Developer Steve Smith

Developer Steve Smith joined by Rev. Bruce Williams and Al Cornish of the Bates Community Development Corp., August 3, 2021.

LOUISVILLE, Ky. (WDRB) -- The losing bidder for the old Urban Government Center revitalization plan is calling on Metro government to break off talks with the developer chosen last year and consider its proposal instead.

Developer Steve Smith said Tuesday that Underhill Associates, which was selected last fall to craft an agreement with Mayor Greg Fischer’s administration, has had enough time to reach a deal.

“They can't close their funding gap,” Smith said at a press conference near the site in the Paristown Pointe neighborhood. “And what we're saying today is: Enough is enough.”

Underhill has asked for a portion of the city’s federal coronavirus relief funds or a direct budget appropriation to fill an estimated $13.7 million gap in its $58.9 million plan. Louisville Forward, the city agency overseeing the negotiations, told Underhill in May that it didn’t support that idea.

It gave Underhill a June 14 deadline to submit a new approach that didn’t rely on American Rescue Plan or budget dollars. Underhill declined, arguing in a letter that it would be “premature” and “shortsighted” to abandon that approach.

In choosing to begin talks with Underhill, Metro government agreed last November that it could negotiate with Smith’s group if it wasn’t able to reach an agreement with Underhill. There is no deadline for Louisville Forward to make a decision on the Underhill proposal, spokeswoman Caitlin Bowling said.

“Underhill Associates was selected for negotiations in 2020, and we continue to negotiate with them,” she said. “It is a complicated project and a complicated site; these negotiations take time. We cannot comment further at this time.”

Smith, the managing partner of Paristown Preservation Trust, has been involved in redevelopment projects nearby and is the owner of Louisville Stoneware.  

Speaking to reporters, Smith said his group could finalize a deal in weeks and begin construction within a year.

And he claimed that Underhill violated the terms of the city’s request for proposals. That request said that the chosen developer is responsible for financing the entire cost of the project, “through its own equity, borrowing, tax credits, governmental incentives or other sources of funds.”

Smith also took issue with the prospect of the city giving federal funds or budget money to Underhill.

“It's irresponsible and unconscionable for the city to give cash funds of the magnitude that is being requested with no guarantee of outcome,” Smith said.

Underhill president Jeff Underhill wrote in a text message that a press release issued by Smith’s group has “many” false claims and is “full of misdirection.” In a subsequent email he said his company has asked for public financing since it made its proposal. 

The city's "application clearly asked if we were seeking financial involvement by the city. We responded 'yes,'" Underhill wrote. 

Smith’s Paristown Preservation Trust and Underhill were the only two groups to make formal proposals for the 10-acre site bounded by Barret Avenue, Breckinridge Street and Vine Street. There are four buildings on the site once used as government offices, including the seven-story former Kentucky Baptist Hospital.

Paristown Preservation Trust called for a mix of uses there, including office space, apartments and a possible boutique hotel. A feasibility study would determine if the aging hospital building could be incorporated into the project.

“I'm representing a group that's willing to spend $150 million on this site, with zero cash allocated from city coffers,” Smith said Tuesday, although he acknowledged his group could pursue tax-increment financing – a public incentive that rebates some tax revenues to developers for public infrastructure costs.

He was joined by Rev. Bruce Williams and Al Cornish of Bates Community Development Corp., which Smith said are “partners” in the project. Bates is not mentioned in Paristown Preservation Trust’s proposal, but Smith told a reporter that the group was included in the final plan that a Metro government selection committee evaluated.

The Fischer administration has tried to redevelop the site since 2017. Its initial developer backed out in late 2019 amid allegations that the city failed to secure land-use approvals it had promised. That led to the ongoing effort that began in 2020 and resulted in Underhill’s tentative selection.

Jecorey Arthur, the Metro Council member whose 4th District includes the old Urban Government Center, said Tuesday that as a city legislator he isn’t taking a position on Louisville Forward’s negotiations with Underhill.

His chief concern, he said, is that there is a public benefits agreement with the neighborhood association or residents if any public dollars are used in the development.

Meanwhile, there is no consensus in Paristown Pointe about how the property should be developed.

In June, members of two neighborhood groups urged city officials to consider new approaches for the property, including breaking it into smaller parcels. Other residents want Metro government to finalize a deal with Underhill, which has long touted a high level of neighborhood support.

Cindy Pablo, a former neighborhood association board member who attended Tuesday’s press conference, said she supports Smith’s plan in part because it could happen quickly.

“A year from now, there could be something happening here,” she said.

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