included the effects of low unemployment rates and inflation on the organization's financial position. These macroeconomic factors were identified as significant influences on revenue generation and overall fiscal health. The financial update served as an informational presentation, providing committee members with current data on the organization's financial status and the external economic factors shaping fiscal performance. No specific action items or decisions resulted from this agenda item, as it was designed to keep committee members informed of ongoing financial conditions and trends. *Note: Specific transcript timestamps are not available for this agenda item.* --- ## Decisions - **Motion** — passed (0-0): Approval of the August 27th Committee Summary - **Motion** — passed (0-0): Amend agenda to add Phil Hollenbeck with Community Ventures --- ## Full transcript Finance Committee. I'm going to recognize Councilmember Jennifer Reynolds and Councilmember Kathy Plowman as members of our Budgeting Committee today, just to recognize them until we have voting members for quorum. And I'm excited about our agenda today. We have three, we have several items, but one of the things we're going to continue to do is to invite our partners in Economic Development to come talk to us about what's actually happening in and around our city. But the first item on our agenda is the approval of the August 27th Committee Summary. Do I have a motion to approve? So moved. Second. First and seconded. Thank you. Any discussion? All in favor? Any opposed? Motion passes. Okay, thank you. The first item is the Downtown Project Update. This is the hub on campus. I'm excited to have Tom Harrington, who's the Executive VP of Acquisitions at Core Spaces, based in Austin and Chicago, joining us today. We've invited them to come talk about the land swap with UK and how that worked, in addition to how UK and the university is kind of molding into some of our downtown spaces all at once. So with that, Mr. Harrington, thank you for joining us. Thank you for having me. I'm happy to be here today, and I'm going to try to be very brief in an introduction, and then I know there's interest in how this came about, and then leave time for conversation. So this first slide is just a little bit about Core Spaces and what we do. We're a nationwide developer, mixed-use. We like infill. We like high-rise, pedestrian-oriented developments. We're largely a student housing developer, but always mixed-use, and we've done some market rate and even are starting to look at some co-living opportunities in different markets. So we're used to infill, fairly complicated infills to put together, and so that kind of lent itself to this. This is a little bit more about Core, some of our brands, and I won't go through all that. We spend a great deal of effort on our architecture and design in each and every building that we do. We don't build cookie cutter, but rather we try to build into the context of the communities that we're in. So the hub at Lexington will look a lot different than the ones in Tucson, for instance, and we're very excited about that and think it's a worthwhile investment for us. I know there's interest in the land swap and how that came about, and so I'll share a little bit with you. That was just the headline in the Herald-Leader here when that transaction became public, and it started really with Target. We had a meeting with Target at their request at their headquarters in Minneapolis. They'd recognized and identified us as a developer that was doing infill projects in locations in which they wanted their small format store to be in, and so we started working on a number of possibilities with them, and then they contacted us and said, would you please go to Lexington? We have a site identified, but it is far too expensive to support a stand-alone small format Target, but we would love to see if we can do something to put this together. With the work they'd started on, we got the Kennedy Bookstore site under contract, and at the same time, actually, the Fazoli's, which was right behind it, and as part of our process in every place, we have a retired executive that was actually the CFO of the Illinois system who reaches out to universities that we go in to get input, let them know what we're doing, and give us valuable information about what the campus's plans are. After which, he called me and said, their CFO, Eric Munday, would like to see if you guys would come meet with them next week, and that's really led to their swapping us the two locations, the 500 Upper and the Limestone in Virginia, for the Kennedy Bookstore site in the Fazoli's, which was apparently a key property in their master planning, and they're, of course, now under construction on that site, and we just delivered and completed the Target and our residential property there. This is a map that shows you the locations, the Kennedy Bookstore site in the middle, the Upper is highest on the map in the orange, and then Limestone in Virginia down at the bottom of the map. This is a letter I thought you might find interesting because it kind of speaks to part of what I think you're looking for, and this was an interesting project that we did in Columbia, South Carolina, where there was an empty 20-story office building adjacent to a Marriott Hotel with common facilities, and attached to a city-owned parking garage. The end of that story was 800 student development with all kinds of concerns from the Marriott is how are those uses going to mix. You're a block and a half from the state capital and a similar distance from City Hall, right on Main Street in downtown, and it was extremely successful. You can read the letter, but the mayor credits it with actually revitalizing the downtown Columbia area, and he'll point out to you that developments that are done right and involve students are actually very good for local retail, because they don't stay inside, they go out and spend money. So I just thought it was a relevant, interesting thing that I think speaks to how the Upper project could begin to connect your downtown and the campus town. One other interesting aside about that, it involved, in that market you absolutely have to have outdoor space, so our outdoor amenities, the sand volleyball and the swimming pool and all that are on top of the city-owned parking that's adjacent under a long-term license agreement. So that was a fairly complicated but interesting partnership. And I think the impact of, I tried to do a little bit to talk about what the impact of the target is and is likely to have, and this article indicates that their small format stores are twice as productive per square foot as their traditional stores. Their traditional stores generate about, I think, $300 per square foot, which would mean that the small formats would be $600 per square foot. And I tried to translate that back, it's 20,000 square feet, so that's going to be about $12 million in sales. I have no data from Target on how this is performing other than, anecdotally, it seems to be doing extremely well. So if you do a little bit of math on that, their average sales transaction is $62, so if you divide that out, you're going to end up with over 500 people a day going through that store, which is going to generate a lot of positive impact on the rest of the area. I think the other piece of it is, we believe that these projects, the right amount of density in the right space, and the right density is different for each community, but when we were getting our approvals, more so on Upper than on Limestone, Limestone was a complete rezoning, and I'll speak a little more about what that project includes, but Upper really involved more variances related to height and parking, and was not really without controversy, particularly, I think, with respect to the height. And at that time, I think we were kind of in the middle of a redoing of your master plan, which was dealing with the conflict between the urban and the rural areas, and not expanding the urban footprint, and part of the conversation was, well, if we want this to happen, then we'll need to promote projects like this. And so that, obviously, was how that turned out, but it was definitely a conversation. In all the markets that we operate in, we spend a great deal of time in the neighborhoods and did many neighborhood meetings and got a lot of input, affected our design for the positive, in this case, and in many others. Obviously, not everybody agreed with the result, but we're proud of and think the result is very good. Beyond all that, I think in the long term, projects like this can, and we've seen this in other cities, take pressure off of neighborhoods that are under pressure for expanding student enrollment without enough housing. And if you can do some of that over a very long term, it can affect, perhaps, affordable housing and certainly preservation of neighborhoods as more non-student type of neighborhoods. So we think that it can have that effect. I think, just a quick word, obviously, Upper is, and I have some additional materials here on each project. This is Upper Street, and I can't read it, but obviously, the target is the retail. It's 20,000 square feet, and the number of units and bedrooms is on there. And then this is some interior of that project. That's the gym on the left, the rooftop pool on the right, more of the rooftop below it. That's a shot of what it looks like. This is Limestone, and it's got retail on the corner. It's a smaller retail footprint, about 5,000 square feet, but we think it'll serve an important purpose. And that's one of the busiest pedestrian intersections I've come across anywhere. I'll probably have the number wrong, but it might be 15,000 or 20,000 people walk by that corner every day. So it was just houses before, and then UK had owned, obviously, that and had torn the houses down, but I think the opportunity for a convenience retail right there will be significant. And again, the statistics on the number of bedrooms and so forth are on that slide. So with that, I've talked enough, I think, so I'd be happy to answer any questions. Just from curiosity, since no one's signed in, I'll ask one. I think it's always interesting to hear from outside