# Budget and Finance and Economic Development Committee on 2025-08-19 1:00 PM - August 19, 2025 > Auto-transcribed civic record · Committee · August 19, 2025 - **Permalink**: https://meetings.lexingtonky.news/meeting/6520 - **Source video**: https://lfucg.granicus.com/player/clip/6520?view_id=14&redirect=true - **Date**: 2025-08-19 - **Body**: Committee - **Last revised**: February 14, 2026 - **Length**: 9,568 words - **Speakers**: Clerk, Chair > ⚠️ **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 Budget and Finance and Economic Development Committee met on August 19, 2025, at 1:00 PM in the Council Chamber at Lexington-Fayette Urban County Government, 200 E. Main St, Lexington, KY 40507. The committee worked through six agenda items during the meeting, covering a mix of action items and informational presentations. One vote was taken, resulting in the approval of the June 24, 2025, Committee Summary, and Industrial Revenue Bond Policies and Procedures were also approved. The meeting included four informational items: a Monthly Financial Update for July 2025, a presentation from the Bluegrass Area Development District (BGADD), a Regional Business Park Authority Update, and a Review of Committee Referrals. No public comments were heard during the meeting. ## Attendance The following seven members were present at the Committee meeting on 2025-08-19: - Council Member Savigny - Council Member Morton - Council Member Allenger - Council Member Baxter - Council Member Sheehan - Council Member LaGrie - Vice Mayor Wu No members were recorded as absent or late. The committee convened with full attendance. ## Votes and Decisions The committee took one formal vote during the August 19, 2025 meeting. - **Motion to advance Industrial Revenue Bond Policies and Procedures items:** Council Member Baxter moved to send the ordinance and accompanying resolution related to Industrial Revenue Bond Policies and Procedures forward, incorporating changes discussed during the committee meeting. Council Member Savigny seconded the motion. The motion passed on a voice vote. [timestamp: 1:50:21] No roll call vote was recorded for this item; as a result, individual member votes for and against are not available. The motion carried with the condition that revisions identified through committee discussion would be reflected in the documents before they move forward. ## Contested Items **Industrial Revenue Bond Policies and Procedures** The committee engaged in a heated discussion regarding proposed updates to the Industrial Revenue Bond (IRB) policies and procedures, with debate centering on two primary points of contention. The first area of disagreement involved the inclusion of housing components within IRB eligibility. Members raised concerns about whether incorporating housing into the framework was appropriate and what implications it might have for the program's intended purpose. The second point of dispute focused on the expansion of eligible areas for IRBs. Committee members expressed concerns that broadening the geographic or categorical scope of eligible areas could create inconsistencies in how definitions are applied across different projects and jurisdictions. There were also worries that certain policy language or requirements could function as barriers to development rather than incentives, potentially undermining the program's goals. The discussion touched on the need for consistency in definitions used throughout the policies and procedures, with members questioning whether the proposed language was sufficiently clear and uniformly applicable. The extracted data does not indicate a final resolution or vote on these matters during this meeting, nor does it identify the specific individuals involved in the debate. ## Approval of June 24, 2025, Committee Summary **Agenda Item:** 0780-25 The Committee took up the approval of the meeting summary from its June 24, 2025, session. No discussion, debate, or concerns were recorded in connection with this item. The summary was approved by the Committee. ## Monthly Financial Update - July 2025 **Agenda Item:** 0781-25 The Committee received a presentation of the financial update for July 2025. This item was informational in nature, providing members with a review of the organization's financial status for the month. No key speakers were recorded in the available data for this agenda item, and no specific figures, concerns, or points of debate were captured in the structured record. The item was received as an informational presentation, with no vote or formal action required. *Note: Transcript timestamp data was not available for this agenda item. Readers seeking additional detail on the discussion are encouraged to consult the full meeting video or supporting financial documents filed with agenda item 0781-25.* ## Bluegrass Area Development District (BGADD) **Agenda Item 0782-25** The committee received a presentation on the Bluegrass Area Development District (BGADD) for fiscal year 2026. This item was informational in nature, intended to brief committee members on BGADD's work and activities for the upcoming fiscal year. No additional details regarding specific speakers, the content of the presentation, concerns raised by committee members, or further discussion are available in the provided record for this agenda item. The outcome was informational, with no vote or formal action taken. ## Regional Business Park Authority Update **Agenda Item 0783-25 | Presentation** [timestamp: 55:50] The Committee received an informational update on the Regional Business Park Authority. The presentation was delivered by Lucas, who provided an overview of case studies and strategic plans related to the Authority's development activities. The update was informational in nature, and no vote or formal action was taken by the Committee as a result of this agenda item. *Note: Detailed information on the specific case studies presented, strategic plan elements discussed, concerns raised, and the full substance of the Committee's deliberations is not available in the provided source data for this item.* ## Industrial Revenue Bond Policies and Procedures [timestamp: 1:17:00] The committee took up agenda item **0784-25**, a discussion of proposed changes to the city's Industrial Revenue Bond (IRB) Policies and Procedures, covering updates to housing components and procedural improvements. **Craig Bentz** led the presentation on the proposed revisions, which addressed both the housing-related aspects of the IRB program and broader procedural updates aimed at improving the administration of the bond process. Key participants in the discussion included: - **Council Member Sheehan** - **Council Member LaGrie** - **Vice Mayor Wu** The discussion centered on the proposed changes to the policies and procedures, including how the housing components of the IRB program would be structured and what procedural improvements were being recommended. Committee members engaged with the details of the revisions as presented by Bentz. The item was **approved** by the committee following the discussion. ## Review of Committee Referrals Agenda item 0785-25 consisted of a review of items that had been referred to the committee. This item was informational in nature, providing members with an overview of pending referrals for the committee's consideration. No specific speakers, debates, or concerns are recorded in the available data for this agenda item, and no