The Covington Central Riverfront project at the site of the former IRS building has secured a key funding source.
The City of Covington announced today they can use up to $45.5 million in future state tax revenue to help redevelop the site.
The Kentucky Economic Development Finance Authority, or KEDFA, gave the City permission to set up a Signature TIF, or Tax Increment Financing District.
The 31.6-acre TIF district – which will consist of the 23-acre former IRS site, the adjacent Northern Kentucky Convention Center, and surrounding streets – allows Covington to use the growth in revenue from three state taxes collected within the TIF’s borders: sales taxes, ad valorem property taxes, and income tax.
The City will use the revenue to pay back the money it borrows to build what’s called the “horizontal infrastructure” on the site, including a restored street grid, sidewalks, parking garages, and utilities.
“Creation of the state TIF district was a significant part of our planning efforts, and it’s incredible to have the state invest in this project as such a strong partner,” Covington Economic Development Director Tom West said. “We appreciate the support of Gov. Andy Beshear and his team at the Cabinet for Economic Development as we take another step toward creating a transformational space that will help define The Cov for future generations.”
The key decision was made at a KEDFA meeting in Frankfort Thursday. The Covington Board of Commissioners voted May 10 to approve the TIF agreement if it were it to be passed by KEDFA.
KEDFA had given preliminary approval to the TIF in December 2020, which allowed a consultant to be hired to formally estimate the anticipated net new state revenue that will result from the office buildings, hotel rooms, housing units, and shops built as part of the project.
“The Project represents a rare and significant opportunity for the City of Covington and Commonwealth of Kentucky to enrich its presence along the Ohio River with a vibrant, mixed-use district,” according to the consultant’s report.
Both the preliminary and final approvals from KEDFA followed recommendations from the state Cabinet for Economic Development.
The TIF is a 30-year arrangement. It’s labeled a “Signature” district because the total value of private investment is expected to top $200 million.