developers or those who are investing in our community, the good, the bad, the ugly, challenges, things that we could do better to help make economic development, as you mentioned, is sometimes difficult to do in fill, and we're committed to that. So I just want to speak a little more specifically to how to improve your project, maybe some things we could do better. Yeah, you know, it's, our experience here with the staff was really very good. So it's, I think it's always better to try to get a clearer understanding of what the underlying politics are than maybe sometimes you can get out, because there's always kind of competing interests. So I, anytime we can understand that more going in and then try to address it to the best that we can. We obviously can't address every concern, and we tried a lot through the neighborhood meetings, and I think if, you don't really know, sometimes you get into the political process, I guess, but if we could, if a clearer understanding of where particularly council people and planning commissions stood on certain issues, it would make it, you know, much easier. Now, it's not always, it's not always possible. So, you know, we had several public hearings, the Planning Commission, basically for a development plan on Upper and the variances, and I think that ended up here before your board. And then the other property was a rezone, so they all ended up going through all those processes. There was an awful lot of technical, I thought, things that got on the agenda. There's this whole list of the things that are exceptions that in many places we don't run into that are at a planning commission or a city council level. I forget what you call them. There's just a list of, I forget what they were, but sometimes... Additional uses or... Something... Exceptions or... It seems like some of that could happen administratively, more smoothly, and maybe a little more flexible. Sometimes that's just because the code is so rigid that, you know, it doesn't provide any flexibility to the administrators. But as I indicated, our experience here was good with the city staff we dealt with. Thank you. Vice Mayor Kaye. Thank you. Thank you for the presentation. I just had a question about both of these buildings. The number of units in South Upper, 154, and the number of beds, 492. So these are three or four bedroom suites. How are these set up? And it's roughly the same proportion on a lifestyle. It's probably an average of three, right? Three beds per unit, yes. They are, but we build a more varied mix than many of our competitors. We do average about that number of, and it varies a little bit by market, but we'll have everything from, and I don't recall here exactly, but in general, from micro units, which is like really a 300 square foot studio, to a more standard studio, ones, twos, threes, fours, and some markets five bedrooms. But we want a varied mix because the cheapest and most efficient thing in student housing is a four bedroom unit, but we don't go to there because as the market changes, we want to have a building that can adapt to a broader unit mix. So the typical suite, three or four bedrooms, a kitchen? I'm not sure there's a typical in that regard. That three is an average if everything's from one person, from a single occupancy unit, to a four and five bedroom, so it depends on the number of each. A four bedroom would be most often a four bedroom, four bath, or a four bedroom, two bath, three bedroom, two bath. Bed bath parity is close. I think it's generally in the 80% range. Thank you. Thank you, Chair. Council Member Lamb. Thank you, Chair. Thank you for this presentation. Typically because of my routes in and out of downtown, I haven't frequented down this corridor recently, but I really do appreciate having a better understanding of what is being built there. It was interesting to hear what you were talking about, the beds. So are these two housing units, are they where you have common space and then the bedrooms are all separate? Is that the way that these are structured where you share a common, like I would say TV room and the kitchen, and then each bedroom is a separate room? Yes, obviously, other than the single occupancy, which has one room and a bedroom, but yes, in general that's right. You were saying that the single bedroom, the studio would be about 300 and some square feet. What is the average square feet for a three person? They vary too, but the 300 square feet is what we call a micro. That's very small. That's a Murphy bed sort of arrangement, and that gets you to a better price point for a single occupancy unit. Roughly, I think a one bedroom is more in the 500-ish square foot range, and then probably three is around 1,000, something like that. Two is 700 to 800. I'm just more curious because we have been having conversations about accessory dwelling units, and the square footage of those at the top, the maximum is 800 square foot. There's been lots of conversation about four people living in an 800 square foot space, and so I was curious as to what these units were comparably. Four bedroom would probably be closer to 1,200 or much more. I appreciate it, and I do appreciate. I had a development in my district where we had someone, a company come in from Alabama, and I appreciated getting to work with them and to know what they're capable of doing, and so I do appreciate that you all are willing to come to our town and bring new development. Thank you. We're very happy to be here. Thank you. Thank you, Chair. Thank you. Council Member Evans. Thank you, Chair. Thank you for the presentation. You build the buildings. Do you also manage them? How is the handoff, or is there a handoff to the management, and then when the rubber meets the road, what's the actual cost for these units? I know that will vary. That's a good question. It's actually a very important part of this business. It's integral to the business in the sense that while it's certainly real estate, it's more akin to a, it's real estate related, more like a hotel than like, you know, certainly an office building or even a market rate apartment building. It's management intensive, so we have a whole management office in Austin that we've grown well ahead of our size at every step of the way. We have regional managers, and then we don't build in a market unless we can self-manage on site. We don't do third-party management, and we don't hire third-party management. Then there's a handoff between development and management, right, in July and August, and it's always exciting. It seems like however much time you leave on any project, it always comes down to the end, but we spend a lot of time on that, and so our buildings are highly secured, lots of cameras, FOB entries. Safety's an important part of it, so I don't know if I've answered your question, but... Yes, I think it does, but I guess it will lead to another question, because will you have any, do you have regional offices? I know you said you're headquartered in Austin, but will there be more of a local presence? Each project has a manager on site that's dedicated to that. In this case, there are two. They're both here now, so obviously Upper is open. The manager for Limestone is operating out of the leasing office right now, which is separate, and then they're managed by regional managers who typically travel from Austin. Okay, and then the average cost for units, again, understanding that they'll vary depending on the... The average rent per month? Yes. Didn't look that up before I came here. I should have, but it varies by market. We underwrite not beyond the top of the existing market, so we don't try to go to new territories, so I can get you that, but it's... Well, it'd be comparable to, is the other, to similar... To the higher-end product in the market, it would be comparable. So I, you know, my guess, I won't guess, but you know, nationwide somewhere, you know, in the 800 plus for a four, and some markets are more, some a little bit less. Okay, thank you. Council Member Reynolds. Thank you, Chair. I just thought of one thing. I had the same question, but to add on to that, do you charge per unit or do you charge per room? I know a lot of the housing around UK rents per room, so when you say 800, would that be for the whole unit or per person? It's, call it 800 to 1,000 for a four-bedroom, that's per unit, so what we call purpose-built student housing, which is what this is, is rented by the bed, which actually some people question, but from our perspective, it's actually a better management system than by the unit, because you can deal with, you know, an outlier or someone that's in a four-bedroom, you know, it's really hard to sort of evict the entire unit, if you will, but if you have a, it's individual lease, it's much easier to manage if you have a problem. Thank you very much. Thank you. Thank you very much for your presentation. I think what's fascinating, like in the Columbia situation, we find ourselves with UK, the lines between UK and downtown and our community becoming less and less, in that we see more and more of our students walking down and being part of our downtown and vice versa, and so seeing the impact of that many students involved in mission, I think it's a great thing, and so I appreciate your willingness to be here and to share some of that experience with us. Absolutely, thank you for having me. Next, I want to bring up Melody Flowers. Melody's with the University of Kentucky, and she's going to discuss the Winslow site, the street redevelopment, and again, we'll speak to kind of that merging line between all of us playing well together, so thanks, Melody, for being here. Of course, and first off, thank you all, because I always appreciate the recognition that the university is an active and engaged partner in economic development in our city, and so I was thinking about the things I want to hit on today, and I'll try to hit on three things. One is just the recognition on the university and the current university's leadership of the importance of the place in which our university is located and the importance of that relationship with the city and how that helps us with recruitment, retention, as well as our ongoing role in economic development for the