formal action was taken. The item served as an informational update to keep committee members apprised of referred matters. --- ## Decisions - **Motion** — passed (0-0): Move ordinance and resolution related to Industrial Revenue Bond Policies and Procedures forward with changes --- ## Full transcript 1 හොඳින් රැළිඵ් ලෝරන් පොටම ඇත. බරින් කර සඳහා මෙම ස්තූක් 0.1 මෙම සමට ඇත. අපි විට භාවිතා සටින් ලෝරන් ඇත. පෙරීමට පෙරීමට පෙරීමට පෙරඓමට පෙරීමි, අපි සමට ඇත. අපි ක්ලින් පොටම ඇත. අපි ක්ලින් පොටම ඇත. අපි විට පෙරීමට සමට ඇත. අපි ක්ලින් පොටම ඇත. අපි ක්ලින් පොටම ඇත. මෙම සමගක් ගන්න කරම්වන අඩු ගන්න. පෙරීම විට සමට ඇත. ක්ලින් පොටම ඇත. විට ක්ලින් පොටම ඇත. අපි පෙරීමට සමට ඇවත්. අපි සමට පොටම ඇත. අපි පොටම ඇත. එය පෙරීමට විට ක්ලින් පොටම ඇත. විට ක්ලින් පොටම ඇත. අපට පෙරීම විට ක්ලින් විට ක්ලිවලම විට. අපි මුල්ලම විට ක්ලින් පොටීමෙන් සමට සහ ගන්න. අපි සමට පෙරීම විට ක්ලින් පොටම ඇත. අපි පෙරීම විට ක්ලින් පොටම ඇත. විට මුල්ලින් වපි ක්ලින් ඇත. විට පෙරීම විට වනු ඇත. විට පෙරීම පෙරීම ලද මෙමන් පැති පෙරීම ප්‍රතිඵලයක් පාන්න. විට පෙරීම ප්‍රතිඵලයක් පාන්න. සහිස්වාඩුවාස් විටඦරුදෙ මිශ්‍රතිඵලයක්. ඇවිටඦප ප්‍රතිඵලයක් පාන්නම්. සඳහාවියෙන මිශ්‍රතිඵලිදු දිලිස්මි. විටඦපලිජ් එකතු බාථාවික න. සඳහාවියක් මිශ්‍රතිඵලයක් සඳහාභම් මිශ්‍රතිඵලය බාථාවි බ විටඦපලිබෙවට... විටඦපලිජ් සඳහාවියක් සඳහාවට... විටඦපලිජ් සඳහාවට... විටඦපලිජ් සඳහාවට... විටඦපලිජ් සඳහාවට... විටඦපලිජ් සඳහාවට... විටඦපලිජ් සඳහාවට... විටඦපලිජ් සඳහාවට... විටඦපලිජ් සඳහාවට... විටඦපලිජ් සඳහාවට... විටඦපලිජ් සඳහාවට... විටඦපලිජ් සඳහාවට... විටඦපිටඦපලිජ් සඳහාවට... විටඦිටඦපිජ් සඳහාව jealousy සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සමින්න සින්න සමින්න සමින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න සින්න this three-county region is really, really strong. You know, you have over 500,000 people from a population perspective between the three counties, three of the fastest growing communities in the state of Kentucky. It's a really relevant case study and one that we will plan to continue to follow. A case study, and again, you know, these are obviously just examples. By no means is it exactly how this thing will develop. You know, that will continue to evolve over the years. But if you go down to kind of south-central Kentucky and Franklin-Simpson County, which is just south of Bowling Green, this is a really good example of how this Industrial Development Authority has developed three separate industrial parks. As they've grown, they've been able to acquire more land. And not only have they sold these properties to end users, meaning the company that is then building the building, employing the employees, but they've also strategically sold off pieces of the property to trusted strategic developers who are then building speculative buildings, 100,000 square feet at a time, 200,000 square feet at a time, which then allows the community to be more competitive on more projects. Not every single project has the ability or the time to build their own building. So from a speed to market perspective, the name of the game in economic development is opportunities at the plate. You're going to swing and miss more than you connect, but you want opportunities at the plate. So this strategy has allowed them to have many opportunities at the plate. At the bottom there, there are recent announcements. You'll see they've landed hundreds of millions of dollars in projects, most notably Trader Joe's, a $300 million deal, and almost 1,000 employees. That was an end user deal. But right below that, or above that, excuse me, Leo Kim, an EV battery supplier located in a 100,000 square foot spec building, because they had both products to market and sell. So again, this is one that we intend to apply to our regional authority here. Here's another really specific case study I think is relevant. I think playing off of the Blue Grass Army Depot and all that comes with that facility in Madison County is really important. As you likely know, they just wrapped up the commitment to deconstruct the weapons of war, which were the final ones here in the United States, and that project wrapped up over the last year. There's been 2,000 highly skilled employees from all different levels of occupation, but highly skilled, security cleared individuals, that from a marketing perspective, that is a legitimate answer to a very difficult workforce shortage that so many communities have a challenge of answering. In addition to a targeted industry strategy of identifying DOD-related entities and even private development opportunities to build for these types of facilities to mix that in to our two different properties and strategically locating those types of companies. So again, this has an array of uses from office and retail, not necessarily exactly what we would advocate for, but in research and development and office perspective on the front with this type of use I think makes a ton of sense, especially as the Army Depot continues to evolve with additional missions. So wrapping up in terms of the priorities immediately, it's wrapping up the due diligence on both properties from an engineering perspective later this fall. We certainly should have enough data to be able to properly begin marketing these sites to prospective users and real estate advisors and site selection firms. Also finishing and developing the overall strategic plan of this authority and how these two sites can mix with together, benefit one another, but also live on their own from that perspective. If you look at the Brea site, it's obviously much smaller in scale. However, it fits really well of those 20 to 50 acre users. It's also just north of the brand new mega site that the state of Kentucky put $65 million into to buy 1,500 acres in Rockcastle County. The 800 acre site in Madison County are two totally different sites. That 800 acre site will not be a mega site. It will be a multiple user site. So I genuinely believe all these sites can play well with one another and benefit one another. That will be obviously an evolving piece of our strategic plan. So before I get buzzed, I am going to pause here and I would be happy to answer any questions. Thank you, Lucas. Thank you for ending before somebody had to buzz you. Now, committee members, any questions? Yeah. First up, we have Council Member Savigny. Thank you, Chair. Thanks so much for the presentation. Just a few questions. Is this the first time you've done like you're a consultant, I think, right? Is this your first regional park or have you guys done other ones? I would say at scale, technically it's the first regional park, but Kentucky is an odd place. So we've done a lot of deals in communities that have multiple cities and a county where they've invested similarly into a deal. So the structure itself is the same, but in terms of multi-county, sure, the first one. Okay. And then the scale of this Triple Crown Business Park, it's 200 to 300 acres. What's typically the return on investment that you're looking at? My guess is you're looking at a per acre value for that land. And you've got it, you're zoning it as industrial. Heavy industrial, yes. I too. No, it's a good question. I think it's dependent on the sites, dependent on the location. You also have two different opportunities for return on investment. One of them is just simply the sale of the land, right? So that will be one of them. The other is how many jobs do we realistically think we can get? I think I'll be able to more accurately answer that question once we have due diligence coming