Commissioners approved a municipal order at Tuesday’s city commission meeting, entering the City of Owensboro into a $4.6 million public-private incentive agreement with Riverfront Brio, LLC. Those funds will go toward the upcoming hotel-apartment complex that will be built across from the Owensboro Convention Center.
Formally announced yesterday, City Manager Nate Pagan said the incentive agreement, a public-private partnership, requires Riverfront Brio to complete a building that holds 120 hotel rooms, 186 residential units and a 400-space attached parking garage.
Because of two different TIF (tax increment financing) revenues that Owensboro will be reimbursed for, the City will incur no additional debt as a result of the $4.6 million incentive agreement. The incentive will go toward the unnamed hotel’s parking garage, located beneath the hotel rooms and residential apartment complex. The funds for this incentive came from the downtown parking garage project, which came in under budget.
“The incentive will be paid for with funds currently on hand, so no new debt will be issued,” Pagan said. “The funds will be restricted and must be used for a transportation-related purpose, so parking is an appropriate use.”
Because the TIF funds cannot be used to purchase property, Pagan said the revenue must be used for parking. Pagan also said state and local TIF revenues will reimburse the City for funds used toward the project, as confirmed by City Director of Finance and Support Services Angela Hamric in an earlier statement.
“We are confident the TIF will generate more than sufficient funds to do so, so the incentive will not have an impact on the City’s general fund,” Pagan said.
The third hotel is not eligible for the State Tourism and Development Incentive Program because of its location in the downtown TIF district. Furthermore, the City will have to sell the property at Roberts Brothers Automotive, which they recently acquired to fulfill a need for downtown parking.
“We will sell the property at the same price that we paid so the City will be made whole on that transaction,” Pagan said.
City Commissioner Larry Conder even prompted other developers interested in contributing to local economic development projects to step forward and pitch their ideas.
“If you have another project, bring it on,” Conder said. “We’d love to see other things done in our community. We’d love to see other things grow and build our tax base in a bigger and better way.”
Mayor Tom Watson recognized Gulfstream Commercial Services CEO Matt Hayden and his partners for taking on the large amount of debt they’ve incurred due to their role in developing public infrastructure and allowing Owensboro to receive TIF revenue from their projects.
Watson spoke candidly about the City’s need for a third downtown hotel and addressed negative feedback he and the other city commissioners have received via social media for their involvement in downtown development.
“This wasn’t something we entered into lightly,” Watson said. “We spent about 20 Friday afternoons and a lot of redline contracting — countless hours — trying to make sure this project qualified for TIF reimbursement, to make sure we were doing the best we could as stakeholders for the taxpayers’ money, and that’s critical to this commission.”
Watson said the Owensboro-Daviess County Convention & Visitors Bureau suggested downtown Owensboro needed at least 400 hotel rooms to attract larger conventions, so getting over the 350 hotel room threshold was one step closer to the goal.
“An additional 120 rooms will put the convention center in a position to compete for the larger conventions,” Watson said. “This certainly will give us an opportunity to have a seat at the table.”
Watson also noted that, in order for the project to work, human density in the downtown area would be a crucial factor. According to Watson, 350 hotel rooms in the convention center’s vicinity will lower the City’s subsidy rate between $70,000 and $150,000 a year. Watson also said it would improve revenue for local businesses and contribute to additional tax revenue.
“We’re taking a piece of blighted property and putting up a landmark,” Watson said.