Commonwealth and partnerships on getting our students to remain after graduation, so that's one thing. Two, when I think about the Winslow site, I actually think the story goes all the way back to 2015 and the commercial corridors study. It was a joint planning effort between the city, the downtown Lexington partnership, and the university, and I think the success, including of Tom's project, really starts there, because this was a joint economic planning effort looking at these near campus neighborhoods with this growing recognition that our students don't magically know that, oh, I've stepped off campus now, and this is a city issue, and over here this was a campus issue, so recognizing those blurred lines and wanting to be involved in ensuring that great student experience for our students no matter where they go, and so we looked at Chevy Chase down Euclid all the way to Limestone and then up to Maxwell, and so this kind of triangle area that includes both the core spaces property and Winslow, and so anytime we have the opportunity to be involved in these joint planning efforts, I see a ton of benefit. We rely on that commercial corridor study a lot, and I think it kind of speaks to this segues nicely to the land swap, because one of the things that we talk about a lot in these joint planning efforts are what's in whose toolbox, and what can the city bring to the table, what can the university bring to the table, and so we talk about what the university has. We have land, brand, and demand. So on these land swaps, we have been actively using our land portion of what we can do over the last several years to promote economic development as well as enhancing the student experience on campus, and I guess my two cents on the land swap that has given us both the hub development on the former Jersey Street parking lot as well as the Winslow development is from the university's perspective, we were looking at developing that Jersey lot where the hub now is, and through some coincidence of timing, CORE got the option on the Kennedy's and Fusoli sites, which we saw as a critical gateway to campus, and through executing the land swap, we kind of saw it as a two-for-one where both sites were to get developed in a way that was going to be beneficial both to the campus community as well as to downtown. So that was a great opportunity in our eyes to have all of this positive development, including the great ground floor target development, which offers a pedestrian friendly option for our students to get to needed retail instead of always having to jump in their cars. So another hat I wear at the university is transportation, so anything that enhances that pedestrian and bike experience for our students and offering that amenity is great from our perspective. And so then the third thing that I wanted to hit on, and then you all can ask me any questions you want, is when it comes to the Winslow project, just to recap a little bit, refresh your memory from things you may have read in the paper already about this, and really focus on what we see as a lot of the public benefit that's coming out of this development that the university's heading up. So as you can see on the map there, it's on Limestone, Winslow, and Upper, connected to our existing, they call it either PS5 or the Limestone parking garage there. Right across the street from our brand new gorgeous student center, really is an emerging gateway to campus. It is our northernmost tip of engaging downtown. I walked downtown today from my office, it's like a 10 minute walk for me to get down here, so it's very close for our students to be engaged. I guess timing real quick, one of the reasons, so we're doing this through a public-private partnership, and there's a few reasons for that, but one that this slide speaks to is timing. So the development itself, what we're putting there is, this was instigated out of our transportation services department because of the need to expand parking capacity on campus. While we are being as creative as we possibly can to promote transportation alternatives, and biking, and walking, and cash out, and bike vouchers, and bus routes, and the partnership with LexTran, and on and on and on, you can't get away from the fact that we still need parking on campus. And so fundamentally this is an expansion of the parking structure, it's going to be 918 net new parking spaces right on that area of campus, which is awesome, but the really exciting part of it is that on the ground floor is going to be 23,000 square feet of allocable space that's going to be a mix of private retail and university-controlled innovation and eSports space. So Sherman Carter Barnhart is the architect that our development partner, Signet, chose, luckily they know our campus very well. So a few of the things that I'll hit on quickly because I don't want to speak too much, but when we think of the public benefit of this, because it's a UK project, you can see the wide sidewalks and hardscaped pedestrian streetscape that we're investing in, outdoor seating, so the idea that we're looking at is the retail would be oriented along the limestone side, which is where, I don't know how to point it out, but then the long side is Winslow and you would have UK space going down that way. When going back to that commercial corridors project I noted, in that study four years ago, they called this intersection of limestone and Winslow, Money Corner. And the great thing about that is three years later, four years later, when we were going to the market to select a partner to build a parking garage, it was already a foregone conclusion in the minds of UK leadership that you had to do something more exciting on the ground floor. You couldn't just build a parking garage there. You couldn't lose the opportunity of that very important piece of real estate. So it was through conversations with our developer that we actually gravitated towards this idea of innovation space on the ground floor and it is a, I've started referring to it as the front porch of our campus to downtown, a place where through programming initiatives, we very much intend to be inviting the community in, focusing on economic development, entrepreneurship, design thinking, solution finding efforts. It's multidisciplinary, community engaged. We've talked to a lot of community partners already. So I think it's going to be an exciting space for both our students, faculty and staff, as well as community partners. For those of you who like infrastructure, we're burying the utility lines. It's just going to be a lot prettier. It's not cheap, but it's worth it to us to do that. Because we are supporting retail on the ground floor and because we're going to actively mix the users in the garage, that entire, it'll be about 2,300 total parking spaces, is going to become a 24-7 garage. It is available for public visitor parking. And so we think, especially nights and weekends, it'll probably help the retail in the area have a place to park. What else have we talked about? The sidewalk and streetscape improvements, utilities. I think it's a very exciting project. I tend to get really excited every time I talk about it. So hopefully it is going to come to fruition. We are looking at an August 1, 2020 delivery date, which is a very aggressive timetable. And as of today, we are on time and on budget, which is not something you always get to say. So with that, I would be happy to take any questions you have. Thank you so much for your presentation. We'll start with Councilmember Ellinger. Thank you, Chair. Thank you for giving this presentation. Is that the northeast corner that I'm looking at? Would that be Limestone and Winslow? Yes, that is the northeast, yes. Okay. Excuse me. So I live on Nichols Field Road, so I go down Limestone when I leave here. There is an issue at times of people getting out in that parking garage. Is there going to be now two of them that they're going to have to come out? Are they both entering onto Limestone? So the expanded parking garage will utilize all of the same existing entrances and exits that it has today in the same ramping system. There's a few things that we're doing to manage the parking garage, because you're exactly right. If it's full of nine to five employees who are all trying to get out at the same time, it can create a bit of a backup. So one thing we're doing is we're mixing the user group. There will be resident students in there, there will be commuter students in there, as well as employees and visitors, so that you can have a population of people who aren't all coming and going at the same time. Another one of the public infrastructure improvements that we're funding through this project that will help is on the south upper side. We are investing in adding a traffic light at the intersection of Bolivar and south upper to assist in the outflow of traffic from the garage on that side. It will also allow us to put in an enhanced pedestrian crossing, which is very important, because as you may know, down Bolivar is our school of art and visual studies. And this is all situated on this northwest corner of our campus, what we've started referring to as this emerging innovation district on campus. And so I think enhancing all of that transportation, that multimodal transportation infrastructure there, it is the aim to better manage the flow of that garage. When you say the enhanced pedestrian, what do you mean by that? There's currently no pedestrian crosswalk. Oh, I know, because I go by there and it's crazy. We've been working with traffic engineering and we have designing a light, a traffic light, which will allow you to put a pedestrian crossing there. Okay. Thank you so much. Thank you. Council Member Plowman. Thank you, Chair, and thank you for the update. It sounds pretty exciting. I had a question. When you mentioned the students that graduate, they leave the University of Kentucky, how many, do you have a study on how many actually stay in Lexington area? That's a great question. I don't have the data, the numbers at the tip of my mind. Generally what you can look at is tax data, tax roll data, five years out and see the percentage of students who are around. And so there are sources out there to track the data, but I