One Park deal includes less affordable housing than developer pledged

LOUISVILLE, Ky. (WDRB) -- Near the end of a contentious, six-hour meeting in 2019, the developer proposing the One Park project near Cherokee Park made a pledge to the Louisville Metro Planning Commission, which was wrestling with whether to green-light the project.

Kevin Cogan, of Jefferson Development Group, whispered the pledge to his lawyer, Bill Bardenwerper, as the planning commission's Sept. 30, 2019 meeting stretched past midnight.

Cogan, a builder of luxury complexes, said he would agree to rent 10% of the new apartments at One Park at prices "affordable" for low-income families if Metro government were to award a special tax-increment financing, or "TIF," subsidy for the massive development at Grinstead Drive and Lexington Road.

"What Kevin has said he'd do, if the city ends up deciding this is eligible for a TIF, we'll do the 10%," Bardenwerper told the commission.

Four years later, the Metro Council is about to consider the TIF subsidy that Cogan wanted, which would be worth up to $114 million for Jefferson Development Group over 30 years.

But the deal negotiated by Mayor Craig Greenberg's administration doesn't hold the developer to the 10% affordable housing commitment made in 2019.

Cogan, through a representative, said the 10% threshold is no longer feasible because, among other factors, interest rates and construction costs have "increased substantially since 2019."

Greenberg administration officials cited those same factors in explaining the terms they negotiated with Cogan's group.

Jeff O'Brien, executive director of Metro government's economic development cabinet, October 3, 2023 (*WDRB photo*).

"As we look at the changing landscape, I mean, construction costs are way up; interest costs are way up. And so I think ... that's going to drive how this project gets done," said Jeff O'Brien, executive director of Louisville Metro's Cabinet of Economic Development.

One Park would be one of the biggest developments in Louisville history — a $554 million mix of apartments, offices, stores, restaurants and a hotel in various buildings up to 18 stories tall. It comes at a time when Louisville faces a severe shortage of housing that is affordable for low-income households, and policymakers like Greenberg have said the city needs more affordable units in all neighborhoods.

The proposed $114 million subsidy, which must be approved by Metro Council, would require that Jefferson Development Group make 7% of the estimated 600-700 apartments at One Park affordable, using guidelines for income, family sizes and rents established by the federal government.

Regardless of whether any subsidy is approved, the developer is already required to make 5% of the units at One Park affordable, a concession that was tied to the zoning changes needed for the project.

The Planning Commission never got Cogan's pledge for 10% affordable housing in writing. The commission is involved in zoning issues, but tax-increment financing deals are negotiated separately by the mayor and Metro Council.

O'Brien said the 7% requirement is "workable" and that the absolute number of affordable units at One Park will be more than originally thought because Cogan has increased the residential component of the project.

"We're going to be getting about 50 units of affordable housing here, which, for the Crescent Hill and Cherokee Triangle neighborhoods, is a significant number," O'Brien said.

Not everyone is convinced.

Tony Curtis, director of the Metropolitan Housing Coalition, a group that advocates for affordable housing, said it would be "unacceptable" for Louisville Metro to deviate from its own guidelines, which state that 10% affordable housing is a "goal" for residential developments with a TIF subsidy.

"I think we should go back to the table and say, 'We need 10%," he said. "Ten percent is the minimum we should be asking for here."

Under the proposed deal, Cogan's group would have another route to get the $114 million subsidy without providing any additional affordable housing than already required. The agreement says 7% requirement would decline to 5% if Jefferson Development Group writes a check to the Louisville Metro Affordable Housing Trust Fund, which provides support for modestly priced housing developments.

The buydown would cost the developer $1,031,520 if 700 residential units are built at One Park — or about $1,474 per unit if fewer than 700 are ultimately built.

While contributions to the affordable housing trust fund are needed, Curtis said the Cherokee Triangle area is particularly short of affordable units — and now has even fewer after the private Louisville Collegiate School fought to demolish aging apartments for a parking lot.

"For this (One Park) project, we need the units, and we need the units in this project," Curtis said.

Metro Council member Andrew Owen, whose district includes the site of the proposed One Park, said for the council to approve the TIF deal without holding Jefferson Development Group to the 10% commitment would risk "losing public trust" in the planning and zoning process.

"If you say that in a public meeting where there are 400 people there, then it's something I think you should live up to," Owen said.

Louisville officials plan to conduct a legally required public hearing for the One Park subsidy deal at 6 p.m. Monday

The Metro Council, which will make the ultimate decision, will begin considering the subsidy deal at its Labor & Economic Development Committee meeting on Tuesday.

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