The Frankfort City Commission on Monday unanimously approved the sale of land adjacent to the Old Simon Warehouse.
The city agreed to sell the 0.57-acre lot, located east of the former warehouse, for $1,000 to The Broadway Building LLC. The company, through its attorney Charlie Jones, has said it plans to use the land as a parking lot for a proposed boutique bourbon-themed hotel.
But former FPB Chair Anna Marie Rosen, who also ran for a city commission seat last year, said that she thinks the sale is illegal and unfair to FPB ratepayers.
She cited KRS 96.175 (7), which states, “The title to any property, real or personal, which the board may acquire shall vest in the municipality for the use and benefit of the electric and water system.”
FPB does not technically own property; all of its acquired titles are vested in the city. Rosen said that because of this, the city owes it to FPB ratepayers to not sell the lot at a discounted rate. She also argued that it doesn't have the authority to sell that land, per KRS 96.176 (1).
“The whole reason for that delineation in the KRS saying they can't (sell property) is so that municipal governments don't sell off assets that were purchased for the benefit of the ratepayers,” Rosen said.
The statute states that municipal boards such as FPB "shall have charge of the exclusive supervision, management and control of the operation, maintenance and extension of the electric and water plant."
The lot is composed of two parcels that are worth a collective $125,000, according to the Franklin County Property Value Administrator's Office assessed values.
City Attorney Laura Ross, both in a memo to the commission and in comments during Monday night’s meeting, said the legality of the sale had been thoroughly reviewed.
“I have vetted the legality of the deed itself and the legality of the sale very carefully,” Ross said. “I just want you all to feel confident that that portion is what it should be.”
Ross pointed to KRS 82.083(4)(b), which states that real property can be “transferred, with or without compensation, for economic development purposes.”
In arguing for the commission’s eventual decision to sell the property, Jones said that acquisition of the lot was “integral” to the success of the project and that Louisville developer Weyland Ventures may not have been on board without it. Jones added that he’s been working on acquiring the lot for his clients for around two years.
He also argued for its merits as an economic development tool that will benefit the city by encouraging tourists to stay overnight in town.
“I believe it’s worth the city’s contribution towards this,” Jones said. “That’s why you’re considering this as an economic development program … . I don’t see this just as $1,000, but overall what the city will receive.”
Jones also assuaged concerns by Commissioner Leesa Unger about the project’s environmental impact. He said that the developers did not intend to do any excavation or build a garage — only to pave over the land. He also
The commission briefly considered delaying approval of the sale until a fair market value appraisal could be conducted, but Jones warned that the added time may jeopardize the development.
The listed members for The Broadway Building LLC are Glenn Watkins and Frank Haydon.
Ross’ interpretation of the statute that Rosen cited appears to have changed since 2018, when the issue of FPB’s role in deciding the fate of real property was being discussed with regards to the Tanglewood reservoir.
At an April 2018 meeting, Ross, in response to questions from former Commissioner Scott Tippett, asserted that such land would still be for the FPB’s use and benefit.
“I think regardless of whether we put that language in the deed itself, the title will vest in the city and If it’s being used for and is intended to be used by the FPB it will be for their use and benefit,” Ross said.
The FPB is still using the land as a cable hub, according to FPB attorney Hance Price.
Price, in a December interview before the agenda item in question was delayed, said that he couldn’t comment on the legality of any potential sale. He added, though, that he wouldn’t think there would be any legal bar to selling such a property if both the city and the Plant Board were in agreement on it.
Jones said that he has met with FPB officials, who did not indicate that they had any issue with the sale.
As an offer to sweeten the deal for the commission, Jones altered the agreement’s clause about re-conveyance to the city if the development falls through. He said that he would be OK with Ross striking a sentence that would have increased the city’s re-purchase of the property if the land were to be developed. The city could repurchase the land, if in five years its not developed as intended, for $1,000 regardless of whether or not its paved.
According to a deed of conveyance for the property available at the Franklin County Clerk’s Office, the land was deeded to the city by Tri-Cities Utilities Company in 1943. A large amount of land on which FPB performs its duties was also deeded to the city at the same time.