don't have the number off the top of my head. Sorry. Is your gut kind of that they're more than they were? Well, the last time I looked at this was just a few years ago when we were looking at not necessarily Lexington and Fayette County, but statewide, our students who stay in the Commonwealth, because you can look at state tax roll data. But we actually did pretty good at retaining not only our resident students, but our non-resident students. Because there's so much more here. I mean, it just seems like, you know, things are happening not just downtown, but all over. I was also curious, the transportation for the students and the faculty, can you elaborate a little bit? Did they all have access to buses to Lexington? I mean, it doesn't cost the students or the faculty to take the bus. Absolutely. So also about four years ago, the university created its first ever transportation master plan. And one of the things, we kind of think of a supply-demand curve. We kind of developed a two-pronged strategy of decreasing demand by investing in transportation alternatives, as well as increasing the supply of parking to try to get to that equilibrium on campus. And one of the strategies was around buses and a partnership with LexTran that we just, we signed initially a one-year MOA, then a three-year, and we just signed another three-year extension of our partnership with LexTran. And one of the elements of that is what we call Blue Pass. So this is a lump sum that the university pays for this service. And by showing your ID, your wildcard ID, which all student, faculty, and staff has, you can ride any LexTran bus anywhere in the city, anytime, for free, by showing your pass. And we track ridership using Blue Pass. And in the four years since it's been around, between Blue Pass and the on-campus circulator that LexTran operates for us, we are well over five million rides on the bus. So it's a pretty successful program. Yeah. Let me ask a question. This might just be expense-driven. Parking going down instead of going up, is that just an expense? In other words, if the parking garage went underground, is that just totally... We have looked at that option. It's very expensive. As a rule of thumb, these aren't exact, and there's a lot of construction things that can change it, whether it's surface water retention issues, site issues, but generally, rule of thumb, a surface lot... When we build a surface parking spot, granted, we already own the land, we spend between $5,000 to $8,000 on average to build a surface parking lot. Sounds pretty expensive. On average, an above-ground structured parking spot is more like $25,000 to $30,000, and if you go underground, it only goes up from there. So the more I can pay people to not park on campus or give them a voucher to ride a bike or ride the bus, I would much rather do that than build more parking. But like I said, it's finding that equilibrium point of dampening demand as well as meeting the supply need. Okay. Great. Thank you. Thank you, Chair. Council Member Lamb. Thank you, Chair. Thanks for this presentation. I mean, I love the architecture, and of course, I'm paying attention to the facade of this building and then looking at the capture of the picture at the top, so that means there's going to be technology in the envelope? Well, I assume what you're looking at is the corner there of Limestone and Winslow, which is a media mesh wall. It's an exterior digital signage that we will control. The university will control the content. You can see we're giving examples of promoting the university's brand. It could be the kind of thing where on our sea blue U orientation, you could welcome specific groups to campus. So it's just an opportunity to kind of enhance the visual effect of what's going on there. You could say there's a great TEDxUK event happening in the innovation space. You could advertise it on that media mesh wall. Oh, wow. Well, that's pretty cool. So then you have the brick space, and then you have the gray and the darker and it looks like the glass that are coming down off of the corner. Are those, is that facade going to be, is it going to be active as well, or is it just multidimensional? It is, so the, explicitly one of the things that we asked for was that we pick up the existing architecture of parking structure five because it is an extension of that building. Also, we have, the university has said this is our most urban tip of campus. This isn't like designing a building in the heart of campus that's all brick and limestone. It can be a little more urban in its feel and vibe, so I think that's what you're seeing here and what we're doing. You may be aware that we also, the blue light program on campus when we try to light up campus to recognize special events happening. Also, just congratulations to the folks working downtown for the lighting of buildings downtown. I think it looks great on places where it's been done, and so we are investigating LED lighting options to complement that kind of work happening downtown. So, yes, we imagine this, I should say, we imagine this innovation e-sports and retail space to be highly active. I hope we'll get there, but we keep saying 18 plus hour a day activity through active programming of that space. We want it to be alive and be welcoming and be a place where students find something to do. So, yes, the vision is that we are crafting a very active, lit, safe, welcoming place for students as well as a community. Well, definitely, I picked up on that, and I know that the new Shriners building is really unique and the exterior of it as well, and so I applaud you all for thinking outside of the box and bringing in new dimensions of exteriors and making our community more fun and unique. So, thank you so much. Thanks. Thank you, Council Member Evans. Thank you, Chair. Thank you for this presentation. I am just curious, since we've, well, there's been an attempt at, I guess, mixed use before with retail at the bottom, you know, well, on ground level before that hasn't seemed to do very well, or it's just kind of starting to flourish in the last, I don't know how many years. But I'm curious if you have some ideas about the kind of retail that you want there, because it seems it's still going to have to be very student specific or cater to students. So, I'm wondering if you all have done any research or have any ideas to make sure that it can be filled quickly and remains occupied. That is a great question. I do not have any announcements to make today about tenants for that ground floor, but I will say this, it's not our core competency to be a retail leaser. So, one of the things that we've done in our development partnership is, so, Signet is the development company that's the private partner. They have signed on as part of our arrangement to remain responsible for the leasing of that retail space and the management of that retail space for the full term of the financing of the building. So, that's for 30 years. So, they have signed on to a long term partnership with us to be responsible for leasing up that space. They have partnered with a local firm to kind of be their day-to-day boots on the ground. We are out talking to a lot of folks. Definitely food and beverage as well as other kind of retail amenities that we imagine going in there. So, my point is we're bringing in the professionals who know the business. Okay. Well, and you mentioned that they'll still be working with local individuals. I guess my concern is that I'm presuming they would still be, that they're not contacting the same people that have been here, that we still end up having vacant space. Since we're trying to be more innovative, I would ask that people be really innovative and try and do some additional research and try and figure out what will really stay there. I mean, if it's food, it's food. That's great. But, again, it just seems to be that it's just we've tried it before, and I don't mean to be the down person, but we've tried it. They go vacant. Let's try it again. And just let's try and be a little more innovative this time. I 100% hear you and agree. And back to earlier, what does the university have in its toolbox that it brings? Land, brand, and demand. One of the things, so sometimes when our partner is talking to potential retail tenants, they'll bring the university along to talk up what the university is doing. One of the things that we've heard from a handful of potential tenants who are considering going in this space is what they're really interested in is the fact that they would be co-located in a space with some very innovative University of Kentucky activity. They are going to have immediate access to students, faculty, and staff have said, well, in addition to being here and running my business, what I'm interested in is joint programming. So I think we are attempting to leverage the unique aspects of this development to make it different and make it special, because you're exactly right. The last thing we want is vacant ground floor space on this location. You're right. Thank you. I just have one last question. You mentioned P3 and why the university chose to go that route. We've talked often about the pros and cons of P3s and what they do as a city municipality. Can you speak to briefly why you went that route and what it benefits the university? So in this case, there's a few reasons. One of the big ones is speed of the development, their ability. They signed on without hesitation to get this development up and running by August 1 of 2020. And we are on track to do that, which, like I said, is a very aggressive timetable. They were also great partners with us in going to the market and finding the most affordable access to capital that we could. They were very creative partners with us in figuring out how to map this out. Also, because we knew we wanted to do retail, and like I said earlier, that really isn't a core competency of the university, but we knew we wanted it. We wanted a private partner who was going to help us do that right. So there was several reasons why it made sense on this project. Thank you very much. I hope you know that we value UK as a university, certainly as an economic partner for our own sustainability in a variety of areas, not just