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City of Covington 2019 year in review: Part 1 focuses on economic development, finance and budget

The City of Covington has provided a ‘year in review’ assessment of 2019. Part one focuses on economic development, which includes laying the groundwork for the redevelopment of the IRS site, plans to reimagine the former YMCA Building as a bourbon distillery experience and expansion of Hotel Covington, and other plans and initiatives. It also looks at City finances and the budget.

Part two, which will run tomorrow, looks at infrastructure, neighborhood investment, events and activities from the past year, and parks and recreation.

Bulldozers on the riverfront. A conceptual plan for the IRS site. A “tease” to a very visible announcement on Madison Avenue. A new neighborhood grant program. Massive crowds downtown. A new economic development strategy. A streetscape project. And record help for small businesses.

Mayor Meyer

The calendar year 2019 came to a close with City leaders almost out of breath from the tsunami of major projects, initiatives, programs and announcements that continue to push Covington forward.

Inside and outside of City Hall, Covington witnessed increasing momentum and tangible progress on major goals, including job creation, neighborhood investment, economic vibrancy, increased trust in financial decisions, and Covington’s reputation as a place where talented people want to be.

“This was the year that we continued to write a new narrative for a city that is moving toward its best days,” Mayor Joe Meyer said. “Looking back on 2019, some of the accomplishments we’re most proud of were completely new decisions, and some built on what the City leaders before us did. Almost everything we’re working on involves partners outside City Hall, and for that we’re grateful.”

But, Meyer said, much work remains.

“We’re not finished,” he said. “We know Covington is still not where it wants to be, and 2020 will see us – for example – further raise the quality of City services and the quality of life of our residents, ‘seal the deal’ on economic development projects under way behind the scenes, and market the city more actively outside our borders.”

So what happened in 2019? Here’s a partial list:


City officials worked throughout 2019 to lay the groundwork for redevelopment of the 23 acre IRS site, just south of the Ohio River. (file photo).

THE IRS SITE: The IRS officially locked the doors on its massive paper-based tax-return processing facility at the end of September, punching a hole in the City’s tax coffers and workforce. But City officials worked throughout 2019 to lay the groundwork for taking advantage of the exciting development opportunity presented by the suddenly vacant 23 acres a block south of the Ohio River. A team led by Atlanta-based consultant Cooper Carry spent 10 months gathering public input, studying the market, and interviewing the development community. Then in December it presented a conceptual master plan that featured a mix of office, retail, housing and public uses with a restored street grid, a levee park and community plaza. Meanwhile, the City ended 2019 in negotiations with the federal government to buy the land.

YMCA BUILDING: Banners teased the site as the potential “relocation of Area 51” and “a Hogwarts satellite campus.” On Dec. 4, the future of one of Covington’s most visible intersections became known: Salyers Group and vR Group were buying the former YMCA building and Gateway Bookstore at Madison Avenue and Pike Street from the City. They plan to spend $22.5 million to turn the site into a “bourbon distillery experience,” an addition to Hotel Covington, and office space. The development will create over 100 jobs, not including potential office tenants.

ECONOMIC TOOLBOX: The City added two tools to its economic development toolbox in 2019 and by year’s end had used both of them to help local businesses: Section 108 loans and federal Opportunity Zone tax credits. The 108 loan program offers federally backed loans of $35,000 to $1 million at low cost to help growing businesses finance things like acquiring land, a building, new equipment and machinery, or just accumulate the working capital they need to grow operations. Meanwhile, five different census tracts in Covington were deemed “Opportunity Zones,” enabling investors to take advantage of several key provisions of the Federal Tax Cuts and Jobs Act of 2017.

This artist’s rendering from developer Salyers Group shows what the redevelopment of the historic YMCA building and its connected structures at Pike and Madison will look like when the Salyers Group and vR Group finish their $22.5 million rehab (file image).

PLACES TO LIVE: Housing options continued to expand in Covington in 2019 as an array of massive projects moved toward various stages of completion: The $50-million 190-apartment RiverHaus complex at 5th and Main streets was all but finished by the end of the year. … Demolition and site work began on the $38-million, 177-unit John R. Green Lofts project on Sixth Street. … The $50-million conversion of 290,000 square feet of office space at Madison Place into 187 apartments got under way. … Site work began on the Covington-Park Hills border for the Park Pointe luxury home community. … Fischer Homes continued to expand the Tuscany community off Ky. 17 with new condos, single-family homes and patio homes. … The ribbon was cut on the Bradford on Scott complex, which turned a former strip club into five condos and five street-level commercial spaces on Scott Boulevard. … The City changed zoning to pave the way for the 10-story tower at 303 Court St. to gain two floors, get a new façade, and be transformed into more than 100 apartments. Late in the year, Kenton County moved its administrative offices from the building and into a new complex anchored by the former Bavarian brewery building on Simon Kenton Way near Interstate 75. Meanwhile, over near the Licking River, the Covington Ladies Home – renamed The Victorian at Riverside – broke ground on an addition that will create 40 new rooms for women.

