LOUISVILLE, Ky. (WDRB) -- Metro Council approved an ordinance establishing a tax increment financing (TIF) district for what will be the new boutique hotel in NuLu called Bunkhouse.
Stephen Wendell, CEO of Mountain Shore Properties, said the $30 million project would not be possible without the added incentives on the state and local levels. The plans include six stories with 122 rooms, a restaurant, two bars and a mini market right next door to Galaxie on East Market Street.
Bunkhouse is a joint venture of Mountain Shore Properties and the founders of Rabbit Hole Distiller, which is just behind the hotel on East Jefferson Street. Wendell said the group can now move forward with finalizing plans, with the hope of starting work on the foundation in September.
“The TIF gives a green light, but this means we still have to get all the city approvals,” Wendell said.
In an effort to make sure the hotel will be a good neighbor, Metro Council members — along with the developer and community leaders — agreed on adding a new element to this TIF called a Community Benefits Agreement. The hotel is committing to three plans of action that will benefit the Phoenix Hill neighborhood and Louisville as a whole.
“This is a first for us,” Wendell said. “And I think this is probably the first time that it’s ever been attached to a TIF.”
As part of the agreement, the hotel commits to sourcing its goods, furniture, art and food locally. This is something that Wendell said Bunkhouse, the hotel management company, does in its other markets and was intending to do for the NuLu hotel.
The hotel is also committing to hosting a job fair, hiring locally and creating a hospitality school. The hospitality school will train incoming employees, but it will also provide an opportunity for people to gain new skills for future endeavors.
“They will go through our school, and hopefully, they’ll want to work with us at the Bunkhouse," he said. "But if they don’t, they’ll be ready to work at other hotels and in hospitality in the city. If you’re in hospitality at all, you’re very aware that labor is an issue right now. So part of that is people aren’t being trained. And now, we can help with that."
The third part of the Community Benefits Agreement is establishing an affordable mini market, which will be on the first floor of the hotel and open to the public. The hotel is also committing to create a no-waste facility by connecting with a local organization to supply food to a pantry.
“We will work through the market and through the restaurant with a nonprofit to help provide food for the houseless and the food insecure in the area,” Wendell said.
The ordinance, approved by Metro Council last week, created a TIF district for the hotel, which redirects most of the new tax revenue generated by the hotel back to the investor group. It will be capped at $1.8 million over the next 20 years.
“And then after the 20th year, obviously, whatever the taxes are, we pay them in full," Wendell said. "And the city reaps the benefits of that. So it’s a way for the city to be a part of the project by giving an incentive to put us in a better situation to do it."
With the TIF finalized, Wendell said Bunkhouse is one of the more unique projects he has worked on because of the addition of the Community Benefits Agreement. And Wendell said he was glad to work with Metro Councilman Jecorey Arthur, who was looking out for his constituents, in order to negotiate the unique agreement that will incentivize the development and support the community.
“We’re very excited to be here and to be part of this community with this project,” Wendell said. “I think you’re really going to see big growth over the next 10 years, over the next five years in Louisville. And we’re just excited to be a very small part of that.”
Earlier this year, the state approved $500,000 in sales tax rebates on construction materials for the project.
The AC Marriott Hotel, which was built across the street in 2018, also received a 20-year term for its TIF district.
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