Tweak in U of L tax district means millions for Germantown apart - WDRB 41 Louisville News

Tweak in U of L tax district means millions for Germantown apartment project

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Germantown Mill Lofts Germantown Mill Lofts
Jeff Underhill of Underhill Associates Jeff Underhill of Underhill Associates
LOUISVILLE, Ky. (WDRB) --  At first glance, the conversion of the old antique mall in Germantown into loft apartments doesn't appear to have much, if anything, to do with the University of Louisville.

But a small expansion of the special taxing district that surrounds U of L's Belknap campus could mean millions of state tax dollars for Underhill Associates, the developers of the Germantown Mill Lofts at the Goss Avenue site.

The Metro Council is considering a request from U of L to tweak the boundaries of the 800-acre taxing district -- in part to help the Germantown apartment project qualify for about $4 million in Kentucky tax credits, according to officials with U of L and Underhill Associates.

The key, said Colin Underhill of Underhill Associates, is to bring U of L's special taxing district within half a mile of the Germantown project. The old antique mall is seven-tenths of a mile from the current boundary of the tax district, he said.

Getting within half a mile of the tax district would make the Germantown Mill Lofts project eligible for a generous, temporary tax credit Kentucky lawmakers approved earlier this year for rehabilitating historic buildings.

The credit would be worth about $4.5 million – or 20 percent the roughly $23 million cost of converting the antique mall into apartments, Underhill said. Without the change, the project would get only about $160,000 in state historic preservation tax credits, he said.

“It's a huge deal, in order to get this done,” Underhill said.

Kathleen Smith, chief of staff to U of L President James Ramsey, told the Metro Council budget committee Monday that part of the reason for alter the boundaries of the tax-increment finance district – or TIF – was to “assist” Underhill Associates with the Germantown project.

(The TIF allows U of L to recoup a portion of new tax revenues generating inside an area around the Belknap campus. See the proposed TIF boundaries here.)

While it's “not critical” to U of L, the Goss Avenue project could still benefit the university in some way, Smith told the council committee.

“The opportunity for our faculty to live near campus and bike, or walk, to work would be very nice,” she said.

The antique mall, which was once a cotton mill, dates to 1889. The Underhills are converting it into 184 one- and two-bedroom apartments renting from $750 to $1,250 per month.

Underhill said the developers “need” the additional $4.5 million in state money to finish the apartment project, which has cost more than they planned.

“The project is such a huge undertaking. When we originally started, we anticipated a $15 million renovation. (In fact) that is a $23 million project,” he said.

Yet, work on the Germantown apartment project started last October, and Underhill would not say what would happen if the developers do not get the additional $4.5 million in state money. Would they really abandon the project?

“We probably wouldn't finish in the way we originally envisioned it,” Underhill said, declining to elaborate. “I don't know the answer to that. I haven't crossed that bridge yet.”

The council budget committee approved the reconfigured TIF district Monday morning, and the full council could sign off on it at its meeting today at 5 pm.

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