back in. But for perspective, on 200 acres, and you look at recently announced projects on similar type projects that we should compete for, it's very safe to say that you should be able to create 700 to 1,000 jobs within that park, right? And if you look at the average wage that was announced last year by the Kentucky Cabinet for Economic Development on the billions of dollars that they did across the entire state, they were at $28 an hour. Our location in this region pays higher than that. So from a modeling perspective, we would be closer to 30 to $32 an hour. And then just to give you more perspective, if you look at a couple of those projects that are next to this 200 to 300 acre site, High Street Yale is on 50 acres. They employ about 1,000 people. Hitachi Automotive is on 50 acres. They employ about 1,000 people. You then look at Nobelis, who's on about 35 acres. They employ about 150 people, right? It depends on the industry. Sure. I think it's very safe to say 800 to 1,000 on that particular property is very attainable. And at that wage I mentioned, at full scale and full build out, roughly should equal a million dollars a year in occupational tax if we're successful in meeting those numbers. What if someone approached you and said that they wanted to put a solar field on that industrial land, what would you say? I think it would obviously be up to the board and how they wanted to handle that. I would say it's probably of the 200 to 300 acres, that particular property, probably not the best use of it. Probably not. I think it's a question that we'll get, probably more specifically on the 800 acres, where you could probably co-locate if you wanted to do that, right? You have much more room to do on the 800 acres. I would say from our perspective, we should listen to any and all deals, and we should present them, and then we should go through the pros and cons, and what's best for the region is what we should do. Thank you. I appreciate that. Thank you, Chair. Thank you, Councilmember. Next we have Councilmember Morton. Thank you. Thank you for the presentation. I'll actually follow up on Councilmember Savini's question about the return on investment. I know we're early in the stage and phase, so that you may not have an exact number, but I'm sure that there has to be some type of estimates, because any time you put investment forward, you would assume that there's something in return. Based on the estimates and nothing in standing, what is the projected tax revenue, jobs, or economic activity that Fayette County will receive to its financial contribution for the park development? Great question. So from a high-level perspective, each county owns 33 percent of the project, right? So they will then in return get 33 percent of the revenue when it's all said and done. In terms of what we're projecting, it's a moving target. As the engineering comes back in, we'll have a better idea of what's developable and what's not. I mentioned on the Brea site, I believe if we do end up with about 200 acres that are developable, I think it's safe to say 800 to 1,000 jobs is very attainable, right? And I mentioned, if that is the case, and if we somewhere get close to that $30 to $32 an hour, you're looking at roughly a million dollars a year in just occupational tax revenue. That's not to mention property tax, that's not to mention insurance premium tax, net profits, et cetera, right? Occupational is obviously the breadwinner of this stuff. On the 800 acres, that's obviously a much larger project. So internally, from a conservative perspective, if you look at, again, just other case studies, it's very safe to say we believe that close to 3,000 jobs should be attainable on that project. Now, again, contingent upon how the engineering reports come back, if we find out, oh gosh, we can only develop 200 acres, which is hopefully not going to happen, then that would change that perspective and it would also change their perspective of should we move forward with this site or not, right? But again, assuming all things are being equal in that scenario, let's just say 3,000 jobs was attainable at $30 to $32 an hour at full build out, it's about $4 million a year in occupational tax revenue that would be able to be dispersed amongst the partners. That's also not including any of the other tax revenue that would be generated and these are obviously numbers that are subject to change and still being developed. And then, and actually perfect segue, so as you started talking about the jobs and what's coming out there, the next question would be what type of jobs, wage level, skill requirements are being targeted at these industrial parks and which part of Lexington's workforce are best positioned to fill them? Yeah, great question. So I think both sites will play off of one another but are slightly different in the types of end users that would locate there. So let's start south and move north. In the Brea site, I think it's a wonderful supplier type site. Again, if you talk to some of the national site selection companies, everybody sees the 500 acre, 1,000 acre projects in the paper, right? They're still working every day 20 to 30 acre projects. That particular site, in my opinion, is a wonderful supplier site that, you know, we did a project in the last couple of years that was a 30 acre project. They were a plastics and rubbers company. They located on 33 acres, built 150,000 square feet, and hired 220 people. They supply parts to Ford, right, up in Louisville. That's a perfect example of what I think will end up on this Brea site and what can go on the Brea site. And then as you move further north to the northern Madison County site, again, that one has a ton of flexibility. I do believe, you know, having strategy around being able to get creative with private real estate development opportunities where you have a bit of a mixed use of research and development up front, supporting some DOD related initiative at the Blue Grass Army Depot is a realistic. And so your wages there are going to be much higher, right? And then also, I do think the larger box development projects obviously are really well suited there as well. So, you know, the data would show in terms of the location, like automotive is end up being like it will score the highest, right? That will, you know, remain to be seen, but I think we're in a unique position to land DOD. And then the workforce coming from the Blue Grass Army Depot, that workforce specifically scores most relevant to chemical industries, which also pay a much higher wage. So think of Catalan in Winchester, Kentucky, right? You know, they would fall in that category and they pay a really strong wage there. Thank you. And then just to follow up with that, I guess going directly with skill requirements, are we looking at across the board, entry level jobs for all types of folks is what we're looking at, right? Yeah, sure. I mean, I think it would be dependent on the company, right? But, you know, making the example that I gave you of the plastic and rubbers project, you know, they were hiring anything from entry level all the way up to executive level individuals, right? So, yes. Cool. Because you mentioned, I guess, the range of like $33 to $30 average, and we know that a lot of entry level jobs do not start up with that. So I guess, is there any percentage or any thoughts tied to jobs entry levels for low income houses or whatever that