Bowman Explains Opposition to Covington's IRS Purchase
The Covington city commission approved a plan last week to borrow the necessary funds to purchase the former site of the city's IRS processing center, which closed and vacated the premises.
The city paid $2.05 million in earnest money toward the purchase and last week, authorized the issuance of up to $30 million in debt to raise funds to move forward on the hoped-for redevelopment of the site.
The city commission voted 4-1 to move forward, with Commissioner Denny Bowman the lone dissenting voice.
"I strongly believe the IRS site will have a great future in time," Bowman said. But the commissioner, who also served two different stints at the city's mayor from 1988 to 2000 and 2008 to 2011 before being elected to a two-year commission term in 2018, said that the city was treated unfairly by the federal government and Kentucky's delegation to it.
"Back in the early sixties, the City of Covington spent nearly $5 million to purchase the land from homeowners, then tore down the property and fixed infrastructure and sold the land to federal government for the IRS site for $1, without any agreement to take land back if abandoned," Bowman said in a statement to The River City News.
Bowman said that the city-hired appraisers valued the riverfront property, which spans nearly 23 acres, most of which is occupied by what is known as the flattop IRS building, at $8 million. The federal government, which owns the site, hired its own appraisers who came back with a value of $21.8 million, Bowman said.
"Six years ago the city borrowed $14 million and now another $30 million plus roughly $1.5 million upfront cost," Bowman said. "This is one of my many reasons and great concern borrowing this amount of money."
Bowman stated that the economy is in a recession and unemployment is up because of the COVID-19 pandemic. "Bankruptcies, businesses closing, revenue shortfalls are all possible along with continued pension increased cost," he said. He called now the wrong time to increase debt.
Bowman said that City Manager David Johnston recently talked about the city's financial difficulties brought on by state-mandated increases in pension contributions, which could ultimately impact staffing levels.
"I believe this site should have been advertised to open private sector bid. Zoning ordinances are used for these types of development," Bowman said. Neighborhoods would be a better target for such an amount of funding, he said.
"The federal government should consider the reasons mentioned and come down to a reasonable and fair price," Bowman said.
"This is clear evidence of the city's commitment to move promptly on the redevelopment of a project that will shape downtown Covington for decades," Mayor Joe Meyer said in a news release after the vote. "And the timing is good - the city's recent credit upgrade will help make borrowing more affordable."
After four months of negotiation, the federal General Services Administration in March accepted the City's offer of $20.5 million for the site, which one East Coast commercial developer referred to as one of "the most exciting land redevelopment opportunities between Baltimore and New Orleans," the city said in an announcement.
"We want to get this site ready for market ASAP," City Manager David Johnston said in the announcement. "It is not our goal as a city to own or hold on to privately developable property. Thus we're not going to be lethargic in our actions."
Speed is doubly important because the proceeds from future sales of various portions of the site - once the building is demolished and public infrastructure is added - will help the city recoup its investment, he said.
The IRS ceased its operations there last September after 52 years.
The vision for the site calls for a restored street grid, eliminated with the development of the IRS facility, as well as a levee park, a community plaza for festivals, and mixed-use buildings for commercial, office, and residential spaces.
-Michael Monks, editor & publisher