retail and commercial, but the students and their long-term desire to stay here. So thank you for coming and sharing with us your updates. We did have a small miscommunication. So if I can make a motion to amend our agenda to add Phil Hollenbeck with Community Ventures now. He was supposed to be on the agenda. We did not place him on the agenda. But he is here. So if I could make a motion or have someone make a motion to add him to the agenda, I would appreciate it. So moved. Thank you. Second? Second. All in favor? Aye. Thank you. With that, I'd like to invite our last economic development partner update from Phil to talk about the Met with Community Ventures. Thanks, Phil. That's the easiest vote I've ever had with this group. Thank you for having me. My name is Phil Hollenbeck. As you guys know, I'm a private sector infill downtown development. Our projects have included Main and Rose, Nunn Building Lofts. We've done the Carsons Building and finished out the 500s on Main for another developer. Before I get into my presentation, I just want to say how absolutely incredible those last two presentations are. Everything that we have pushed for from an urban planning standpoint for years is happening before our eyes. That isn't a standalone parking garage. It's a parking garage that's wrapped with retail. It's focused on pedestrian friendliness and everything. The convenience-oriented retail target is so great for everything else we're trying to do, of bringing households downtown and having those conveniences. So it's just some of the more exciting things I've seen in 20 years here. And that's not why I'm here today, but I wanted to give them a pitch. I am here today to speak for one of our development clients, which is a nonprofit in town, Community Ventures. They are developing a project called the MET. It stands for Midland and East Third, which is the location of the building in the east end of Lexington. A quick overview on Community Ventures. They've been around since 1982. Their goal is to improve quality of life for Kentucky's neighborhoods. They're a statewide organization. There's really three ways they do it. That's via increased home ownership, increased business ownership, educational courses and financing and so on. The stats are unbelievable. They've helped over 2,000 families avoid foreclosure, created nearly 10,000 jobs through the years. Unlike some of the for-profit projects you just heard about, Community Ventures has spent 15 years acquiring the land for this project. It was a long-time investment in the east end. What are some of the challenges that the east end has been facing? Extreme poverty, the household income is around $9,000. That's less than 25 percent of the county and state median incomes. I mean, unbelievable, $9,000 a year. High unemployment, one of the census tracts has about 16 percent unemployment. The auto ownership is only 30 percent. That's the lowest in Lexington. That's really an important point when you realize that this neighborhood doesn't have the retail services that are needed, but the residents don't have the ability to drive elsewhere, whereas we may pay, and I'm making these numbers up, but $3 for a gallon of milk. Residents in the east end with limited incomes might pay $6. And there's been a lack of jobs historically in the east end. Additionally, the population in the east end has declined 69 percent, if you can believe it, since 1980 over a 40-year period, not increased density, decreased. It's a food desert. This is an area that doesn't have access to healthy and affordable food, and it's also medically underserved. A lot of this is from the east end small area plan, which was done years ago when Anthony Wright was economic development director. We took the results of that east end small area plan to come up with the concept for the MET and what's going to go into it. So keep those needs in mind. When you think about the east end's history, it was not just A, but maybe the thriving African-American neighborhood in the country, one of a handful of the most thriving African-American neighborhoods. It not only had Lexington's oldest racetrack, but it was home to attorneys and physicians and all sorts of successful professionals. So based on all of that, Community Ventures said, okay, what are our objectives for this new building? One, we want to build a stronger east end neighborhood. That by far was number one, and you can see what that meant. The support points for that objective were access to healthy food, jobs, and convenience-oriented retail. We wanted to increase the housing opportunities for the neighborhood, both affordable and market-rate housing opportunities, and then improve the gateway, and it's turned into this amazing public-private partnership. It's not just going to be an on-street bike path, as you know, that goes up and down Midland, which often is blocked by trucks and delivery trucks and so on, but actually an off-street bike path that will go adjacent to this site, tie into the Isaac Murphy Memorial Art Garden, and then connect to the Legacy Trail, which is obviously near and dear to my heart. So as far as the Met, I'll get into the pictures for you in a second, but most importantly, let's talk about the site. This is a gateway to not just the east end, but also downtown Lexington. It really is a bridge site, and if you think about the demographics of downtown Lexington relative to the demographics of the east end, it is two opposite ends of the spectrum right now in terms of income and everything. This really is a bridge site. So socially, economically, it is absolutely critical. Not only is it going to help the east end, but it's a commercially viable site. There's like 36,000 cars a day, over 25,000 that go up and down Midland Avenue, plus 10,000 or so that go down 3rd Street. So we will have success, in my opinion, in attracting retailers as well. It's a highly visible site. And one of the things that's critical is we have faced this building on 3rd Street, not on Midland. We would get much higher rents if the front of this building faced Midland. But 3rd Street was the retail corridor for the east end. And guess what we did as a city? So as you leave town, you are forced to go out Winchester Road. You cannot spend a dollar on 3rd Street if you want to because you can't get there. This project will start to help that with some of the traffic patterns and bringing the retail onto the beginning of 3rd Street, and we think it will start to pull people further down 3rd Street. So it's a critically important project, not just for the project itself, but for the halo effect that it will have, much like Target is having for the rest of downtown. So the building itself, it's 76,000 square feet. It's a three-story building. If you were to drive by there right now, you would see the steel going up. The first two stories are up. The first floor is retail and office space, and then there's two stories of residential above that, 44 units. The existing building that we're all familiar with at the hard corner of Winchester 3rd and Midland is remaining, and then this building will not attach to it, but it will be adjacent to it. One of the things that's really neat is this retail floor plate is 17,000 square feet, and it's also a small-sized building. So even though we're adding retail and office to our urban core, it has a niche that a lot of our buildings don't have, and this isn't disparaging to any of our existing buildings, but a lot of our taller buildings have smaller floor plates and a lot of square footage. When we try to recruit office users to those buildings, sometimes the user is split between two floors if they're a larger tenant, or if they're a mid-sized user, they sort of have anonymity within that building. Not everyone can have their logo on the big blue building. What's nice about a smaller building like this is a mid-sized user will still have all sorts of signage possibilities. Blade signage on the 3rd Street side. Blade signage, as you know, is perpendicular to the wall of the building so you can see it from a car, and then monument signage up and down Midland Avenue as well. So it eliminates that anonymity. We also have surface parking. We like to put in parking garages whenever we can, but as Melody Flowers mentioned, $25,000 to $30,000 space for above-ground parking and underground parking in our experience has been closer to $50,000 a space. So when you think about the dollars that can add to a residential unit, if you consider one to two spaces per unit, suddenly any affordable housing typically goes out the window. So we are doing surface parking. We have 135 parking spaces on the site, and we're able to make the revenues and rents on the commercial and residential sides more affordable. Here's what's going in that first floor. We had a grocery store. We lost them. We are in negotiations with a second grocery store. Keep in mind a Kroger might take 40,000, 50,000, 60,000 square feet. A Super Kroger might take 100,000 square feet. This is like a 10,000 square foot grocery, but it will provide access to affordable food. Deviate Kitchen, Rob Perez, you all know his story, is taking 4,000 square feet for a location in the first floor of the existing building. I think everyone knows his passion for hiring from the neighborhood in which he operates and has had national recognition. Not only is he putting a restaurant there, but he also is putting a wholesale bakery there to serve his other restaurants. So it will create jobs for the neighborhood. We're working with a health service facility, who I can't name at this time, but that was one of the three expressed needs of the East End Small Area Plan. And then the residential, there's 44 units. Thirty-eight of them are one bedrooms, six are two bedrooms. None of them are three bedrooms. As we do infill projects, we always focus on one and two bedrooms. Very seldom is there a need for three-bedroom apartments in an infill area. That's for macro-national reasons. Typically when you have children in a larger family, you're either in a home in an infill area or you're in a suburban area. Seventy percent of those, or 31 of the units, are market rate. Thirty percent are affordable housing. We've been working with the