they will have access to benefit this regionalism plan? Is there a percentage of jobs you're looking at to do at that level? Talk through that. I don't know if I can answer that question specifically. I would just state, you know, our firm, we work multiple projects for multiple different industries, and that average is related to a percentage of entry level individuals that are, you know, maybe making closer to $18 an hour to their hiring manager level individuals who are making, you know, six figures, right? And that average is out to X. So I guess of the 30 to 32, what percentage of entry level makes up that number? I can't say specifically, but every project I would imagine will have entry level positions. Cool. I would hope it would be intentional making sure that we're providing jobs for all all folks. And then lastly, I think you mentioned a little bit earlier. Since nobody else has signed up. My bad. And then lastly, I think you already hit it. So the return is split equally between each city, not based on the amount of dollars investment they put forward. It's each county. Each county, excuse me. And, you know, the benefit is the same as the risk, right? You know, if you get 33% of the benefit, you're obviously also on the hook for 33% of the risk. So to date, each county has put in the same dollar amount to the project, right? And the hope is then each county will reap the same benefit on the tail end. Sounds good. Thank you. Yep. Thank you, Council Member. And thank you, Lucas, for the presentation. I know you mentioned earlier in the presentation about salvaging this project. I know the initial target was Scott County. And when that didn't happen, you all regrouped and focused on Madison County and Berea. And I know Mayor Fraley and his team stepped up. Kevin, I just want to give you the opportunity to maybe add a little more, maybe tell council members maybe some things that are important to keep in mind with this whole effort. Maybe some of it about the investment that has already been leveraged with the KPDI funding and then also the federal funding. I think the opportunity to really leverage funds on this project is probably better than any of the ones I've been personally involved in. PDI is going to be huge in this. You know, we were going PDI for the Georgetown site and kind of got caught up there as well. The Economic Development Cabinet, as well as KU, have shown an interest and are putting money into helping with some of the initial work toward the Berea site. I think the caution here is time. You know, it's going to, just like we've seen with Legacy Business Park, it takes a few years to get it online. You've got to build it out. But these are good jobs. And if you look at the Berea site and what's there today, those are industries that have been in that community a long, long time. They may have changed names over the years. So they provide good long-term career for families at all levels. And to me, that's the main takeaway from this. We're given opportunities for people to really go toward where they want to for their family. Okay. I appreciate that. I know Judge Reagan-Taylor is a big part of this collaboration as well. And Lucas, did I hear you say that there's some pending federal funding that we're waiting on to see how this federal budget shakes out? It's CPF funding, which I believe you all were successful in obtaining for your Legacy Park here in Lexington. So it's been recommended for approval. And now we're waiting for the federal government to hopefully approve a budget and include the CPF recommendations across all of Congress. Last year, when they approved the CR, the continuing CR for the full year, that wiped out all CPF funding. So Congressman Barr's office then allowed us just to roll that same funding request into this next budget request. So yes, hopefully later this fall, early next year, we'll get that good news. And that will be $6 million we can kick-start the Berea site with. Okay. All right. Well, thank you again for the presentation. And Councilmember Allenger has a question. Thank you, Chair. Kevin, can you come up here? I'm just trying to understand exactly what we've done so far to where we're at right now. I'm going to go back to kind of just square one. So each of us put up, what, two and changed a million? The original plan was we would all put up $2 million to match the $6 million total KPDI. That, because of the issue that developed in Georgetown, Scott County, we weren't able to go ahead in that round and apply. So we've all kind of kept that in mind. Our budgeting team has kept that money ready for this project. And so we have used, and we brought the PSA, if you will remember, a month or so ago for some of the funding. So we've been putting that money toward this project, I think at about 60 at this point. A hundred. A hundred at this point. The last draw was 60. So we've all put in $100,000 at this point. Since we did the first application that didn't go through, the state has changed some of the parameters revolving around the matching part of PDI. So that money, if the application Lucas is working on is successful, we will be in a good shape to do that match as well. So out of the $2.1 million, $2 million still sitting in there. And when we talked about it, we had the site of the three, first I had the Scott County, then we went to the Brea, that was like 300 acres. And now what's the difference between the 300 acres there and then the 800 acres? And how's that? Because I always, I didn't realize the two sites there. Yeah, so Mayor Fraley had the ability to really jumpstart this process with the 300 acres and show what this partnership could accomplish. And so it was an opportunity to go ahead and move this ball forward. The 800 became available after that. And it's something that the authority board, a committee of the board has been and has done both a lot of the due diligence on running the numbers, looking at all that. And so we have assumed the option on that 800 acres from Madison County Fiscal Court, but we still have a year plus, a few months at this stage to complete all the due diligence on it. So it's an opportunity, as Lucas said earlier, they are good companion sites, but one allows you, the 800 acre site allows you to look at maybe some larger projects as well. That one now is not zoned properly at this point, right? That one would still have to be rezoned. Okay. And also the utilities, I think there's some differences on utilities. That is just what you would typically call a raw piece of land, the 800 acres at this site. All right. That gives me a little more understanding. Okay. Thank you so much for the presentation. Thank you, Chair. Thank you, Council Member. And thank you, Lucas. And thank you to our partners for this effort and look forward to hearing the next update. Thank you all very much for your participation in the project and your belief and trust. Thank you. Thank you. Thank you. All right, committee members, going to the next item on the agenda, and it's the Industrial Revenue Bond Policies and Procedures. This presentation will be given by Senior Administrative Officer Craig Bentz on the Industrial Revenue Bond Policies and Procedures. Craig, Mr. Bentz, the floor is yours. Good afternoon. So this presentation is a summary of our work over the course of this year on policy guidelines related to industrial revenue bonds. We've been engaged in this review