Construction on Parcels B and C could start as early as the end of this summer.
During a special joint meeting of the Frankfort City Commission and Franklin County Fiscal Court on Monday, CRM Companies President and CEO Craig Turner gave a presentation on the future of the nearly 12-acre property in downtown Frankfort. CRM Companies is the developer on the project.
Marty Johnson, a Hazard-based developer and the sole bidder, was awarded Parcels B and C by the state Finance and Administration Cabinet in November. His New Frankfort Development LLC bid $1,000 on the property.
The property is the site of the demolished Frankfort Convention Center and adjacent Fountain Place Shoppes. The property also includes the land under the YMCA and Capital Plaza Hotel along with an existing state parking garage.
Johnson’s plans for the parcels include a new Frankfort YMCA, 200-plus residential units, a new parking garage, office and retail space and more.
Turner said the project is set to cost more than $100 million and will take at least 24 to 30 months to complete.
Although the project plans are not finalized, Turner said drawing up the plans will begin in April with the hope of breaking ground on the project by late summer or early fall.
The first step of the project would be the demolition of the current Frankfort YMCA on West Broadway Street, which is the location of Parcel C.
Turner said Parcel C would serve as the staging area for the construction on Parcel B.
The current development plans include constructing a new 300-space parking garage behind the Capital Plaza Hotel, renovating the hotel and constructing a new YMCA at the corner of Mero Street and the future Washington Street extension.
According to Turner, the parking garage is estimated to cost $6 million, and extending Washington Street to Mero Street is slated to cost $937,500.
As for the hotel, renovations are estimated to cost $14 million.
Turner said he is not involved with negotiations involving the hotel, but New Frankfort Development is working on a contract with the hotel. Turner wouldn't elaborate on the nature of the contract.
Demolition of the current Frankfort YMCA is on the cheap side, according to Turner, at $500,000.
In January, Frankfort YMCA Board of Directors Chairman Paul Harnice said a new YMCA is estimated to cost $9.5 million.
On Monday, Turner’s estimate for a new YMCA was $11.25 million.
When asked about the difference in estimates, Turner told The State Journal the estimate depends on which plan is used to calculate the estimate.
Turner’s YMCA plans include a parking area for Y patrons.
During a special city commission meeting on long-term planning on Feb. 3, commissioners discussed investing $2.5 million over five years toward a new Frankfort YMCA. The commission had a first read of that budget amendment during its work session Monday night.
The final vote on the budget amendment is scheduled for the Feb. 24 regular meeting.
As for the mixed-use residential, retail and office space aspect of the plans, Turner said in today’s market retail means a lot of restaurants.
The retail/restaurant space could cost more than $10 million to build.
As for residential space, Turner said that since the demand for more housing downtown is uncertain, he and his team plan to build the residential units in phases.
If all of the planned 216 residential units are built, it could cost $37.6 million.
Commissioner Katrisha Waldridge asked Turner if it would be possible to add more green space to Parcel B. Franklin County Judge-Executive Huston Wells also said he would like to see more green space.
The idea of having green space mixed in with parking was discussed. Turner said potential restaurants would want outdoor eating areas included on the property.
Eric Cockley, director of planning and community development for the City of Frankfort, said the plans for the parcels will require a zoning change and that process will include public comment.
As for financing the public portion of the project, Casey Bolton with Commonwealth Economics spoke about tax increment financing, or a TIF.
According to Bolton, a portion of the amount the city and county would make off increased occupational, property and sales tax revenues within a certain period would go back to the developers to pay for the public portion of the project, which includes the parking garage, the Washington Street extension and sidewalks.
That amount owed to developers would be set and if the amount is paid back earlier than expected, the TIF would expire earlier than its end date.
At Bolton’s current projections, Parcels B and C are expected to generate roughly $30 million in tax revenues within 20 years between the county and the city.
Parcels B and C could bring in nearly $50 million in tax revenue for the state in the next 20 years. At the maximum TIF rate, the state could have to contribute 80%, or $40 million, of its tax revenue to the public portion of the project.
Locally, $5 million from the county’s tax revenue and $6.5 million from the city’s tax revenue could go toward the public portion of the project.
On Monday, City Manager Keith Parker said this process is in the early negotiation stages and these figures are not final.
Turner agreed and said the numbers presented have not been properly vetted, but are close enough.
Turner said if the TIF idea does not work out, the current project plan would have to be changed.
Parker said the city and county would come together to hire a TIF expert to use during their negotiations with New Frankfort Development and CRM Companies.