Concerns raised over Kentucky’s sale of bridge properties
More than one month after tentatively accepting bids for three properties bought as part of the Ohio River Bridges Project, the Kentucky Transportation Cabinet has yet to submit the offers for final approval
LOUISVILLE, Ky. (WDRB) – In mid-October, Kentucky appeared to move closer to selling three properties it bought to meet preservation goals of the Ohio River Bridges Project.
State officials tentatively accepted three offers for two houses in eastern Jefferson County and a former cold storage building downtown. The would-be buyers were told their bids still must be approved by Kentucky Finance Secretary William Landrum.
But more than a month later, the Kentucky Transportation Cabinet has yet to take the next step and send the offers to Landrum’s office.
The delay has raised concerns from at least one of the successful bidders, the Denton Floyd Real Estate Group, which plans to convert the Grocers Ice and Cold Storage Co. building on East Main Street into apartments.
“Our firm has been ready to enter into third party contracts with some consultants and contractors for a few weeks now, so we are a little concerned about the delay on a final approval of the bid,” Brandon Denton, a company co-founder, said in a text message.
Denton said the company is further ahead on its planning and wants to move the start of construction to early 2018, instead of late next year. The state accepted a $400,000 bid on October 10 for the building a block from Louisville Slugger Field.
At the time, Denton was told by Transportation Cabinet official Mark McCoy that a final decision on his offer could be made within a week. “This will be something that should move to the front of the stack,” McCoy said. “I’ve already made those connections and put things in queue for this.”
The previous estimates of how quickly a decision might be reached were “a bit ambitious given the unique complexities of these properties,” Transportation Cabinet spokeswoman Naitore Djigbenou said in an email. “KYTC is finishing up its internal due diligence, preparation and legal review of the completed transfer documents for the properties.”
In all, Kentucky has reached agreements in principle to sell three properties it bought for $13.5 million to comply with a historic preservation plan for the bridges project. If the sales go through, the state will recoup $2.43 million of its original investment.
The Transportation Cabinet denied WDRB News’ request for appraisals of the properties through an open records request, saying they “will be publicly available after the execution of a deed.”
The two houses – the Rosewell and Drumanard estates in eastern Jefferson County – include provisions that allow previous owners to be able to match the bids received last month.
“I’m just still waiting patiently,” said Steve Fox, who bid $1.625 million for Drumanard, the estate above a tunnel leading to the eastern Lewis and Clark Bridge.
Fox said he only learned after the October bid opening about the first right-of-refusal clause, which is enshrined in the 2003 federal Record of Decision approving the project. In an interview, he said he believed the state’s bid documents should have mentioned it.
He said he understood that the previous owners had 30 days to submit an offer.
Djigbenou did not immediately respond to an email Monday asking about the status of Rosewell and Drumanard and whether those properties’ prior owners contacted the cabinet about making an offer.
In the case of Drumanard, the state paid $8.3 million for the property in 2012 – more than $5 million above the price the Soterion Corp. paid in 2000.
It then rented the house to Soterion, only to later evict the former owners for failing to pay rent. The Transportation Cabinet later filed a lawsuit alleging that it is owed $34,516 in unpaid Jefferson County property taxes and $21,600 in late rent.
The case, filed in 2014, is pending in Jefferson Circuit Court.
Reached by phone Monday, Rabbi Boruch Susman said he also has not heard from state officials about the winning $400,001 bid for Rosewell submitted by the Chabad Chai Center last month.