Developer, preservationist clash after hearing on $20M Urban Government Center tax subsidy

LOUISVILLE, Ky. (WDRB) -- A Metro Council committee deadlocked on a public subsidy for the Urban Government Center project, capping a pointed meeting on Tuesday about the much-debated redevelopment plan for city land.

The vote of 2 in favor, 2 against and 2 voting "present" means the ordinance heads to the full council as early as next week with no recommendation.

Tensions then escalated outside council chambers, where a member of the development team got into a physical altercation with an opponent of the tax increment financing (TIF) deal.

The subsidy would give the developers up to $20.3 million in local property tax revenues generated at the site at Barret Avenue and Breckinridge Street after they complete a mixed-use project with a hotel and condos, apartments and office space.

Brian Forrest, who addressed the council on behalf of Paristown Preservation Trust, was being recorded by architect and preservationist Steve Wiser in a third-floor hallway at City Hall moments after the council’s labor and economic development committee considered the TIF plan.

A WDRB News reporter heard commotion but did not witness the incident. In video Wiser shot standing directly in front of Forrest, he asks Forrest about whether he previously made a statement that the project could be built without the public assistance.

"We want to get it on video this time," Wiser says, then proceeds to ask Forrest how many projects he has done using TIF proceeds.

"That doesn’t matter," Forrest responds, then strikes Wiser’s phone with his left hand, according to the footage. The video, which Wiser provided to WDRB, then ends.

The group then moves from the hallway toward the third-floor lobby. Forrest says Wiser needed his permission to record him. Wiser responds that Forrest is in a public place.

"I asked him twice to stop recording, and he wouldn’t stop recording," Forrest told reporters afterwards. "And, yeah, I slammed his phone down. So, easy as that. I mean, I’m frustrated."

"Tensions were heightened yesterday as the project faced yet another delay," he said in a prepared statement on Wednesday. "Mr. Wiser trailed me out of the meeting, capturing my response to his doubts about our team’s ability to deliver. Despite my request to stop recording, he persisted, prompting me to knock the phone from his hand.

"Our commitment to the Paristown Pointe neighborhood is unwavering and we are determined to continue this endeavor by further transforming the neglected Urban Government Center, which we have under contract."

Forrest and the development group have been involved in the revitalization of nearby areas that include Old Forester's Paristown Hall and the Louisville Stoneware site.

Wiser has criticized the Paristown Preservation Trust’s request for the subsidy and is among a group trying to get city officials to change course on the proposal for more than 10 acres in the Paristown Pointe neighborhood. Metro government officials have said they’re not considering an alternative plan put forth by developer Thomas Woodcock.

Speaking to the council, Forrest took aim at what he described as people spreading a "rumor" that the developers could complete their project without the TIF money. He denied that he made that comment at a neighborhood meeting.

"Everything can be done at some point. It just depends on the cash, and we don't have the cash to do this," he said.

Community deal changes before vote

The Metro Council committee debated the proposal for more than 30 minutes before taking a vote. It turned back a motion from Council member Khalil Batshon (R-25^th District) to table the ordinance and discuss at a later meeting.

The TIF funds would be part of a larger financing plan for the estimated $249 million project, which calls for apartments, office building, a hotel with condominiums and a parking garage, as well as townhomes on adjacent land the developers own on Vine Street.

The work would occur after demolishing buildings owned by Metro government and the Louisville Metro Housing Authority. Forrest said demolition work could start soon after getting approval for the TIF, with the entire project being complete in about five years.

The Paristown group has a purchase agreement for the housing authority building on Barret Avenue for $1.7 million. The city would declare the rest of the land as surplus and sell it for $1.

But in order for that to happen, Metro government is requiring a community benefits agreement, or CBA, with "surrounding neighborhood associations." It’s that pact, which includes concessions from the developer, that has been a contentious point over the past two years.

The latest version of the agreement, presented to the council on Tuesday, has several changes and now includes Paristown Preservation Trust’s pledge of $25,000 to nearby neighborhood associations; $10,000 for work at a community garden; and 51 affordable housing units available to tenants making 80% of the Louisville area’s median income, among other things.

