The $90 million townhome-style rental development planned for Route 9 in Newport is one step closer to becoming a reality.
The Newport Commission passed the request for an Industrial Revenue Bond, also known as an IRB, 4-1, with Newport Commissioner Ken Rechtin voting no at a meeting on April 7. The site along Route 9 at 910 Lowell Street is often called the “old steel mill site,” which has been mostly vacant since 1981.
The site is 17.23 acres, and developer PLK Communities is proposing 195 apartments, a commercial recreation facility, funding for tree planting, and collaboration with the city on a bike and pedestrian safety study.
Of the 195 units, 132 are two-bedroom units estimated to rent for $1,800, roughly 74% of the area median income; 63 are three-bedroom units estimated to rent for $2,300, roughly 77% of the median income.
“There are numerous benefits of the development, primarily getting the long-vacant contaminated site put back into productive use,” Newport Assistant City Manager Brian Steffen said. “The added benefit to this is that we believe that this will spur additional development along Route 9.”
The apartments would be townhouse-style, with separate entranceways and garages on the backside.
An IRB is a form of municipal bond issued by a government to finance the construction or improvement of facilities for private businesses. Steffen said the IRB is for $5.50 per $1,000 assessed property values proposed for 40 years. According to Steffen, the $90 million value with the payment in lieu of taxes, also known as a PILOT, will represent an excess of about a 2,300% increase in tax revenue on the site for the city.
A PILOT gives the developer a certain property tax reduction to build the site.
The Newport Board of Education still needs to approve the PILOT. The school’s share in the proposed PILOT is estimated to be $240,000 annually, compared to $21,120 today. A presentation was made to the board at the end of March. That vote is expected to take place at their next regular meeting. Attorney Jim Parsons, with Keating Muething & Klekamp, is the bond counsel for the developer and said the board seemed favorable to the PILOT.
“We will be revitalizing a long-term industrial vacant site,” said Mick Oats with PLK. “We’ll be creating new housing options for the community. We will support Newport’s long-term economic growth plan, and finally, we’ll provide stability and investment back into Newport and its schools.”
A $5.1 million investment will be made in site remediation.
PLK Chief Development Officer Nick Lingenfelter said they are not aware of many airborne contaminants. He said they intend to isolate or cap two or three small hot spots in concrete.
“I’m very impressed with this company that has this vision to go into underused sites and clean up really bad sites, so I commend you for that, and I think this will be a really great project for west Newport and all of Newport,” said Newport Vice Mayor Julie Smith Morrow.
As part of the project, PLK has agreed to donate $150,000 to the city for tree planting. Newport announced in February that the federal government rescinded its $1.2 million tree grant from the Arbor Day Foundation. Through that grant, the city planned to plant 1,000 trees.
Lingenfelter said PLK intends to tie this development with Ovation and that there will be both internal sidewalks and sidewalks on the main road for walkability.
“Our thought process from day one has not been to take away from what Ovation is doing because it’s amazing; it’s how do we complement it, and how do we tie into it?” Lingenfelter said.
Rechtin was the only commissioner to vote no on the IRB for the development. Rechtin said he always envisioned the site to be more business-friendly, almost a highway commercial zone, with light industry assembly, like what the New Riff Distilling has.
“My hesitancy comes on this in that this is 16 acres, and it’s still prime for us,” Rechtin said. “It is the last large developable piece in Northern Kentucky, within the shadow of Cincinnati.”
Newport Commissioner Mike Radwanski said he was on the comprehensive plan steering committee in 2020, and the committee was unsure what could go there.
“I see this as the best possible outcome,” Radwanski said. “We’re talking multiple acres of having an incredibly toxic site cleaned up. It’s going to be a huge improvement for our city. I appreciate that you all have a lot of experience with this process. This is very complicated, involving the environment. Folks are very sensitive of that here in Newport.”
Newport resident Tyler Black spoke at the meeting and said PLK seemed like the right people for the job, but asked them to keep neighbors in the loop.
“If you want to show up to a neighborhood meeting, answer some questions, I think that’s just what it’s all about,” Black said. “Engaging with folks and backing up all your expertise. Take the opportunity to brag a little bit about how you are so good at handling situations like this.”
During the meeting, Newport resident Max Long said that while this is not the exact type of housing he would like to see built in Newport, he thought it was acceptable.
“I think they’ve done their research; they’ve done their market analysis on what is the average income and whatnot,” Long said. “So, I think there’s really no better alternative. That’s what I ask myself. If not this, then what else?”
Should the Newport Board of Education vote to approve the PILOT, Lingenfelter said he anticipates site remediation beginning early to mid-summer and taking about three months. Construction would be targeted for early fall.