Many locals were stunned to learn that two parcels of prime downtown Frankfort real estate received only a single offer of $1,000 during Wednesday’s sealed bid opening at the newly dedicated Mayo-Underwood Building. However, supporters of downtown revitalization are grateful a developer is willing to take a chance by investing in the capital city.
“The real story is that a developer is willing to drop a load of money and jump through a bunch of hoops to invest in downtown Frankfort,” Joe Johnson, of Bluegrass Realty and Investments, wrote in an email to The State Journal on Thursday. Even though the bid to purchase the land was $1,000, the developer is “willing to risk millions on Frankfort,” Johnson wrote, referring to strict criteria the developer must meet.
Parcels B and C, a total of 11.8 acres of state-owned property, include the land under the YMCA, the Capital Plaza Hotel, a state parking garage and the former site of the Frankfort Convention Center. In August, the state offered it to private developers on the condition that proposals meet criteria compatible with the Downtown Master Plan.
“They had to put in a tremendous amount of work, and I’m sure expense, just to put in the bid,” Marc Stone, a member of the Frankfort-Franklin County Tourist & Convention Commission, explained at the tourism board’s monthly meeting Thursday, adding there was probably only one bid because the request for bids was “pages and pages long.”
Those requirements, which needed to be met just to qualify to place a bid, include incorporating a mix of residential, retail, commercial, entertainment, cultural, institutional and parking uses. In addition to promoting walkability, the project also must be reviewed by the city’s Planning and Development Department to ascertain whether it meets the Urban Mixed-Use District zoning designation. Developers were also required to provide financial information and at least two examples of experience on similar projects in the past 10 years. Bidders also must pay a $10,000 bid deposit as a guarantee of good faith, according to the request for bids.
The lone bid was submitted by Luther M. Johnson, who is listed as organizer of New Frankfort Development LLC, out of Hazard. David Bates, of Lexington, is named as the registered agent. The LLC filed the necessary paperwork with Secretary of State Alison Lundergan Grimes’ office at 3:08 p.m. Wednesday, according to official records.
City Manager Keith Parker was glad to have a bid on the property.
“I was worried we wouldn’t have interest because of the obligation to construct parking,” he said of the minimum 300-space lot the developer must include.
Though he hasn’t seen the lone bidder’s plans, Parker said he assumes the state has verified or will verify in the next couple of weeks that the parking requirements and all other criteria have been met. A team composed of Finance Cabinet officials and one representative from each the city and county also reviewed submissions for compliance prior to Wednesday’s sealed bid opening.
“I think people expected something more, but if you think about it, a bid opening is not a grand announcement. It’s just tearing open a letter, which is exactly what she did,” said Robin Antenucci, executive director of the tourism commission said, referring to a cabinet employee who publicly read the one-page letter with the bid proposal.
The state will review the offer and decide to accept or reject it on Tuesday. If the bid is declined, the bid process will need to be restarted.
Tourism board member Craig Potts said that bidding on the project was not like bidding on the land alone.
“It’s a gigantic project, and to bid out 12 acres of urban design, that is a major, major project,” explained Potts said.
Parker said documents will be available for public review as the process moves forward.
“The ink is dry on the Downtown Master Plan and I think it is time to act,” he said. “If this is a valid bid, let’s not spend our energy finding faults and putting up barriers. If they don’t succeed, there isn’t anyone else standing in line.”