Bellevue OKs Incentives for Kent Building Development
The Bellevue city council on Wednesday voted to issue industrial revenue bonds and to approve a payment-in-lieu-of-taxes (PILOT) program for the redevelopment of a sprawling, mostly vacant warehouse that is slated to become high-end rental units.
Covington-based Orleans Development has been pursuing the project since late last summer and Wednesday's vote is the latest step forward, following a zone change in December. The project is located on Grandview Avenue, a couple blocks north of Donnermeyer Drive.
The city will issue up to $9 million in industrial revenue bonds, which city administrator Keith Spoelker emphasized would not be a debt obligation for the city. "We're just the conduit here," he said.
Facing pushback from some members of council, Spoelker hyped the project as a catalyst for future growth and revenue, noting that while property tax revenue collected by the city from the building over the next thirty years would be less than it would be without the incentives, the property value of the building and surrounding properties would likely increase. The new residents of the upscale lofts would also be new patrons for area businesses.
The city will be paid roughly $4,500 per year in property taxes, along with the $40 per unit rental fee. There will be sixty-six units.
The payroll tax collected during the construction project will also go into the city coffers, Spoelker said.
He and attorney James Parsons, who frequently represents developers seeking city backing, said that local cities that are experiencing a residential resurgence are seeing the results of their incentives. "Look at Covington," Spoelker said. "It's creating a tax base for the city and we need that tax base. We're landlocked and we have to maximize what we've got. We'll have more people in the city, more people who will spend locally."
Councilman Rodney Poynter, who ended up being the lone vote against the package, said that while he is in favor of the project, he is not in favor of the incentives.
"When you keep coming to the city to give you tax breaks and you require citizens to pay big money every year - every year we've asked the tax payers of this city on real estate tax to give us the 4 percent (increase), we have to have the 4 percent," Poynter said. "We're giving this guy 1 percent on a minimum amount of property. That's not fair."
Parsons said that projects like the Kent Lofts don't happen without incentives because the financing of urban redevelopment projects is challenging.
Poynter was unmoved.
"It's lopsided to me. I don't like that kind of giveaway," Poynter said. "I don't think that we should be following people around who say, oh boy, I want to make some money on that building but the only way I can make it is if you give me tax breaks."
"This comes down to whether council wants this project," Parsons said.
Councilman Steve Brun said that the building won't be contributing any more than it is if nothing happens to it.
"It's been sitting in the state that it's in for decades. We have a really good offer from a company that wants to come in and advance that," Brun said. "Dressing up that area of town, it's going to help all the property values around there."
With the 5-1 vote to approve the tax incentives, and approval of the PILOT program or something similar by Campbell County and the Bellevue Board of Education, Orleans can move on purchasing the building. Parsons said that the developer's efforts to close on the sale could take about two months.
Local projects by Orleans Development include the Boone Block Lofts and others in Covington.
Written by Michael Monks, editor & publisher
Photo: Kent Building in the distance (RCN file)