at the direction of the administration to evaluate the inclusion of both housing and other components and IRBs to make procedural improvements. This is just kind of an explanation of the what and the why around industrial revenue bonds. LFUCG can issue bonds to finance the development or expansion of industrial buildings, essentially, as defined by state law. And the purpose of that is to improve economic development, relieve unemployment, and to encourage the increase of industry. Just of note, because it's something I had to look into when I first started down this path, industrial buildings have a pretty broad definition by state law in KRS. They include everything you would expect, like manufacturing and warehousing and infrastructure. But they also, more recently, include things like multifamily housing. They include construction that will revitalize and redevelop certain areas regardless of the use and that sort of thing. So it's pretty broad. Industrial revenue bonds are not the general obligation of LFUCG or backed by any pledge of LFUCG credit. And more to the point, there's no cost to the city for the issuance of these bonds. All of the costs are borne by the applicant. We typically see requests for industrial revenue bonds in one of two forms. The first is kind of the traditional bond form where the applicant is just looking to obtain a lower interest rate, a point or two lower than they would typically get on the market. The second one that we're starting to see more and more is a lease back arrangement in which the city also takes ownership of the property on paper to provide certain property tax benefits. And I'll talk a little bit more about that one as we move forward here. This slide just shows you the scope of the policy review that we've been engaged in since January. We took a look at current IRB policies and guidelines and with an eye toward allowing for housing under certain circumstances. We're also maintaining the requirement that's already there for job creation or evidence of strong economic development resulting directly from projects. And lastly, we use this opportunity to consider expanding the defined area for these applications to include their entire urban service area rather than just a small section of the downtown. This just reiterates those bond types I talked about a couple of minutes ago. There are two types of IRBs for new construction. The traditional again just results in an interest rate reduction typically and approved sites will remain on the property tax roll. The big difference between that and the lease back IRB is that the PVA would actually show the property ownership as LFECG as you can see on the example for the Manchester that's kind of on the inset of the slide. The property is not subject to typical property tax, ad valorem tax for the length of the IRB agreement and for that reason there's a requirement that the applicant negotiate payment in lieu of taxes or pilot agreements with the taxing districts as they enter into these bonds. This is just an outline of the process that we used as we moved forward with this review. There were a number of meetings in January. We had an initial internal working group meeting to identify the scope of this review and specific issues to address and again we looked closely at things like housing requests as well as procedural issues that we knew existed and negotiation of pilot agreements and all of those types of things. In April we had meetings with representatives of those property taxing districts. That's Lextran Library and Fayette County Public Schools. We moved on from there and in June we had input from our building industry representatives as well as a stakeholder group to obtain some additional input and at that point we had some drafts to review and get responses on and then more recently earlier this month the economic development investment board reviewed this and they've recommended approval of this language to council and then of course that brings us to today with this committee and then ultimately hopefully the council consideration of this item. This is a list of all of the stakeholders and participants that have been engaged along the way since January. Council members Baxter and Brown have both been involved in this process as well as five of our economic development investment board members. All three of those property taxing district representatives that I had mentioned and then there's just a number of other industry affordable housing banking and other sectors that are represented on this list. So this is the result of the of the work we've been taking a look at. The update that we focused on took a close look at the lease back model of IRBs and all of these improvements that you have in front of you today are the result of that direct input from the from the taxing district partners. We wanted to make sure they were truly integral to this process. The last bullet point on this slide is really just a summary of the process improvements that you see in all of the red lines in your packet today. We're requiring a pre-application meeting with staff that would be economic development staff to determine initially if the project meets the goals of LFECG and again those are those job creation and economic development goals as well as others. From there staff holds a preliminary meeting with other taxing district representatives, the library and LexTran and so on Fayette County Public Schools to discuss that project and obtain input. We want their early involvement in this in this process. Only after we get through those first two processes satisfactorily can the applicant begin negotiating with taxing district representatives and that's that pilot agreement they would they would begin having those discussions with the taxing districts and then finally once they get through that process once they have some draft pilot agreements in place they would then apply make a formal application to the city that would that would go through the economic development investment board and ultimately to council. As I said earlier we took a really close look at housing requirements as we went through this process. We worked with Commissioner Lanter and his team on coming up with some requirements that would be embedded into the language. First in order for any leaseback IRB to have a housing component it would have these requirements. It would need to be mixed use and that is for the primary purpose of making sure that some jobs are created on the site and then from there it's everything is tied to the length of the IRB incentive in other words the length of the bond. So if if an applicant wants a 15-year leaseback IRB they would be required to provide a minimum of 20 percent of their proposed housing units on the site to be affordable and that's defined Commissioner Lanter's group gave us a definition of 80 percent of the area median income for that. If they are seeking a 10-year leaseback IRB incentive they would be required to provide 20 percent of their proposed housing units as workforce housing and the definition for that is 80 to 100 percent of AMI. So those are the kind of the baseline requirements that we baked into the language and finally as I'd stated these are that we took a look at the areas eligible for IRBs and expanded that to the entire urban service area. The map on the left which is very difficult to see it was a scan of a scan of the