The developers for one of Northern Kentucky’s largest mixed-use development projects have been granted tax incentives.
On Tuesday, the Kenton County Fiscal Court approved a six-year tax incentive for the Buttermilk Pike Development Company, B/FMP Land Company, and MB Buttermilk LLC — the developers working on the Fort Mitchell Gateway Project.
The Fort Mitchell Gateway Project is a mixed-use development being built on a 25-acre parcel of land along Buttermilk Pike, Grace Court, and Royal Drive in the City of Fort Mitchell. The parcel was the previous site of the Drawbridge Inn and Convention Center, which closed in 2012 after 42 years in operation. It was subsequently demolished in 2014.
The development’s main feature is The Ormsby — a nine-story retirement center with approximately 200 living spaces. The site will also include office, commercial and residential spaces.
In 2014, the Kentucky Economic Development Finance Authority set up a tax increment financing district at the Buttermilk Pike/Royal Drive Development area to help finance the project.
“I’m pleased to announce a lot of things are coming together now,” said Jim Parsons, a lawyer specializing in tax increment financing.
That same year, the city of Fort Mitchell and Kenton County entered into a local participation agreement. They pledged a portion of incremental increases in their real property ad valorem taxes and occupational taxes to help financially support the development for 30 years.
The agreement was officially activated on Jan. 1, 2018, with the scheduled funds scheduled to end on Dec. 31, 2047.
Following the project’s development agreement, Kenton County and Fort Mitchell approved an amendment to the agreement that would change its activation date to Jan. 1, 2024. However, the Kentucky Economic Development Finance Authority rejected the amendment. The rejection effectively reduced the amount of tax revenue going to the project by six years.
Due to Kenton County’s home rule power authority, the county can provide tax incentives for economic development if it serves a “public purpose.” Since the local participation agreement’s activation date could not be amended, local incentives must replace the lost financing revenue.
The ordinance the court passed on Tuesday afternoon ensured that the local incentives granted to the project’s developers by Kenton County would be worth the same amount of money the county had previously agreed to provide when it attempted to amend the activation date of the Local Participation Agreement.
Essentially, the ordinance makes up for six years of lost tax revenue for the project by supplementing the funding gap with local incentives.
“Now we’re trying to put all these respective incentives in place so that we can move forward with the financing of the project,” Parsons said.
In late October, the court approved $2 million worth of site development funds to improve stormwater infrastructure around the site in Fort Mitchell. The $2 million came from Kenton County’s $13 million pot of site development funds administered by the Northern Kentucky Port Authority.
Pending approvals, work is expected to begin at the end of 2023.