Affordable Housing Trust Fund. I believe that we're asking for $200,000. I believe the board just voted against that within the last few days. We're going to appeal that through whatever process we can, but we are committed to having 30 percent of these units be affordable. If your question is why, why not 40 percent or 45 percent? Nationally, all the data shows that the break point to have a mix of affordable and market rate is 30 percent to make the market rate housing viable. You don't go above 30 percent on the affordable side. So the impact, which I know is what you guys are looking for, $22 million investment on the site. There's over 130 parking spaces. There has been a need for parking in the East End. As you know, we struggled to find a path for the Legacy Trail. We couldn't put it down Third Street because there was so limited off-street parking on Third Street, so we've made sure to address off-street parking. New jobs, access to healthy food and medical needs. We think that not just the quality but quantity of housing is changing for the East End. And one of the most exciting things that Kevin Smith, the CEO of Community Ventures, is dedicated to is celebrating the history of the East End. So this may be through a verbal display, public art in a sculpture, maybe quotes from historic East End residents that are etched into the sidewalks of the project. So it's really neat. He's got a committee of local artists and residents who are working on this. We broke ground in May. As I mentioned, you can drive by and see the project going up now. The completion date is set for Derby Week, May of 2020. I look forward to sleeping after that. As Melody alluded to, it's crazy pressure when you're trying to hit those dates. To give you a quick overview, here's the site plan. Going vertically on the right-hand side is Third Street, and you can see that all of the retail faces Third Street, as I mentioned. Midland Avenue is the diagonal, and then Lewis Street at the top of that is the street that separates our site from the Charles Young Center. And you can see the parking. One of the reasons this project was really difficult to design is one of the things the neighborhood asked for was to have no back door. So we tried to design it almost as a three-sided building. Here's a rendering on Third Street looking on the left side to the existing building and Winchester Road looking to the right side down Lewis. You can see the building has a 45-degree angle right there. The upper floors of that elevation are some of our two-story units. The first floor is the entry to what will hopefully be a grocery. Everything has really been thought out on this, even the 45-degree angles versus 90-degree angles, as Derek Paulson would talk about, safety by design. We want residents to feel comfortable turning the corner and going down Lewis Street, and having sight lines from a more busy Third Street corridor is really key for that. Here's a rendering of the building from up above. This is if you were at the rock quarry looking across Midland. You can see the existing building and the new building. It gives you a sense of scale there. And another rendering from the bottom of Charles Young Park. I'm going to skip the floor plans, but we've got a variety, probably five different floor plans that make up these 44 units. And then the commercial floor plans are here. There are eight different suites that make up that 32,000 square feet. They could be combined to anywhere from 1,500 to 15,000 square feet. So that's the presentation. And thanks for having me, and happy to answer any questions. Thank you so much for your presentation, Phil. I'll start with Councilmember Reynolds. Thank you so much, Chair. Thank you for your presentation. I actually lived on Third Street very close to there for several years, so the East End is something that I care about a lot, and I appreciate your all's work on this project. What would you say, do you know what the market rate is for the apartments that you're going to rent at the market rate? Yep, so the market rate apartments will be similar to what you'd see at Main and Rose or other downtown projects, and that's really a function of the construction costs that go into, like, a steel and concrete building like this. A one-bedroom might be in the $950 range, and a two-bedroom will be in the $1,400 range. The square footages, I was really interested and impressed to hear what they were talking about at the Hub or by campus. Our one-bedrooms are about 750 square feet, which was considered very small when we did Main and Rose. As now, product continues to shrink, so now when we hear about 300 square foot studios and 500 square foot one-bedrooms, these have suddenly become slightly larger one-bedrooms, and our two-bedrooms would be around 1,250 square feet. The affordable units is going to be a function of, and this isn't a pitch for the housing fund dollars, but for the housing fund dollars and whatever other public sector funds we're able to get, and maybe $500 a month less than those prices that I mentioned to you. Will that be income-based? The affordable housing trust fund money, I think, was 80% of median income was required. The project also has used new market tax credits, and the new market tax credits come with a bunch of restrictions. For example, community ventures can't sell this real estate for up to seven years, but we have committed to those tax credit investors that 13 of those units will be affordable housing. So regardless of which pot of money we get, there's a commitment that those are not going to switch to market rate. Okay, yeah, I would say knowing the area, even what I could afford when I was in that time in my life, I wouldn't be able to afford the market rate. So I hope that it doesn't price too many people out of the neighborhood and that people are able to rent there and shop there. You're exactly right, and if you were to hear Kevin Smith speak about gentrification, his passion for affordable housing, I think the vice mayor would back me up on this. That is something that just he wears on his sleeve. And so trying to find that right mix is not a math equation. It really is as much art as it is science or whatever they say, and it's not all or nothing. where we have quality housing at an affordable price for as many residents as we can is key. And so they're committed to that. Thank you. Thank you so much. Council Member Plowman. Thank you, Chair. Phil, thanks for all the work you're doing on infill and redevelopment. One of the questions I had here, you're talking about naming rights available for small and mid-sized businesses. What do you mean by that? So we've approached Kroger Field. Buildings are going to be there? No. Simply not naming rights as in a sponsorship like a sports stadium, rather a tenant having the ability to have their name on the building. So Dean Dorton, for example, might be in the blue building, but their name isn't on the building, versus someone who's in a smaller project like Main and Rose. When you go down Main Street, you will see all of our tenants' names on the building. I was just reading that. Naming rights for buildings, okay. No, but it's not a sponsorship. And then also on the corner there of Midland and Third, you've got the Community Ventures building. Yep. What's going to happen to that? Is that going to remain the same? The building is remaining substantially the same. It will be repurposed. So the function is going to be, okay. Yep. So the first floor will be Rob Perez and his DV8 kitchen. We are adding a 1,500-square-foot addition to that that's along Third Street between the existing and new buildings. That's where his wholesale kitchen will go. His restaurant will be inside on that first floor and about 4,000 square feet. And then the second floor will be offices. That's great. That's a nice-looking building. That's cool. I always wonder when I go by that rock quarry, what's going to happen to that rock quarry? I think we would all like to know. Such an eyesore, I guess, you know. I think they have been approached by development-minded individuals through the years, and no one has been able to pull a deal together quite yet. Okay, because it's a key area there. And I was just going to mention on the cultural history, I was involved in the Living Arts and Science Center, a capital campaign, and William Kincaid owned that house, and he was an abolitionist. And when he released his slaves, he built a lot of those houses around there for them. And I always thought that was such a cool story because it was such a vibrant area. And it was just interesting to delve into that history. Well, it's a great story, and it's great to hear about him. I will give a shout-out to Ms. Yvonne Giles, who is a longtime East End resident. Oh, yeah, she would know. Helping to lead this charge. Members, Frank X. Walker is involved. The new head of the Lyric Theater is involved. So we've got a really good team of people who are very well-versed in that history, who are involved with this. Yeah, because I don't think we need to forget that. All right, Phil, thanks for all your good work. Thank you, Chair. Thank you. Council Member Millan. Thank you, Chair. Thanks for this presentation. I actually drove by this a couple of weekends ago, and I obviously have been lost in something, an abyss, because I didn't know exactly what it was and what was going on. So I really appreciate this update. Glad to know that you're keeping the building that was there. I know that it had a purpose in this community for a lot of meeting space, which I thought brought a lot of people together, and that's very valued, too. So you were talking about the 30% affordable housing. Does any of that, or do you even know if that includes some two-bedroom, since there's only six two-bedroom, or is it going to just be anticipated the one-bedroom? Do you know that? So to answer your question, it's a great question. The appropriate way, in our opinion, to have both affordable and market-rate housing is not to designate specific units as affordable housing. We don't want to say Unit 203 will always be an affordable unit. So the answer is yes. Those affordable units will shift around the project through the years, and if we're at a point where we have 12 affordable-rate renters, or 13, and somebody moves out, they move out of a two-bedroom, we'll look to put an affordable unit in that two-bedroom. Okay. That's good. That's good because it gives diversity to that. And I'm pleased about the parking, too. I think, what was it, 140? 