But the agreement also says that not all of the five members of the neighborhood group are willing to sign off. As a result, city officials have removed four neighborhood associations from the agreement and left only the Paristown Pointe Neighborhood Association.

Mayor Craig Greenberg's administration believes that move satisfies the commitment to the neighborhoods, according to the current agreement.

"It’s awful," said Doug Magee, who had represented the Phoenix Hill Neighborhood Association in the negotiations "I mean, I've been involved in these kind of things for almost 50 years. … This is the worst I've ever seen the city treat neighborhoods."

"It’s just a totally bogus move," said John Gonder, president of the German-Paristown Neighborhood Association and a previous member of the neighborhood negotiating group. "You don’t like the results of what you’ve got? You change the partner."

At least two people involved in those negotiations over the years – Gonder and Shannon Musselman, a past president of the Paristown Pointe Neighborhood Association -- said they were told early on by then-Metro Council member David James that the neighbors had to reach an agreement before the development could proceed.

Gonder said Wednesday that he recalled James saying to the group at a dinner at Sarino on Goss Avenue: "It boils down to no CBA, no TIF."

James, now a deputy mayor, did not immediately respond to a request for comment Wednesday.

Added to the new agreement are entities that previously have been tied to the project.

Bates Community Development Corp., and Highland Community Ministries would now sign the deal. Bates was described as "partners" in the project by Paristown Preservation Trust’s Steve Smith in 2021. Bates officials were in attendance in support of the TIF ordinance at Tuesday’s meeting at City Hall.

Jeff O'Brien, executive director of the city's economic development cabinet, defended the new agreement, telling WDRB on Wednesday that Highland Community Ministries "is not a partner in the development – again, as far as I'm aware." He called the organization "a direct neighbor."

Highland Community Ministries announced in 2022 that it planned to build 70 senior affordable housing units as part of the development. Its executive director, Troy Burden, did not immediately respond to a phone message on Wednesday.

O’Brien said he believes "there is some benefit that's going to the Bates Community Memorial Church. I don't believe it's going to the (Bates) Community Development Corp."

In recent years, Metro government has begun to require the community benefits arrangements on projects that involve public land or other subsidies. Because the initial neighborhood groups don’t want to sign the agreement, O’Brien said the changes are an attempt to meet the "spirit and intent" of the city’s commitment to the neighborhoods.

"This has not played out the way that we thought it was going to play out," he said.

Metro Council committee gives no recommendation

The Metro Council committee focused on the TIF request, which would rebate local property taxes of up to $20.3 million to cover what O’Brien called a "gap" in the Urban Government Center’s financing plan.

The 10-plus-acre site now generates about $3,000 in property tax revenue annually, he said. Once the development is built, the site would create about $1 million per year in tax revenue for local government coffers, according to projections.

"That’s how our TIFs are structured. It requires performance by the developer," O’Brien said. "It puts minimal risk on Metro government."

Council members Dan Seum Jr. (R-13) and committee vice chair Robin Engel (R-22) both questioned O’Brien about whether the TIF was necessary for the project. In particular, Engel noted that the TIF district around the Lynn Family Soccer Stadium is largely undeveloped.

"We throw these TIFs around anymore these days like it’s chump change," Engel said.

But Council member Brent Ackerson (D-26^th), a vocal critic of some previous TIF plans, argued that this proposal is different and makes financial sense. "I've got a plan in front of me that even I – ‘Mr. No’ -- believes it and recognizes the numbers work," he said.

The tie vote means that the ordinance moves to the full council without a recommendation.

"I think that there's still some work to do on the developers’ end to answer the questions that the Metro Council members were raising yesterday at the committee," O’Brien said.

"That's the piece that they and we need to be focused on if we want to have success on this deal," he said.

Correction: A prior version of this story reported that the committee vote meant the ordinance moved to the full Metro Council with a "no" recommendation. It has been changed to reflect that the ordinance advanced without a recommendation for or against passage.

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