original resolution but it's it's just a small chunk of the downtown it's the main street and and in broadway and so on for east and west north and south with a with an area surrounding that so we wanted to provide some other opportunity for projects that would be eligible for this as well and with that I'm glad to answer any questions. All right thank you Mr. Benz for the presentation and your work on this. Committee members first we have Council Member Sheehan. Thank you Chair. Thank you for this presentation. I appreciate that this process now includes the negotiation of the with the taxing district representatives at the front end because I know in our the last one that came before us it kind of it happened a little late in the process and so there was some pushback for us to approve it because those agreements weren't in place. So I appreciate that adjustment in the policy. I have a question about the housing requirements for the 20 percent for the first question if somebody wanted to do the 20 percent under the workforce housing to get the 10-year agreement could they not do in that 20 percent under the 80 it has to be like one category or the other you wouldn't be able to mix? I think there's some opportunity for discussion on that with if an applicant came in and they had a mix there that we could discuss with them. I think that would be something that could be discussed during initial meetings. We just wanted to establish just very baseline recommendations kind of minimums for this so that I think there's some opportunity to for those type of things and and that would that would be an appropriate time to discuss differences or or some type of hybrid and the timeline of the of the leaseback IRB and that sort of thing as well. Does that have to be written into the policy because it looks in the policy language around page 55 of our packet that it's it's one or the other? And I and I think for the 15 year it should be at least under 80 percent AMI like the affordable housing capital A affordable housing but then under the workforce housing if somebody wanted to include also under the 80 percent AMI I would want to see that. Yeah I think that's a good comment I think we could look at putting additional language in there just at allowing you know for creativity in there if an applicant has some sort of hybrid between the two or or additional desirable affordable housing on a project that those discussions can happen we can move forward. And then about the 100 percent for workforce when we did our urban growth management soda a year-ish ago we defined in that ordinance that zoning ordinance that workforce housing was up to 120 percent for the housing density bonuses and sometimes across government entities we get we cause confusion because we're not being consistent in our in our definitions so could you talk to me here about why this is 100 and not 120? That did come up I think we were just trying to be intentional about capping what what the workforce housing could be at if if someone truly came in with something that's 100 to 120 percent you know of AMI that it would be it would be more difficult to fit it into these categories so we just wanted to we just wanted to very much clarify it for the purposes of this process. Okay and so for me it's important to be consistent in our definitions across our department so I would want these to be consistent um and I would also like to see language if if someone wanted to do under 80 percent AMI in the 10 year lease back I would want to be able to allow for that. Craig you got Evan behind you Evan do you want to add something to it but council member I don't want to take your time. Yeah I think we can easily uh make a change to the policies to accommodate um the uh for the for the up to 10 year IRB um for at least 20 percent um instead of saying between 80.01 percent and 100 you just go up to 100 percent I think you would account for that situation where you could have five percent that's you know uh let's see 50 percent and one and then the rest is uh you know 90 and that would account for that so that would be an easy change if that's what what the council wants. And I'm not sure um chair if you want us to make motions or if you're working to move this forward but I'm interested to hear um from my colleagues about the mixed you mixed rate um question but then also the 100 to 120 percent to be consistent. Thank you. I think okay no I think you I think we I think there are opportunities to make motions after I think after everybody's had a chance to weigh in to the to the ordinances in the packet. All right all right thank you um council member. Next is council member LaGrie. Thank you chair. Um I just have a couple of questions uh kind of about the expansion of the area of coverage. So can you just talk to us a little bit remind us of um how many IRB projects have been completed in the infill and redevelopment area over the past few years? In the past few years only one the Manchester Hotel so there's not there have not been a lot there there have not been a lot of these applications and just due to the complexity of this and we don't anticipate that there's going to be a lot moving forward it's just another tool in the toolbox essentially. Um and then how many have been done in already in the expanded urban services area? Any? Um Evan I'm not sure if you're or Kevin if you have answer to that I'm not sure how many total I would say five or less but that's just based on what I've been able to find I don't I don't have a list with me. So historically we didn't do any leasebacks and so all of your projects pretty much were um historically with not-for-profits. We did quite a few with uh Transylvania University quite a few with some of the hospitals. I think we might have done some with Catholic High School. So historically that's kind of what your IRBs look like for us. The the first leaseback we did was Manchester which is inside the old area. We also have a leaseback on the table with the soccer stadium but they have never come to us to finalize doing an IRB. So those are your two potential. One of them is is a completed leaseback IRB project. The other one is a potential one which is the the new soccer stadium which is not in the old old footprint. And that doesn't have a housing component? No it does not. Just to clarify. I think part of you know so we we will have groups contact us about doing this and I think that's what kind of informed this discussion. Okay. We had a potential project and it was a housing project but they weren't willing to commit to providing any any affordable housing or or the other market housing so we were not interested in giving them the financial incentive. And so we wanted to I think the idea was to kind of solidify all of that in a policy instead of us kind of doing it on the fly. Okay so with the expansion of the eligible area kind of do you all have a sense of what trends you can anticipate in terms of applications and obviously in relation to some of these other changes? We don't have projections for how many of these we might be receiving. I expect it'll be more in the past just because there'll be a larger area of opportunity there and I know with the expansion that's occurred there's more developable land so it's reasonable to assume we'll get more but I don't think we're going to start seeing them monthly or anything like that. Okay and then in in your summary of