Metro Council OKs plan to send up to $114M in Louisville taxes back to One Park developer

A development pitched as a transformational project in Louisville is now in line to land millions of dollars in future tax revenue from the city.

In a 17-7 vote, Louisville Metro Council members voted Thursday to approve a tax-increment financing (TIF) plan for the proposed One Park commercial and residential plaza, with a tweak to the plan to increase the amount of affordable housing.

The proposed TIF calls for redirecting 80% of local tax revenue raised at the complex over the next 30 years to Jefferson Development Group, the project's developer, with a cap at just over $114 million.

It's a big number, but the $554 million project's impact on a well-traveled Louisville block near Crescent Hill and the Highlands would be massive. One Park calls for separate 18- and 10-story towers to be built on seven acres at the intersection of Lexington Road and Grinstead Drive, with plans for apartments, office space and retail along with a restaurant, grocery and hotel.

A plan without consensus

The blueprint for the One Park plaza was initially given the green light in 2019, with an addition approved earlier in 2023, after years of debate about its size and services. The plan, put forward in 2016, was scaled back throughout that process.

The financing proposal, meanwhile, was first introduced to Metro Council in late November. It was sponsored by council President Markus Winkler, who pitched One Park as a "transformative project for the city" that needed some form of public investment to be built.

The proposal, though, did not have the support of Metro Councilman Andrew Owen, who represents the district where One Park would be built. Owen said he was not consulted by the city while the TIF was being put together, while Pat Mulloy, deputy mayor of economic development, later apologized at a committee hearing and said it was unintentional.

At Thursday's meeting and in comments beforehand, Owen said he is in favor of the project but against public financing.

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He delivered that message at last week's Labor and Economic Development Committee meeting, telling its eight members the project had support among his constituents despite concerns when it was rolled out years ago. He added the area where it's planned doesn't meet the qualifications for a TIF. The committee eventually voted to recommend the project for Metro Council approval on a 6-2 vote.

Jefferson Development Group was also criticized by some in recent weeks for scaling back the amount of affordable housing (apartments estimated by the city to be rented at about $1,200 per month) included in the proposal. Its attorneys had pledged in 2019 to set 10% of all One Park South units at affordable rates, but the initial ordinance cut that figure to 7%, with an option to reduce it to 5% with a payment of about $1 million to Louisville's Affordable Housing Trust Fund.

An amendment was approved ahead of Thursday's vote, though, to increase the amount of affordable housing in the complex — 10% of units in its southern portion and 5% of units in its northern section would qualify — and to cut the option to pay to reduce that rate.

What's next?

Next on Jefferson Development Group's list is applying for state incentives. Hundreds of millions of dollars in state tax revenue could be set aside for the developer as well.

A financial analysis from Commonwealth Economics included in the ordinance estimated an additional $218 million could eventually be sent back to Jefferson Development Group. Owner and CEO Kevin Cogan told city committee members last week that his team has already had early conversations with Kentucky's economic development team.

Jim Parsons, an attorney who worked with the firm on the TIF, previously said the state tax incentive approval process would likely take about nine months.

An email Friday morning from Jefferson Development Group CEO Erica Hodge on behalf of Cogan did not provide more details on the next steps but said company officials are "grateful for the support of the City, Mayor (Craig) Greenberg, the entire Economic development team and the full Metro Council.”

Metro Council members who voted against the TIF in Thursday's meeting included Owen along with Tammy Hawkins (D-District 1), Barbara Shanklin (D-2), Jecorey Arthur (I-4), Donna Purvis (D-5), Ben Reno-Weber (D-8) and Jennifer Chappell (D-15).

Reach Lucas Aulbach at laulbach@courier-journal.com.

This article originally appeared on Louisville Courier Journal: One Park plaza TIF deal approved by Louisville Metro Council