DOWNTOWN (and ELSEWHERE) ENERGY: Outside of housing, the City saw a plethora of development projects and announcements in 2019, including a $5.5 million commercial building version of “musical chairs” that will bring Icon Marketing Communications to Covington, see ROAD iD renovate another piece of its complex and create about 50 jobs … the opening of the $5 million The Rooftop atop Braxton Brewing Co. … the start of Covington Yard, which will turn ocean containers into an entertainment complex at 401 Greenup St. … Covcor Real Estate Investments’ purchase and ongoing redevelopment of a half-dozen commercial properties in the Roebling Point neighborhood … the ongoing redevelopment of the former Heringer Meats complex on Seventh Street into commercial space … and a host of smaller, neighborhood-oriented places, such as the continued renovation of a former service station into The Standard restaurant in a highly visible location at Fifth and Main streets, the renovation and pending opening of a second Bean Haus location on Greenup Street in Eastside, and the opening of Larry’s bar on West Ninth Street in MainStrasse Village.

One of the startups awarded a rent subsidy during the last round of Small Business Program awards was Gumdrop, right, an extension of Handzy Shop + Studio on Pike Street (provided photo).

SMALL BUSINESSES: The popularity of the so-called Small Business Program continued to expand in 2019, with the City giving incentives to 28 smaller businesses – 17 forgivable loans for façade improvements and 11 rent subsidies to take the pressure off new businesses in their first year. The almost $153,000 in public investment leveraged over $545,000 in private investment and created dozens of jobs, many in neighborhood business districts.

STRATEGIC PLAN: “You’re experiencing a renaissance, but that rebirth is fragile.” That was the assessment of Atlanta-based consultant Garner Economics, which in July delivered a 59-page citywide economic development action plan that recommended ways to turn Covington’s recent economic momentum into long-term, sustainable growth. Among suggestions: Create a manufacturing “makerspace,” incentive programs aimed at recruiting talent, enhanced external marketing, developing more “cool vibe” class and B office space, hiring a business recruiter, and focusing on four industry targets – office jobs, life and biosciences, micro manufacturing and process technology, and the experiential and entrepreneurial economy.

ZONING REWRITE: Covington’s 18-month effort to transform an unwieldy, outdated and expensive Zoning Ordinance into a more user friendly neighborhood development code launched in 2019. The new code will recognize the City’s historic character and better communicate expectations for adaptive reuse, infill, and redevelopment. A steering committee of residents and stakeholders is working with Kendig Keast Collaborative on the effort.


CREDIT RATING: Wall Street signaled its confidence in Covington’s leaders in March when Moody’s Investors Service upgraded the City’s credit rating and issued a “positive outlook” going forward. The agency cited material improvement in the City’s liquidity and reserve position because of stronger financial management, conservative budgeting, and strategic moves to better manage operations. City leaders aggressively sought the upgrade and said it would have practical and valuable impact: It would result in lower interest payments were Covington ever to use bonds to borrow money, and it improves the City’s reputation for financial stability and good public stewardship, which helps in business recruitment.

FINANCE REFORM: Among the evidence Moody’s cited in its decision was the City’s ongoing efforts to modernize, update, and reform its financial operations. In 2019, the Finance Department created a new debt management policy, strengthened its fund balance policy, adopted a 49-page Accounting Policies and Procedures Manual, and adopted a financial management ordinance. The City’s budget also continues to reap the benefits of an expanded investment policy created in 2018. The changes and the addition of staff within the Finance Department helped address some of deficiencies that auditors pointed out in the City’s financial reporting during their review of internal controls. “We want it to be evident and instantly clear to everyone that this is a professionally run department of the highest caliber that does things by the book to be good stewards of the taxpayers’ money,” Finance Director Muhammed Owusu said.

BUDGET: The City in June adopted a $110-million all-funds budget that was balanced, didn’t raise taxes, expanded the so-called Rainy Day Fund, and continued to fund core services like public safety, job creation, business recruitment, neighborhood support, housing, and upkeep of public infrastructure. City Manager David Johnston called it “the consummate ‘status quo’ budget – one that holds the line yet also defends the line.” … this despite the loss of payroll tax revenue from the IRS’ departure, the added burden of extra pension payments to the State, the expiration of a federal grant that funded eight firefighters, and the continued diversion of growth revenue because of past economic deals.

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