Proposed Urban Government Center TIF sent back to committee amid legal threat

The Paristown Preservation Trust wants to build a $249 million mixed-use project on more than 11 acres of abandoned property near downtown Louisville.

Louisville Metro Government owns most of the land and for years has tried reaching deals with developers to bring activity back to the Paristown Pointe neighborhood site it vacated in 2016. Now, it’s offering to create a tax-increment financing, or TIF, district on the property.

Under the TIF, the Paristown Preservation Trust would regain 80% of the site’s property tax revenue above a baseline tax assessment. The mechanism is meant to give the developer an incentive to work on the site and increase the property value.

A development plan for the site estimates that the Paristown Preservation Trust could collect up to $20.3 million in property taxes across the TIF’s 20-year lifespan.

Last month, a Louisville Metro Council committee voted in a split decision to advance an ordinance approving the controversial development plan and TIF district. But the legislation hit a snag Thursday when the full council decided to send the ordinance back to the Labor, Economic Development and Appropriations Committee.

Committee chair Phillip Baker, a Democrat whose district includes the Urban Government Center site, briefly spoke in favor of the move, saying at the meeting that Louisville Metro Government needs to make changes to the ordinance.

Baker did not immediately respond Friday to a request for more details.

However, the project could face a potential roadblock even if Metro Council eventually votes in favor of the ordinance. On Tuesday, a group of residents announced they would take legal action if the TIF were approved without revisions they want to see.

Steve Wiser, a local architect and historian, is helping lead that effort. He argues Louisville Metro has allowed the Paristown Preservation Trust to sidestep requirements the city set in a proposal request in 2020, when it sought out interest in the site.

Wiser said the developer’s original proposal met those requirements, but he contends the current plan violates the request’s parameters in several ways, such as by indicating they will demolish the site’s old Kentucky Baptist Hospital building. Wiser also believes the developer intends to create a project too big for the surrounding area.

He referenced a state statute that requires local public agencies to reissue a request for proposal , or RFP, if conditions change during talks with interested vendors. While talks for the Urban Government Center RFP ended four years ago, Wiser argued the statute applies to Louisville Metro’s ongoing negotiations with the developer and said the city is violating it.

“That's what our [potential] lawsuit is all about,” Wiser said.

He suggested the city and the Paristown Preservation Trust had ways to prevent legal action, such as by using the original proposal or getting rid of the TIF.

“If they go back to the 2020 proposal… they could start construction today on that project,” Wiser said.

Louisville attorney Steve Porter is working with residents to oppose the project. He’s represented residents in a variety of zoning and development battles, including a high-profile but unsuccessful fight against Topgolf at Oxmoor Center.

“At this point, if they're going to go with something that is totally different from what the original RFP was, they need to open it up to the rest of the community and any other developers who would say, ‘Hey, we'll do that.’ And they haven't done that,” Porter said.

Louisville Metro’s Cabinet for Economic Development put out the 2020 RFP and is handling negotiations with the developer through its Department of Economic Development.

Caitlin Bowling, the cabinet’s spokesperson, declined to comment on the potential lawsuit but affirmed the city’s support for redeveloping the Urban Government Center property in an emailed statement on Wednesday.

“Paristown Preservation Trust has committed to incorporating native plants, constructing a playground, removing environmental hazards from the property, and including 55 units of affordable housing in the development, among other community benefits,” Bowling said in an emailed statement on Wednesday.

The Paristown Preservation Trust said in a statement Wednesday that it “has invested millions in the adjacent Paristown Arts District” and “continues to work cooperatively with elected officials and community leaders to create housing and greenspace that people want.”

Metro Council’s Labor, Economic Development and Appropriations Committee will next meet on Tuesday at 3 p.m. The proposed ordinance is listed among many items on the agenda .