your process improvements there I think it's on slide 42 it it says that there's a requirement of a pre-application meeting with LFUCG staff to determine if the project meets the goal of LFUCG. Can you just can you clarify for me what all of our goals are? Are they economic development? Are they housing? Well broadly and it depends on what the application looks like but broadly it's for economic development and for job creation which are very much tied together. But if it's coming forward with if a project's coming forward with a housing component we would want to make sure that it's meeting those minimums and that sort of thing. And how do you all define special and compelling circumstances per the language in the ordinance? Can you all talk to us a little bit about that? I think it's I'm going to sound like a broken record here but it's it's of it's projects that come forward that particularly respond to those to those needs that that they are either providing significant economic development benefits or they're providing more jobs than you know what you would typically see in an area or that sort of thing. All right um it sounds excuse hi and just really one quick point to to the question you asked right before that so when we look at those priorities we'll be looking at our shop we'll be looking at them from an economic development priority but in those conversations so you can still have a lease back IRB for just true economic development the component we're talking about today is for housing but if we were talking about one for housing without a doubt Commissioner Lanter would be part of that initial conversation so we would make sure those parameters but depending on the context even Commissioner Horne so it's not just like you know a couple of people sitting it's having the parties in the room from LFUCG can kind of overlook the whole scope of what we're looking at that maybe Craig and I aren't aware of what Commissioner Lanter is looking at and and vice versa. Okay thank you very much my time is up chair thank you. Thank you council member next we got Vice Mayor Wu. Thank you chair uh thank you Mr. Benz for your work on this um I have a question as well following up on Council Member Legree's question about special circumstance if if we're looking at sort of the idea of goals of LFUCG and they're kind of wide ranging everything from housing to economic development um is it is it your intent with these recommendations right now that we're mainly addressing housing? That I'm sorry can you repeat the last part I just couldn't my question is if I were a um an applicant coming in saying I'm going to build a hundred units of housing I'm going to make 20 of these units affordable or workforce for example right um if I come to the staff to determine whether or not my project meets the goals of LFUCG and there's no economic development component of it how is it going to be rated or judged? So what I'm asking is like these and correct me anytime if I'm wrong the IRB structure in the past was for economic development right these recommendations I assume are in response to Senate Bill 25 which opened it up to being able to be used for housing of a certain size and above right to me these recommendations seem like they're addressing housing and not economic development so if if a housing developer comes with a proposal and says here's what I'm doing it's strictly housing are we still judging it on uh any criteria relating to economic development? So keep in mind there's two different kinds of IRBs so that developer if there's no jobs component and and if you if you notice that is having that economic development criteria isn't there if there are no job components they can still go the traditional industrial revenue bond route even under and and just to correct we were already well into these conversations when when Senate Bill 25 was introduced so we were already going down this road it's not a result of Senate Bill 25. But they could still although that is helpful they could still go the traditional route and I checked with Ashley Simpson a while back that is a reduction in the neighborhood of a point point and a half two points and rate depending on somebody's credit worthiness so they still have an option to do an IRB if you want the incentive portion of an IRB so you don't want just the straight up loan you want the incentive portion then that's when these guidelines would would kick in so it's depending on what you're really you know if you're willing to meet some of our goal which is we all know affordable housing is a huge goal of this government then then you you have to look at these requirements as well. Can I ask also about the um in the leaseback IRBs so obviously we've established that at the moment the affordable housing and the workforce housing right now is kind of an either or but we're going to work on potentially blending them and kind of seeing how that works so the line that I'm stuck on is the project must have mixed use for the creation of jobs on site how is that defined if I develop a housing housing units and I have one project or a building manager on site as my employee does that qualify for creation of jobs? When we're looking at job creation I think a good example there's two properties in town that I've used as an example one of them actually is in a TIF zone so it would not be eligible for this but is the Met up on Midland so there are more than just housing project jobs and they're that kind of mixed use project I think the one and it was just a private development but if you kind of wanted to get a picture would be the Anderson commercial properties development out on Leastown Road right before you get to New Circle. Okay so is there a definition of what job creation looks like to qualify for the leaseback IRBs? We will look at each we will look at each project individually. Okay so it's kind of subjective based on the folks who approve this. We would want more I think to your earlier point we would want more than just one leasing office job we would want the opportunity for an environment for more permanent job creation. Who is the body that would make that determination? We will like we were saying with Council Member Legree we will take a look internally first at the project in a meeting with the developer based on what kind of project it is that will then be discussed with the taxing partners at the table to see what their interests because you know without their commitment to the project there really is no incentive financially because of the the property tax component. Once that if they are able to reach their pilot agreements it goes to the economic development investment board which has two Council Member Brown and Council Member Savigny on it and then it would ultimately you know final decisions on industrial revenue bonds come to the council. Okay thank you I'm out of time thank you Chair. Thank you Vice Mayor. Next we have Council Member Savigny. Thank you Chair and I did kind of I just wanted to say I did we did bring up the 120% housing for workforce 120% AMI and I know the we were looking at some different stuff but I do think there's a the language should be consistent with our with our kind of our affordable housing and workforce housing bonuses that are defined in in our our code and it is 120% so if I would support a motion to support that if someone wants to do it at some point. Thanks. Thank you for