130 spaces, yes, ma'am. That's wonderful, too, because that will help to allow people to access the legacy trail as well. And so this is exciting. I mean, I have said this here lately. I mean, Lexington has so much going on. We have so many moving parts right now, and I so appreciate every single person that's involved in every aspect of it because it takes a lot of people to make it move and to see it happen and to be a win-win situation. So thank you for your commitment to our community. So thanks. Thanks, Chair. Thank you. It's so much fun to be involved right now and to live in this town, and it really is not just private sector. It is public sector, and we've talked about 10 years ago, it felt like we were pushing that rock uphill, and it took so much energy just to get momentum for certain concepts, and now we are chasing that rock, and this town is like Lexington is shooting up the national rankings, and our town is changing for the better before our eyes, and it's just such an exciting time to be here. So thanks for your nice comments. Council Member Evans. It never wants to come on the first time. Thank you, Chair, and thank you, Phil, for this presentation. We weren't expecting it. But, yeah, first of all, my condolences. I know you've had the death, so I'm sorry for that. But my first question was about what you'd mentioned that you'd kind of taken a survey about the entrance. The entrance is going to be on 3rd Street. I got a little confused. The entrance to the project? Yes. So access to the parking will be from Midland Avenue and from Lewis Street. Right. And it's critically important to have access from both directions, one so that we're servicing drive-by traffic and the other so that we're servicing the neighborhood. One of the key things for that Lewis Street access, if you are coming down 3rd Street towards Winchester Road, we will have a giant mural that says parking, with some art from an East End resident. And the reason that's important is if you miss Lewis Street, you can't turn right onto Midland Avenue and you're out another few blocks until you can turn around. So access to the parking will be from both of those sites. What you may have heard me speak to earlier was the importance of 3rd Street as a retail corridor, and through years we as a community just had made it difficult to get to 3rd Street via car to spend your dollars. Now we've got access via Shropshire, and we will have access into this parking lot as well for inbound or outbound traffic on Midland. Okay. So there will be multiple entrances, I guess. There is. So, yes, I think this project is helping to solve the maybe mistakes of a couple of decades ago. Okay. And I guess actual entrances for people to enter the building. Okay. I just got a little confused. Oh, and so that's a good point. So as far as pedestrian entrances go, the retail will not be like an inward-focused mall retail. It will be all independent bays, just like Main and Rose or whatnot. So you will enter the retail from 3rd Street. Okay. That's from 3rd Street. Okay. And then also, I wish I could blow this up, but a lot of those suites sort of have two fronts. So if you were to park in the surface lot, you could enter them from that side as well. Okay, that's what those are. Okay. That's what I was trying to figure out. Okay. And so, yeah, I've been very intrigued by the project. I would say, given the history of the neighborhood, I'm curious to know how far the conversations went when we're talking about partners, when we're talking about, you know, the food desert. The grocery store is not going to be there. But I think it would have been absolutely wonderful if we could have started bringing back. If there could be, I guess, the main retailer, the first one could have been perhaps of African-American descent. Yep. And what happened with that, if that was an issue, and where is that still a focus? Because that is the history of that neighborhood. That's a marker that was created, I think it was maybe two years ago, at Roots & Heritage. Because you're right, that was the professional area for the African-American community. And if you haven't heard it already, I'm sure you're going to hear about it, that really the first business that goes up there is not someone of African-American descent, or the first one in a project like this. So is there or will there be ongoing efforts to encourage that? It's a great question, a great point, and I'll address that, and I think we're on the same page. Community Ventures is. . . And they don't necessarily have to be local. I will throw that in there because I know that's a stretch. But there are national franchises as well. Well, that's exactly right. And so Community Ventures is committed to minority inclusion whenever possible. My dear friend Ed Holmes is involved not just as a civil engineer, but also has been really engaged in some of the community conversations as well. And so one of the things we've tried to do is have as much minority inclusion on the construction side as possible. And so finding local minority-owned firms that are of a size to be engaged is difficult. So the GC is even looking to chunk into smaller chunks, different portions, painting and so on when needed. To your longer-term point about tenants in the building, we have 32,000 square feet of retail. We do not have by any means anywhere near all of that leased yet. One of our tenants, the lease is not yet signed, but is an African-American female-owned business, a hair salon. I didn't mention her simply because it was not one of the three express needs of the neighborhood. But she is taking . . . Oh, it's a need. I promise you. It's a need. And so she's taking 1,700 square feet. I think she is . . . her current rents are so far different from what would be in this building, that Community Ventures is the perfect landlord because of the kind of financial counseling and advice that they provide. But, yes, African-American female owner of a hair salon is one of the tenants. Yes, ma'am. Vice Mayor Kaye. Thank you, Chair. Thank you, Phil. My question is . . . this is kind of after the fact because you're already building. So there's no opportunity, as I would understand it, to modify the plan. But in some of the earlier renderings, an attempt was made to avoid having a long surface parking lot fronting on Midland to have a space that's not . . . what some people would say is more of a suburban design than an urban design. Can you explain why that might have been changed? Did the project get scaled down? What was the thinking? So, yes, the project did get scaled down, and it was simply cost. There was . . . Community Ventures couldn't find the dollars to create this project with a parking garage. The parking garage, you know, we looked at doing a . . . I think it was a 300 or 400 car garage, and it just . . . there was no way to make it happen. Even with TIF support, which Community Ventures gets reimbursed for after the fact, and New Market Tax Credits, which go into the project on the front end, those rents that I mentioned earlier are still a very thin profit margin for the project. So that was the reason there wasn't any public funding for a garage. Okay, I guess I wasn't thinking about a garage. I thought that there was a design initially that had surface parking, but it was interior to the face of the project on both Midland and 3rd Avenue. So there's design tradeoffs, I think, in every project. And so on this one, part of doing this project was quite a few community involvement meetings on the front end. And what we heard from the neighborhood was, do not make the back door of this project face our neighborhood. We want to make sure that the front of this building faces our neighborhood. Because it's a triangular site, the site plan does it justice. It's not like a big rectangular site where we could wrap the parking lot on all sides, which would be my preference, kind of my urbanist or new urbanist approach to that. And so the parking lot was going to be visible from one side. And so I think the concerns and desires of that neighborhood are what took precedence in making sure that the front of the building really addressed 3rd Street and even the Charles Young Center. Okay, and then on the affordable housing units, you said 80% of AMI. Will that be the only criteria that we know, 60% or 30%? I'll have to get you that answer. I don't know that off the top of my head. I apologize. That's okay. Thank you. Thank you, Chair. Thank you. Thank you very much for your presentation. I really appreciate it. And I think it's helpful for council members, for all of us to hear just regular updates on what's going around, challenges and exciting updates. And you said it, downtown's changing, U.K. is changing, and we're really appreciative of your efforts to be a partner. Thank you. Okay, next on our agenda. I'm sorry. Council Member Evans has one more question. Phil. Phil. Sorry. Sorry. I had one more question. It's kind of similar to what I had asked at the previous presentations about just the cost of leasing. Because, again, we're having this storefront, and it's kind of the same situation. But what do we know approximately how much that's going to be since this is a different kind of project? It is community ventures. Is there going to be some kind of concerted effort for it to be perhaps more affordable? And is it going to be focused making it more affordable for perhaps some entrepreneurs or things like that? I'm just curious to know. Yeah, it's a great question. The rents for the retail space would be in that $16 to $20 per square foot range. A portion of that building is specific to startup or early onset entrepreneurs, the salon entrepreneur who I mentioned. On top of that, the grocery, if we're able to come to terms with the grocery, is getting a huge discount on rent. Not a dollar amount I can say, but a huge amount. Part of the way that's able to happen is because community ventures has