Editor's note: This story was updated at 8 p.m. Wednesday with comments from state and city officials and the developer.
A Hazard developer's bid for former Capital Plaza land known as Parcels B and C has been accepted by the state.
Finance and Administration Secretary William M. Landrum III told The State Journal of the decision Wednesday afternoon.
Luther "Marty" Johnson, whose New Frankfort Development LLC was the lone bidder on the 12-plus acres formerly occupied by the Frankfort Convention Center and Fountain Place Shops, agreed to develop the property in keeping with the Downtown Master Plan's vision of mixed-use commercial and residential development. He must also build a 300-space public parking garage within two years. The bid was $1,000.
“I just think Frankfort shouldn’t depend on or wait on the state,” Landrum said of the decision that culminates two years of work by state and community leaders to get the state-owned property on local tax rolls. “If you work and live in the capital city, you can now focus on building a better Frankfort. That’s why I’m moving this forward.”
Frankfort City Manager Keith Parker was elated by the news, saying the property, once fully developed, could add $40 million to $60 million in assessed value to local tax rolls. Currently, the land is tax-exempt.
“It’s a game-changer,” Parker said, noting the impact on Frankfort Independent Schools, which stands to get a windfall in property taxes. The city also will benefit in the form of occupational tax from workers eventually employed by businesses and organizations that occupy the property.
Landrum said that returning the land to the tax rolls was a primary goal two years ago when the state decided to demolish the convention center and adjacent infrastructure as part of removing the Capital Plaza Tower and constructing a new state office building. The new Mayo-Underwood Building opened last month and will house 1,600 state workers when fully occupied.
“I set out to reduce the footprint of state government and get the property on local tax rolls,” he said of Parcels B and C, which also include the land beneath the Capital Plaza Hotel and the YMCA.
Johnson was unaware of the state’s decision when contacted by The State Journal Wednesday evening.
He estimated the cost of the required parking garage at $4 million to $5 million.
As for other priorities, he was hesitant to get into too much detail but said, "I would like for us to get a deal done for a new YMCA."
A supermarket, pharmacy, residential and office spaces are other possibilities, he said, noting that he wants to “do something that's pedestrian-friendly and good for the people downtown."
Landrum said that Johnson and New Frankfort Development LLC “have the resources to complete the job,” noting that the developer’s proposal was fully vetted by Finance and Administration Cabinet staff and city planners before Landrum’s decision Wednesday to award the bid.
Johnson, 62, and his wife, Theresa, have been in business together since 1992 when they purchased their first Wendy’s restaurant. Now, the Johnsons own or are part-owners of hundreds of properties across the Southeast, including Applebee’s restaurants across Eastern Kentucky and Southwest Ohio, Hampton Inn in Hazard, the Bank of Hindman and more.
Reporter Jordan Hensley contributed to this report.