that Vice Mayor Wu. Thank you Chair. I understand you all underwent this look at these policies not strictly because of Senate Bill 25 but as you said Senate Bill 25 helps and I am always pleasantly surprised when we do get from Frankfort something that is potentially another toolkit in doing some of the things that we as a city want to do. We all know that we're in a major housing crisis right now which is especially acute it's all over the it's every level but it's especially acute in affordable housing so I'm very happy about having another tool in our toolkit. My only concern with the recommendations as they stand right now is are we putting too many potential barriers towards development? Are we taking something that's potentially kind of going to open a little bit wider our ability for people to develop especially denser housing missing middle housing the kind of housing we'd really need? I just want to make sure as we go through this process that we're not making it more onerous than than necessary and also I still have a little bit of trouble with the idea of mixing together or blending the economic development with the housing. I personally would love to see the economic development with the housing. I personally would love to see us have more mixed use housing in Lexington with retail and offices and and housing on its own but we know that not all developers or many developers do those kind of developments. One thing I would love to see our city encourage is create a better environment for smaller developers and these are small developers who literally might be just wanting to put up one quadplex or you know a few apartments or a small housing complex. So to kind of put these incentives at this sort of high level and I understand they're incentives right? I understand you can still choose to do one path or the other but if we make the most attractive path also the most perilous path or the most difficult path for some of our especially some of our smaller developers I just fear I don't want this to end up like other programs that we've put out in the past. I mean we've even said with IRBs in the past we've only had that one development over the past however many years. We also ran into this with our infrastructure fund where we weren't we just didn't have people biting at it and we had to kind of make adjustments to make that happen. I don't want for us to kind of put out these recommendations and then have them be too high of a barrier for a lot of people to participate in it. So it's just something that I want to think about as we go forward. I think you bring up Vice Mayor a good point and it's actually one that I asked when we met with a broader group including home builders, affordable housing folks, folks from the League of Cities, attorneys that live in this world and the indication and if I don't want to misquote him but I think if I remember correctly it was Todd Johnson from the Builders Association. We're not going to find one thing that is a solution. This is their view was this is another tool that we can use. There was a bill introduced in Frankfort last time that's probably coming back related to housing that would be more of your typical residential housing and ways to help that. So this is more of our view was this is a component to help move the ball. One that more folks could use. Commissioner Lanter can far better say this than I but there are complexities in trying to mix housing tax credits with industrial revenue bonds. It's almost not doable in many cases. So it's just how can we put different products out there that help us get to the end result that we all want. Yeah and philosophically I very much agree with you. I think we need to make a lot of big and bold plays and maybe potentially unpopular plays to create an environment where we can spur housing development because we're never going to catch up to our 23,000 units short if we don't make some of these big moves. So thank you. Thank you, Chair. Thank you, Vice Mayor. Just some clarity. I've got a quick question. It's just clarity from me. When it's talking about mixed use and then it goes into the project must be mixed use with the creation of jobs on site. Then it starts talking about 20% of proposed housing units, the 80% AMI and then the over 80% AMI. Is that mixed use and those housing options or if you have significant job creation through the mixed use commercial component, does that still give you the opportunity to do the lease back? As drafted, mixed use would be required. Did you all have any conversations about making it or? Because if it's a mixed use and there's significant job creation maybe to a certain number of jobs, a certain percentage, why wouldn't we incentivize that as an IRB if it's creating housing and jobs? We would certainly accept that as a recommendation. It's just as we went through the process, it was considered as both would be happening. Okay. So committee members, I'll just ask you about how you want to move forward. I know some concerns was brought up and brought to the attention but it sounds like there's some willingness and some flexibility to make amendments. So we can move forward this policy and make motions to address what has been brought up and when we report out we can review that ordinance to see if it's something that we want to pass or if it still needs work and put back in committee or we can just leave it in committee. So I mean whatever the committee's pleasure. Vice Mayor. Thank you, Chair. So my question would be if we were to report this out, would that be reporting it out in the regular course of our schedule and in which case when would it hit our docket? So Kevin and I talked about maybe walking it on today but with these changes and some of the issues brought up, I would rather do it in our normal course of business if we move it out of committee today so that would give us time to ask more questions and review and see the changes that get brought to the full council before we have to make a decision. Yeah, I agree with that. Thank you, Chair. Okay. Council Member Baxter. Thank you, Chair and thank you, Craig, for all your work on this. I think it's really important that we engaged as many people as we did early on in the process to make sure that every voice was heard and I think what we've got is a really good starting place. So I'll make the motion to go ahead and move this ordinance out of committee with the understanding that we will come back with added language that matches our AMI rate percentages across the board and any other suggestions that were brought forth today. So moved. All right. A motion was made and seconded to move this forward with changes being made based off of committee discussion. Evan, you got a comment? Yeah, I think there was also a resolution in there as well. Since the motion, it's both ordinance and resolution, so I assume that's what the council member meant in making your motion. I will make a motion to move both forward. All right. Does the seconder agree? All right. A motion was made to move both of those forward with changes being made and presented at the report out and it was seconded. Are there any questions to the motion? Seeing none, all those in favor, please say aye. Aye. Are there any that oppose? Hearing none, that motion passes. Committee members, that brings us to the end of our agenda. If there's no objection, consider this meeting adjourned. Thank you.