City of Covington and Staff Report
The long-awaited redevelopment of 23 acres near the Ohio River moved a big step closer to reality tonight.
The Covington Board of Commissioners authorized the City to borrow the money needed to buy the site, demolish the former Internal Revenue tax-processing facility that dominates 17 of those acres, and improve the property to prepare it for private development.
“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. “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 paid $2.05 million in earnest money toward that purchase.
The ordinance approved by the Commission on a 4-to-1 vote authorizes the City to issue up to $30 million in debt to raise funds to move forward on the massive project.
Meyer and Commissioners Michelle Williams, Tim Downing, and Shannon Smith voted in support. Commissioner Denny Bowman voted against.
Bowman made a passionate speech before the vote, noting how that nearly 60 years ago, the residents of Covington bought the property and sold it to the government for $1 to lure the IRS to the city. Now, after appraisals that even the Mayor himself admitted were “more costly than any of us thought,” Bowman said he could not agree with the idea of residents buying the site again — this time for a whopping $30 million — in an economy fraught with uncertainty, bankruptcy and closing businesses. Plus, there’s also a pension crisis still looming in the future, he noted.
“Why are we doing this?” he asked, saying he thought the site should have been advertised to private bidders. After the federal government provided millions of dollars to the public to help them during the pandemic, Bowman said that with this sale, “I’m afraid they just took it all back.”
Bowman provided the lone dissenting vote. But others agreed it was not an easy decision. Commissioner Tim Downing said in general, his philosophy is to vote against anything that involves the city acquiring property. “But this is a government purchasing from a government,” he said, noting that the commission “has our residents’ best interest at heart.”
Commissioner Michelle Williams agreed, and noted the difficulty as well.
“This really was a hard decision for all of us,” she said. “But this is the right one to move forward.”
Commissioner Smith saw this moment as a springboard for the city.
“Whenever we see an opportunity, we grab it,” she said. “That’s what residents can expect. I think it’s going to make us a destination for businesses.”
Mayor Joseph U. Meyer also saw both sides, saying it was “unfair” for the taxpayers of Covington to have to purchase the property twice. Nonetheless, he explained it was important for the city to be in control of its future, and this purchase will affect the city for years to come.
“We need to buy this property in order to protect the interests of the taxpayers of Covington,” he said. He also described how the city’s recent improved credit rating from Moody’s (the city moved up to A1, or a low credit risk) was done with this purchase in mind, as well as the beginning of the recent pandemic. It all adds up to outsiders looking at the city’s finances and deeming them healthy, he said.
The money would be earmarked like this:
• $18.45 million for acquisition.
• $5 million for demolition.
• $4.05 million for site improvements and contingency costs. Site work would include restoring the street grid, extending utilities and building WiFi infrastructure. Contingency costs would include construction management, an environmental assessment (and addressing any problems discovered), a survey and platting.
• $2.5 million to reimburse the General Fund for money the City paid for public parking as part of the John R. Green project under way in MainStrasse Village. (This will, in turn, be repaid by future revenue from that public parking.)
The good news, City Manager David Johnston said, is that Moody’s Investors Service announced April 17 that it was upgrading the City’s credit rating for the second time in two years.
“Our Finance Department has worked very strategically and aggressively to get our financial house in order, and as a result, they will save taxpayers millions of dollars in financing costs over the life of the debt,” Johnston said.
He said the City was simultaneously developing RFQs (requests for qualifications) for demolition and for environmental and geotechnical assessments.
“We want to get this site ready for market ASAP,” Johnston said. “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.
About the site
The 23 acres sit between Third and Fourth streets just west of the Northern Kentucky Convention Center.
The site became available when the IRS closed the facility last September after serving notice of its intent in fall 2016 to cease operations after 52 years. In late 2018, Covington hired Atlanta-based global architecture and design firm Cooper Carry to help it secure ownership of the site and to create a conceptual master plan – a “vision” – for how it could be developed.
The ‘vision’
Cooper Carry led a year-long effort that relied heavily on market studies, the City’s needs, and public engagement, offering residents and other stakeholders dozens of opportunities to weigh in on the plan.
The “vision” – which Johnston said would serve as a guide for development and can be seen HERE – included a restored street grid, a levee park, a community plaza for festivals, and a mixture of buildings containing offices, retail shops, and places to live.
Goals include:
• Jobs and tax revenue from a variety of workplace environments.
• A mixture of uses and outdoor spaces.
• A walkable and drivable street grid.
• Enhanced connections to the Ohio River.
• Integration with surrounding neighborhoods and business centers.
• A flexible framework to accommodate market demand and proposals.
City planning to help small businesses reopen
Economic Development Director Tom West joined the remote gathering Tuesday to discuss a meeting he’d had earlier in the day with City Manager David Johnston where they discussed how they might help local businesses (like restaurants) as they prepare to reopen May 22.
West said they developed a three-pronged approach, and explained each as much as he could:
1. He said that, in part, because the city has very little staff to devote to the project, they decided to hire a local firm to help promote the businesses and show the public that when they do come back, the environment will be safe.
2. They are developing a task force, made up of decision-makers from city government like Public Works, Solid Waste, Alcohol Beverage Control, etc., just to make sure, as West said, “We’re all on the same page with this.”
3. They are working with a liaison who will specifically monitor the restaurants in the community. West said they will explore looking at Community Development Block Grant funds to possibly reimburse the city for the expenses. “We want to try to have as many of these businesses survive the pandemic and the reopening as possible,” he said. “It’s going to be a tough road.”
Design for Pointe Benton retention basins moves forward
Commissioners approved a request to accept a design proposal from Integrated Engineers for the Pointe Benton storm water retention basins.
Using a FEMA grant of $114,800, the city is considering selecting the engineers from a group of four to design the basins to help mitigate stormwater runoff.
In heavy rains, the area (as well as others across the city) has been plagued with sewer backup and serious flooding. For years, residents have asked what could be done to remedy the situation.
Final design for the project is due Oct. 21, with construction to begin next year. The contract states the project should be finished by March 31, 2021.
Last week, Commissioner Michelle Williams made sure to temper the expectations of residents.
“This will not eliminate flooding,” she said. “It will reduce it. This is just phase one of what’s to come.”
Also Tuesday:
• Commissioner Bowman suggested using some of the city’s stimulus funds to help local restaurants purchase umbrellas and outdoor seating if they need it. He also thought some of the money could go toward creating a COVID-19 testing site somewhere in the city.
• Commissioners approved the purchasing of an automatic tire changer for $31,723.10.
• Commissioners approved the hiring of police applicant Charles W. Beil Ill as a Police Officer Grade VI, which brings the office up to their full 114 authorized positions.
The next regularly-scheduled Covington Commission meeting will be a caucus meeting held at 6 p.m., May 19.
Ryan Clark contributed to this report.
Hopefully they turn it into a public park and let all of the wildlife back into the city. Or they should put solar panels and wind turbines on all of it and make it an eco friendly zone. I dont want to see more over development and buildings. We need less buildings and business and more green space to save the planet and stop global warming.
To keep Covington officials turning into a Clinton foundation, all board members and others who touch the bid should volunteer to have their financial backgrounds checked. Example, 2 employees are worth &250,000 dollars each, and after the job is done are they millionaires?