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Wed October 17, 2012
21c Hotel Could Have Complete Funding By November
LEXINGTON, Ky. - The 21c Museum Hotel project downtown now has a $1 million dollar loan from the city behind it, but the Urban County Government has more work ahead of it before the project can be realized.
The $36.5 million dollar funding package needed to begin construction of the hotel is closer to becoming a reality, but Downtown Development Authority President Jeff Fugate says the approval of the million dollar loan leaves two more hurdles.
"...a $6 million dollar Pass Through Grant that is underwritten by HUD passes to the city and then to the project and the project pays it back, and then the third piece is the creation of a local TIF," he says.
TIF, or Tax-Increment Financing, is a method of financing that will, in this case, guarantee that 80% of any new tax revenue realized by the project will be funneled back into to the project. Fugate says planners feel confident, but the hotel does involve a calculated risk for the city.
"We feel good about the developers. They've got deep pockets. It helps that they've got a plan in place and their success in Louisville is a good indicator of what their success in Lexington can be," Fugate says.
A public meeting will be held on the HUD grant and the creation of the TIF this month. The council will vote on those in November.