received grants for things like food deserts and so on. And so they can use that effectively to buy down the price per square foot that the grocery has to pay. They have other pots of money that they can use to buy down the rent that an entrepreneur would have to pay. A private sector developer, there's no way they could do this project. I couldn't do this project at those rates. So, you know, thank goodness for community ventures because of their grants, they are able to buy down those rents. Thank you again. Appreciate it. Okay. The last item on our agenda is the financial update from Commissioner Mara. Welcome. Thank you for your patience. Thank you, Chair. This is our second month of the fiscal year. So this is the financial report through August. And we start that off with the comparative unemployment rates. And I wanted to point out that we're in a flow right now. If you will look at this, this is 12 months' worth of unemployment rates. And as you can see, the state in the U.S. has not changed that much, whereas the Lexington MSA in Lexington kind of has a wave effect where the unemployment goes up during the summer and then gradually goes down until the Christmas season and then goes back up again. So for comparison, the month of July in the U.S., it was 3.7%. It was the same 3.7% in June, whereas Lexington July is 3.9%. It was 3.9% in June. So we have a low unemployment and low inflation for an extended period of time. And that's an unusual economic phenomenon. That's not the usual thing that we see. So with that in mind, let me go to the next slide, which shows the economic indicators. And I'll draw your attention to the second one there. And the most recent information that we have available is in March. And year over year, total employment was 191,000. So while we have low employment, we don't have more people working. We may have a change in who is working, but the pie is about the same year over year. So if you look at our main revenue driver, which is wages, for us to have increased revenue, we have to have either more people working or more people getting raises. Well, with low inflation, you have lower raises. So this has an impact on our number one revenue stream. So just keep that in mind when we get to the other numbers. The other key economic indicators are very similar in the story. They're not varying very much. Home sales go up or down 100, but business license and the other economic indicators there are pretty consistent month over month. So we're in a stable environment, but it's one that does not generate a lot of additional revenue in the withholding category. Any questions? Thank you. I'll have Rusty Cook come next. Good afternoon, everyone. I'll go over the top four, budget versus prior year. This slide here is just a look at August only. We'll skip over that and go to our year-to-date, August versus budget. As you can see, our top four is $1.7 million below budget. All four categories are below budget currently. Employee withholding is $973,000 below. I want to point out on that our refunds back out to people who paid in is up this year. Net profit is $445,000 below budget. Refunds are also up there as well. Insurance premium tax is down $170,000. It is up versus prior year, which the next slide will show you. And franchise fees are also below budget, $188,000, but they are up versus prior year. So taking a look at prior year, you see we're down $1.3 million versus prior year. Two of the four categories, our top one being the biggest, are down. $1.4 million for employee withholding. As I said, refunds are up this year versus prior year. There was also an audit performed last year. We received a large payment in August, and, you know, those things come in. We start work on them. We identify something that may not come in for three or four months. That one came in last year in August. Net profit is $461,000 below prior year. Our refunds are up there, and our estimated quarterly payments are down in the first two months. Insurance is up $371,000 versus prior year. It's just not up the amount that was budgeted. And franchise fees are seeing an increase just a little under $160,000. Our electric utilities, as we can imagine, are up. We haven't, of course, got payment for the really driest months we've been having, so I anticipate continuing seeing some increase there. And our water utility is at quarterly payments that we receive over on the water utilities, and we haven't received one for this big draft bill we're going through. Is there any questions on the top four before Melissa goes over other revenues and expenses? Thank you. All right. So going on to the rest of our revenues, similar to the previous slides, we don't have a lot of positive numbers on here in our revenue, so I'll hit some highlights. The property tax accounts, we're up about $61,000, and that is partly due to motor vehicle tax. And then where we're up and we're seeing a positive variance of $467,000 in services, that is primarily due to our detention center bed fees. They're up year-to-date and year-over-year for the first two months. The investment income, is there other positive on there? And that's our accounting entry on the adjustment cost to market, so there's nothing to get real excited about with that one. Overall, when you bring in the other categories of our revenue, we're under budget to where we thought we would be the first two months, by about $1.2 million. It's a 2.1% variance for the first two months of the fiscal year. Going to the expense side, you'll see this is where we're kind of saving ourselves right now. We have a positive variance in personnel. It's showing a million dollars. We already know that we have some adjustments that are coming that's going to lower that variance slightly, and you'll probably see those pick up in the next report or the report after on that. Our operating variance is $800,000. It's down slightly from prior month. This is probably a more accurate reflection. July is a month where people counsel you all are on break. People take their vacations. There's not a lot of spending going on. That one three variance that we had last month I think was probably a little inflated, and this $800,000 is probably a little bit more realistic to where we are at this point in time in the year. Those categories where we're seeing that $800,000 that are making that up, it's the same ones. It's professional services, operating supplies, repairs, maintenance, utilities, the same accounts month after month that I feel like I stand up here and say the same things over and over each month. We're right at budget with our insurance and debt service partner agencies. Our capital, like I said, that one's a little bit harder to predict when we will spend that because it's typically one-time expenditures, so you don't have a history of, well, we purchased this in August, we purchased this in September, that kind of a thing. If you take all of our expense variances and with our revenue, we've got a positive change in fund balance of $715,000 for the first two months. We were budgeted to be at a negative position of about 9.6, and we're at a negative position right now of about 8.9. So comparing revenues to prior year revenues, we're about $800,000 less than where we were last year in August overall. And then on our expenses, you can see we have higher expenses than we had last year. You'll notice, though, the personnel expense is less in FY20 than it was in FY19. Some of that is due to the timing of payroll. Some of that is also due to, you know, we're holding vacancies longer, but I believe the majority of that is the timing of when our pay periods occur and the accruals back to the prior fiscal year. So we're still doing better than we were last year, but overall, we just are watching things. Are there any questions? There are just a few, and we'll start with Council Member Brown. Thank you, Chair. Go back to the last slide, please. The partners' agencies, what comprised of that? I noticed there was about a million-dollar difference there from the previous year's budget, or, I mean, actual. So that is probably due to a timing of a payment. I think last, I believe, if I remember correctly, last fiscal year, it took a little bit longer to get some of the purchase of service agreements with the partner agencies completed and approved through council, and so payments may not have been made as early in the fiscal year as they were this year. Is this the same area of expense that we have for all of our nonprofits that we support, the $3 million that's in the budget? Yes. What else is in that that comprises extra monies? So all of our economic development partner agencies are part of that, as well as the library. Okay. The library is the biggest portion. Okay. Okay. All right. Thank you. You're welcome. Okay. Any other questions? You're lucky today. Thank you very much, Directors. Okay. The rest of your packet has information only regarding other funds. I do just want to take a moment, since we have a few here, and go through the line-by-line item on the last page of your packet. Council Member Maloney is not here. We're going to keep economic development in for hopefully a soon presentation. Council Member Brown, do you want to keep in the review of LFC due debt? Well, I guess it could be brought up as an annual type of thing when we're dealing with budget, but it's not really a recurring. I think we made our statement. We had made our presentation, and I think it worked when we went after the budget there, but it had to do with how much we bonded is what that was. So I would move that we take that off the agenda. Okay. Second? Second. Thank you. All in favor? Aye. All right. We'll move that out to an annual update. The execution program we're keeping in? Yes. The two-year budget cycle, hopefully we will have a presentation on that towards the end of this year. The use of MAP funds per salaries, we're going to do that in 2020 in a budget account. It's coming up in, I think, the beginning of the year. The beginning of the year? Okay. Mr. Brown is not here, and Mr. Farmer is not here. Okay. So we'll stop it there since we have some absences. Anything else, or can I have a motion to adjourn? Motion adjourned. Thank you. We're adjourned. Thank you.