Long-debated Urban Government Center plan awaits key Metro Council vote

LOUISVILLE, Ky. (WDRB) -- More than eight years ago, then-Mayor Greg Fischer's administration began seeking input on what to do with roughly 10 acres at Barret Avenue and E. Breckinridge Street once home to government offices.

Rather than selling the publicly owned land, it began a city-led redevelopment process for the old Urban Government Center site meant to reflect neighbors' priorities. That approach has failed to result in any new construction as taxpayer-borne costs for the vacant land continue to mount.

But Metro's third developer could take a pivotal step forward Thursday, when the Metro Council considers a $20 million public tax subsidy – one of the last remaining approvals needed for Paristown Preservation Trust's $249 million plan for a hotel, apartments, condos and office space.

The council vote will cap months of tension over public funding, site plans and buy-in from surrounding neighborhoods. The acrimony peaked in June, when development team member Brian Forrest clashed with Louisville architect and project critic Steve Wiser, smacking Wiser's phone out of his hand while he was questioning Forrest in a hallway outside council chambers.

Since then, Wiser and other project opponents have threatened legal action if the council approves the tax increment financing (TIF) subsidy.

The TIF ordinance deadlocked in June in the council's labor, economic development and appropriations committee on a vote of 2-2, with two members voting "present."

It moved to the full council but was later sent back to the committee, where last week it passed 6-0 after several changes were made.

The plan

Metro's first developer, Marian Group, walked away from the project in late 2019 amid frustrations with city efforts to get needed land-use and other approvals. Metro officials chose a new firm, Underhill Associates, in 2020 but ended that deal a year later and moved to a third developer, Paristown Preservation Trust.

Paristown Preservation Trust has proposed building up to 450 housing units that would include a mix of apartments and condominiums. An "affordable housing" piece requires at least 51 units for households making 80% of the Louisville area's median income — for example, $54,000 for one person and $69,400 for a family of three.

Also planned are 20 cottage homes on land the trust already owns on Vine Street; office and commercial space; a 100-room hotel; and a parking garage with 850 spaces.

The TIF would let the trust get $20 million in rebated local property taxes once it achieves minimum targets for each part of the development.

If the council approves the TIF ordinance, Mayor Craig Greenberg's administration would need to also get city legislators to declare the property surplus so it could sell it to the trust for $1.

In addition, developers would need to secure other demolition and construction permits for the site.

The trust intends to raze the old Kentucky Baptist Hospital building and other structures, using state tax credits to help pay for the environmental and demolition work.

It would save a former steam plant and smokestack.

'Community benefits agreement'

In picking its third developer for the project, Metro government required a "community benefits agreement" among the city, Paristown Preservation Trust and five surrounding neighborhood associations.

Finalizing that deal, however, has been a sticking point for years.

Neighbors who were negotiating the finer points of the agreement were removed from their positions in June and replaced with members of the development team. Only one of the five neighborhood associations — Paristown Pointe — signed the pact.

Members of the neighborhood committee accused the city's economic development cabinet of a last-minute switch "as a valid substitute for the grassroots efforts with which Metro tasked us," they wrote in an open letter.

The development agreement required the city to enter into the agreement with the "surrounding neighborhood associations" before selling the property for $1.

Jeff O'Brien, executive director of the economic development agency, told Metro Council members this month that the benefits agreement signed by the trust, Bates Community Development Corp. and Highlands Community Ministries resembles what was started by the neighborhood groups.

"We have a community benefits agreement that we've committed to, and I think it's largely what we negotiated with the neighborhoods," O'Brien said in remarks to reporters September 10. "It's unfortunate we didn't have everybody sign onto that, but I think this largely meets what we discussed in those meetings with the with the neighborhood groups."

The neighborhood representatives said in the open letter that two main areas weren't accepted: Enough affordable housing and green space. They also argued that the TIF, which would divert some property tax revenues to the developer and away from city coffers, is "extractive and problematic."

Critics have assailed the city's approach, especially because Bates and Highland have connections with the development itself.

Bates was described as "partners" in the project by Paristown Preservation Trust's Steve Smith in 2021. Bates officials attended at least one council committee meeting — in June — in support of the TIF ordinance.

Highland Community Ministries announced in 2022 that it planned to build 70 senior affordable housing units as part of the development.

"I don't understand why we're here today trying to vote on a subsidy for something where the agreement hasn't been signed with the community," Thomas Woodcock, a developer who has put forth an alternative proposal, told the Metro Council last week. "They wrote the rules. Now they just don't want to follow them."

Litigation threat

In late July, some opponents of the current plan warned that they will consider legal action if the project moves forward.

They argue that the Metro government has let the trust change its plans in violation of the initial request for proposals.

O'Brien said the plans are "substantially similar" to what the developer submitted in response to the city's request for proposals and also what was approved when the land was rezoned in 2023.

"I'm not going to speculate on what lawsuits might be coming at us," he told council members on September 10. "Again, we've evaluated this project with the county attorney."

The Metro Council meeting starts at 6 p.m. Thursday.