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Three Franklin County Fiscal Court magistrates cite communication issues with the city after voting against joining the city in hiring a Tax Increment Financing (TIF) expert to guide local leaders in financing public infrastructure in the Parcels B and C development.

Franklin County Judge-Executive Huston Wells, who voted in favor of the contract, is afraid the county has sent a negative message to the developers of the downtown property where the Frankfort Convention Center and Fountain Place Shops once stood. The effort failed in a 3-3 vote.

During a joint special meeting of the Frankfort City Commission and fiscal court in February, Casey Bolton with Commonwealth Economics spoke about  a TIF to fund the public portion of the project, including a parking garage that was mandated by the state when it sold the land.

According to Bolton, a portion of the money 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 infrastructure, including the parking garage, an extension of Washington Street and sidewalks.

The amount owed to the developers would be set and if the amount were paid back sooner than expected, the TIF would expire earlier than its original end date.

At Bolton’s current projections, Parcels B and C are expected to generate roughly $30 million in tax revenues in 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, Bolton said. 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 infrastructure.

Toward the end of the meeting, city and county leaders decided it would be in their best interest to hire a TIF expert to guide them through the process.

City Manager Keith Parker told The State Journal on Thursday that a TIF is a specialized area of law that neither City Solicitor Laura Ross nor County Attorney Rick Sparks are experts in.

Parker said that, soon after the joint meeting, he and Ross started researching who the city and county should hire for the job.

They, along with Sparks, settled on Jim Parsons, who specializes in Tax Increment Financing for development projects and is a partner with KMK Law.

Although his law firm is based in Cincinnati, Parsons has done a tremendous amount of work in Kentucky, Parker said.

According to Parsons’ biography on the KMK website, he’s chair of the Northern Kentucky Chamber of Commerce and a board member of the Tri-County Economic Development Corp. He’s served as city solicitor and city manager for the City of Newport and spent seven years as the Boone County administrator and judge-executive.

Parker said he’s also worked with the City of Lexington on a TIF project and Bowling Green.

During a March 16 fiscal court meeting, magistrates voted on a "legal services agreement" with KMK Law. According to Wells, the county was asked to pay $12,500, or half of the $25,000 needed to pay Parsons.

Magistrates Sherry Sebastian, Michael Mueller and Scotty Tracy voted against the project. Magistrate Marti Booth was absent, therefore the vote ended in a tie.

After voting against the agreement, Sebastian explained that she didn’t have enough information to vote yes.

Sebastian told The State Journal on Wednesday that said she’d like more information on the entire process before agreeing to spending county taxpayer dollars on hiring a TIF expert.

“Communication is key in any relationship,” Sebastian said, adding she doesn’t think there’s been enough communication between the city and county.

Sebastian said the magistrates weren’t notified about the expert until March 13.

During the March 16 meeting, Mueller also expressed the desire for more information before voting and suggested the city and county have another joint meeting.

Wells and Sparks told the court it was urgent to hire an expert.

“We can’t move forward until we have someone representing us,” Wells said.

On Wednesday, Mueller told The State Journal he’d still like to have a joint meeting.

Mueller said the agreement was put on the March 16 agenda with “no clarity.” No one could explain how or why this expert was chosen and that is information he needs to know before he can decide whether to vote yes.

Mueller said he was under the impression the city and county would be having more meetings with the developers, but that has not happened since the joint meeting.

During the February joint meeting, CRM Companies President and CEO Craig Turner also gave a presentation on the future of the nearly 12-acre tract. CRM Companies is the developer of the project, which calls for mixed-use commercial and residential development and a new YMCA.

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.

Tracy told The State Journal on Wednesday he voted no for multiple reasons.

“I feel like in the past, the community and the fiscal court have been misled about having further discussions on the redevelopment, public input, the consultant report and or other matters concerning this project,” he said via email.

All three magistrates told The State Journal they don’t believe their votes send a negative message to the developers.

“All I’m asking for is communication,” Mueller said, adding that he’s not wanting to stop anything positive for the city or county but wants to be more educated and make the right decision.

Sebastian said she’s not against development of the property but wants to have all of the information before making a decision. She said the lack of communication thus far has been “troubling.”

Parker said Thursday he’s working on drafting a letter to the magistrates to explain why an expert is needed and why Parsons was chosen.

“I think it’s all a misunderstanding,” Parker said, adding he hopes the fiscal court decides to put the agreement back on the agenda at a later date.

Parker believes it is important to have an expert hired before meeting with the developers again.

Wells told The State Journal on Wednesday he hopes the agreement is back on the court's agenda soon, saying a TIF on the public portion of the project is needed in order for it to be completed in a timely manner.

As for whether the county’s recent vote is delaying the project, Parker said the coronavirus is a bigger concern right now.

Part of the TIF process is holding a public hearing, and until public meetings can return to normal, a public hearing can’t happen due to social distancing mandates by Gov. Andy Beshear.

Both city and county government meetings will take place via teleconferencing without an in-person audience until further notice.

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